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17th November 2011

Rents rising faster than house prices!

According to Savills forecast rents will rise significantly more than house prices over the next five years. This will make one in five household’s private rental accommodation by 2016. This prediction comes from the increasing rental demand from those unable to purchase their own home or uneasy about committing in the current sales market rents will rise by a staggering 20.5% by the end of 2016.

This growth drastically overtakes house price growth of 6% over the same five years. Savills suggests that with 20% of households turning to the private rental sector over the next five years, it is likely that demand will outstrip supply. Another major increase will be renewed investment in the sector by corporates looking for income rather that individuals looking for capital growth. 

Yolande Barnes, director of residential research at Savills, said: “A strong investment case can be made in terms of the rapidly rising demand for private rented accommodation, a situation that is unlikely to change for as long as mortgage finance remains scarce and first time buyer deposits are unaffordable. And although rents have risen sharply this year, the inbuilt supply shortage means that we see nothing overheated about this market. The biggest challenge now is how to deliver much needed supply into the private rentals market.”

This is the news that Landlords who are looking to increase their portfolio want to hear. The strength of the market and where the rental markets looks to be in 2016 marks the transistion from the homeowner to the landlord. 

Looking to enter the rental market? Existing landlords want to increase their portfolio? Contact Martin & Co. As a dedicated letting agent we can provide you with current information on the rental sector and advise you on how best to tackle the market. Visit http://www.martinco.com/lettings-agents/slough your local office.