Rents are set to sky-rocket by 27 per cent in the next decade according to research commissioned by the Association of Residential Letting Agents and conducted by the Centre for Economics and Business Research.
The research suggests rents will rise from a current UK average of £134 per week to £171 in 2025. Those living in London will be worse off as they’ll need to pay 34 per cent extra, an increase from the current average of £234 up to £314.
A declining homeownership rate will boost demand for rental properties, and drive house prices up. The Housing 2025 report also predicts the proportion of private renters in the UK will increase from 20 per cent of households in 2015 to nearly 29 per cent by 2025.
“Rent costs are already growing at a rate that people are struggling to keep up with, and they’re due to become even less sustainable over the next decade – particularly when the new landlord tax sets in, which will put off many would-be landlords from entering the market” says David Cox, managing director of ARLA.
“If we’re to see the property market lifted out of its current state, we need to help the rental market from top down as well as bottom up, ensuring landlords are not penalised for their choice of income, and they can in turn give tenants the best possible price and service they deserve.”
ARLA wants the government to make a scheme similar to the London Rental Standard mandatory across the country, to create a way of distinguishing letting agents and landlords who maintain their properties to a high standards.
It also wants a wider scope of powers given to the Private Rented Sector Taskforce and providing government debt guarantees would encourage large-scale institutional investment into the private rental sector, creating more available properties and helping to bring rental costs down.