Rents are likely to rise 2.5 per cent in 2019, then 3.0 per cent in 2020 and a further 2.0 per cent in 2021 according to Countrywide.
In a prediction report issued by the agency group’s upmarket brand Hamptons International, rents are expected to rise over the next three years roughly in line with average earnings - which is sharper than rent rises over recent years.
Countrywide says weaker economic conditions across the UK, affordability problems for buyers and stringent lending conditions mean demand for the rented sector will continue to grow.
“The reduction in tax reliefs available to landlords will continue to weigh on landlord purchases and is causing some of the most indebted landlords to sell up” warns Countrywide.
“In fact, since the three per cent stamp duty surcharge was introduced in April 2016, 120,000 more landlords have sold their buy to lets than purchased new properties and this is contributing to low stock levels in the rental market. Furthermore, a rising interest rate environment may mean that more landlords will review their portfolios” continues the agency.
However, it says that despite low stock levels and increasing demand, rental growth has been sluggish throughout 2018.
Last month the rent on a newly let property rose 1.1 per cent year-on-year and just 0.1 per cent year-on-year in London.