A property website says tenants and prospective renters in London are set to have ‘a torrid 2019’ because of a shortage of stock.
Home, a website that issues a regular snapshot of the lettings and sales markets, is warning that there is “a dramatic shortage of available rental properties” which is “causing rents to soar further.”
It warns that rents have already climbed 6.3 per cent in 2018, driven by scarcity, while over the last two years the supply of rented accommodation in the capital has plunged by 34 per cent.
Even buy to let investors who sell up are likely to have a difficult year according to Doug Shepherd, director of Home.
He says in his end-of-year market report: “The London property boom and bust was ‘baked into the cake’ a long time before
Brexit. Bank bailouts coupled with historic low interest rates guaranteed that the capital’s property bubble would be reinflated to colossal proportions. Of course, that same bubble is now deflating.
“Lending won’t get any cheaper (rather the contrary) and prices must correct in the aftermath of the malinvestment that always accompanies the buying frenzy.
“So far, London prices have been correcting in an orderly fashion of around 2.5 per cent per annum. We expect these losses to extend to 3.5 per cent in 2019 as sentiment worsens and more potential homebuyers play ‘wait and see’ based on the logical assumption that prices will be lower next year.”
Shepherd says he expects the London rental market to make headlines next year as rents inevitably rise to reflect loss of stock.
