The rapid pace of growth in the rental market will slow in 2022 but the enduring rate of increase should still be above pre-pandemic levels.
That’s the view of Hamptons, the lettings agency, which forecasts that the 2022 rental market will continue to be supported by tenants’ willingness to pay for extra space and by unprecedentedly low levels of stock.
“We forecast that rents will rise by an average of 2.5 per cent in 2022 across Great Britain, following an increase of 3.0 per cent this year. Growth will be dictated by what happens to peoples’ incomes in 2023 and 2024” explains Hamptons.
The agency predicts growth is likely to be slower in the capital, particularly in Inner London where rents may not return to pre-pandemic levels until the middle of 2022.
“We are forecasting overall rental growth in London of 0.5 per cent this year, with pickup to 1.0 per cent in 2022 and 1.5 per cent in 2023. Rental growth is then expected to accelerate to 3.5 per cent in 2024.”
It adds that the regions outside London, where affordability is less stretched, will see stronger growth. Rents seem set to move in similar directions, with no significant North-South divide.
“The South is likely to see marginally stronger growth, with rents here forecast to rise 14.5 per cent by the end of 2024.”