Rent rises are predicted to outpace house price growth over the next five years.
This is according to Nicky Stevenson, managing director of Fine & Country UK, who says a shortage of stock, increased borrowing costs, and economic pressures all underpin the rental market.
“Rental records continue to topple month-on-month across England and Wales. The upward price trajectory continues as the gap between supply and demand shows little sign of easing” adds Stevenson.
“The rental threshold of a prime market property across England and Wales now stands at £2,750, with the average prime rent at £3,661 per month. In both the main and prime markets, value growth in London is most marked.
“The average rent for a prime property in the capital has now reached £5,000, which is close to £200 per week higher than a year ago.
“Apartment living is back in vogue in many city centre locations, with Rightmove reporting a significant uptick in demand for smaller apartments, with studio flats overtaking one-bed properties as the most in-demand apartment for renters.”
Stevenson notes that over four million households live in private rented accommodation, the majority owned by private landlords.
According to the British Property Federation, however, Build To Rent units will account for over eight per cent of private rented households by 2032.
“Many landlords are unaware of this sector. HomeLet survey data suggests just 48 per cent of professional landlords have heard of Build To Rent, falling to less than one in five of accidental landlords” she adds.
“The number of BTR homes is forecast to increase five-fold over the next decade, from 76,800 homes today to 380,000 in 2032.
“Although the sector has traditionally focused on London and major regional cities, close to half of all local authorities now have BTRin their housing pipelines, over double the proportion in 2017" she concludes.