Rents expected to rise 20% over the medium term

nollag2006

... and even more in London, where rents are expected to rise 25% over the next five years.

http://pdf.euro.savills.co.uk/spotlight-on/spotlight-on-prime-rental-markets.pdf?response=no

Some great news in the run up to Christmas !!

:beer:

HappyMJ

That's only about 3.7% per year. Not too bad. Isn't inflation running higher than that now?

Dan:_4

Rents won't be going up by this much anytime soon, not while growth in every other area has stalled.

geneer

HappyMJ wrote: »

That's only about 3.7% per year. Not too bad. Isn't inflation running higher than that now?

Seems reasonable.
Wouldn't mind this at all, if I was renting.

nollag2006

Given the rapid rises over the past couple of years, I'd also be quite happy to see rents settle down to just keeping ahead of inflation.

abaxas

nollag2006 wrote: »

Given the rapid rises over the past couple of years, I'd also be quite happy to see arrears settle down to just keeping ahead of inflation.

I've corrected your mistake.

MacMickster

From the same report

We anticipate that the pressure to
exit the rental sector and return to
home ownership will be reduced over
the period of the next five years.
Given relatively low yields on prime
rental property, renting remains
relatively cost efficient, despite low
interest rates.
Furthermore, relatively low rates of
anticipated house price growth mean
that the risks of losing out on capital
appreciation or finding it significantly
more expensive to buy in the short to
medium term are less of a risk.

This suggests that many tenants will rent as, for them, it provides a better economic choice in the medium term than buying. House prices are not going to rise significantly (and indeed may fall) so they will let the landlord risk their capital for what Savills describe as relatively low yields.

chewmylegoff

What next? Price of the basket of goods and services used to calculate CPI/RPI expected to rise in line with inflation?

Shocking!!!