Forecasts Predict Substantial Rent Increase Between Now and 2027
UK rents may surge by 22.2% over the next five years, according to a report by Knight Frank.
High demand shows no sign of coming down. In addition, the labour market and new jobs are also influencing rent prices moving forward.
Read on to see how this will affect the housing market and property investors in 2023 and beyond.
Read Everything You Need to Know About Investing in Off Plan Property
Download a copy of your FREE guide to off-plan property investment for tips on strategies, locations, and more.
Why Are UK Rent Prices Higher in 2023?
UK rent prices are increasing faster than property prices in 2023. Numerous factors affect rental costs. This includes a shortage of rental supply and the decline in first-time buyers due to the current cost-of-living crisis. As such, the UK saw rental prices increase by 5.5% – a new record.
Knight Frank indicated that the “strength of the labour market and job creation” also pushes up prices and boosts rental demand in the property sector.
As things stand, the current annual record looks set to be broken by the end of 2023.
Let’s have a look at the forecast.
Year | 2023 | 2024 | 2025 | 2026 | 2027 |
---|---|---|---|---|---|
Rental Growth (%) | 6.50% | 5% | 3.50% | 3% | 2.50% |
Rental growth is expected to slow as interest rates and inflation fall to manageable levels. However, they still result in a 22.2% cumulative total, making good reading for those looking to make money from property and wondering whether they can count on the market in the coming years.
Take a look at our Property Investment for Beginners guide for a more detailed breakdown of UK property over the next few years.
Secure a Luxury Apartment on the London Commuter Belt With Only £5k!
NEW payment structure announced for the Hive Luton. Reserve your unit with only £5k and pay just 10% of the property price on exchange, with the remaining 90% due upon completion. Few units remain so be sure to enquire now to take advantage of this deal!