Date Published 10 January 2019
UK rents are predicted to rise 11.4% in the next five years, according to a forecast by CBRE.
Alongside fairly ‘moderate` growth over 1.8% in UK house prices, the property group forecasts that rents will rise 1.3% in 2019.
The report, which looks at how economic, political, financial and technological trends might affect property markets, foresees further growth in rents leading up to 2023, supported by a drop in housing supply in the PRS amid ‘dampened investor demand for buy to let` and growing demand for rental homes, particularly from lower-earning younger people.
CBRE estimates that rents are likely to rise 1.3% in 2019, followed by growth of 1.9% in 2020, 2.5% in 2021, 2.7% in 2022 and a further 2.6% in 2023.
Miles Gibson, CBRE`s head of UK research, said: `We expect rather weak house price and rental growth over the next year, but we think that the lack of supply and low interest rates for mortgages will hold prices up.`
He added that weak supply and strong demand is `creating a lot of interest among investors` in the student accommodation and build-to-rent sectors, especially in terms of institutional capital.
Some £2.1bn of institutional funds had been invested in the year to Q3 2018, 51% higher than the same period of 2017.
Investment is on a firm upwards trajectory, and investment volumes in 2019 seem likely to exceed 2018`s total.