Rents to Rocket 15 per cent

The Royal Institute of Chartered Surveyors has today issued its latest survey of members and suggests that rents in the UK could rise by 15% in the next 5 years.

Their data suggests that less new properties are being built, making it harder for people to get on or move up the ‘property ladder’ as the population expands as well as seeing falls in the number of new landlords given changes to changes on both income tax and stamp duty when buying investment property.

In addition, some existing landlords are selling up and offloading property given the less attractive tax relief options, meaning greater tax and meaning even lower numbers of property available for rent.

Finally, the UK property market is fairly flat meaning that there are little or no capital gains and appreciation to be made by buying investment property in the current climate.

Simon Rubinsohn, RICS Chief Economist said: “The impact of recent and ongoing tax changes is clearly having a material impact on the Buy to Let sector as intended. The risk, as we have highlighted previously, is that a reduced pipeline of supply will gradually feed through into higher rents in the absence of either a significant uplift in the Build to Rent programme or government funded social housing. At the present time, there is little evidence that either is likely to make up the shortfall. This augers ill for those many households for whom owner occupation is either out of reach financially or just not a suitable tenure.”

Comment

Our views merely echo Mr Rubinsohn’s comments.  That said, there may be some bargains out there with landlords offloading property, making ‘cheeky’ offers and rents rising.