The Sales Market is looking to be out performed by the Rental Prices Increase.
Rental prices increase. In the UK over the next 5 years are set to increase faster than the sales market. According to predictions, Landlords can look forward to an increase in their income for the foreseeable future.
The difference in house prices compared to that of the rental figure will be “considerable”. The figures forecasted by Savills property consultancy, suggests this will be the case between the end of this year and 2021.
The figures for the rental market over the five-year period will on average increase by 19%. During this period the sales market will only see on average an increase of 13%, giving a 6% on average difference. The figures for our capital will be even further apart. Savills have indicated that the rental markets increase will be on average 24.5%, with that of the sales market only achieving 10%.
Savills have implied the reasons being the “post referendum economic uncertainty and weaker consumer sentiment. This means there will be a higher demand for tenants and a lower demand from home buyers during this stretch of time.
The Timeline Increase
The increase in these rental prices are expected to start climbing faster next year at a rate of approximately 2.5%. This rise will see increases of four and five percent during 2018 and 2019 respectively, before this starts to slow. This slowdown will just be a little in 2020 and 2021.
If we compare these figures to that of the sales market. Home buying is not expected to change at all during the next year, then grow by 2% and 2.5% in the years to follow. This still shows an impressive growth for the sales market.
With these predictions and the UK economy, the populations uncertainty is being highlighted. The next 5-10 years in the property market will prove an interesting and challenging time.
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