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Rent rises could soon outpace house prices, warn surveyors Rent rises could soon outpace house prices, warn surveyors
(10 days later)
The cost of renting in the UK could rise faster than house prices over the next five years, surveyors have warned.The cost of renting in the UK could rise faster than house prices over the next five years, surveyors have warned.
At the end of that period tenants could find themselves having to pay at least 25% more than they do now, according to the Royal Institution of Chartered Surveyors (Rics).At the end of that period tenants could find themselves having to pay at least 25% more than they do now, according to the Royal Institution of Chartered Surveyors (Rics).
Simon Rubinsohn, Rics chief economist, blamed government moves to discourage buy-to-let landlords.Simon Rubinsohn, Rics chief economist, blamed government moves to discourage buy-to-let landlords.
"In the long run I'm concerned that rents might increase rapidly," he said."In the long run I'm concerned that rents might increase rapidly," he said.
However, he predicted that house prices would continue to rise faster than rents in 2016.However, he predicted that house prices would continue to rise faster than rents in 2016.
According to Rics estimates, house prices will increase by 6% next year, and rents by 3%.According to Rics estimates, house prices will increase by 6% next year, and rents by 3%.
Rental 'strain'Rental 'strain'
Over the longer term, the Rics survey suggests rents could rise by an average of 5% each year for the next five years. House prices, it predicts, could rise by 4.7% a year.Over the longer term, the Rics survey suggests rents could rise by an average of 5% each year for the next five years. House prices, it predicts, could rise by 4.7% a year.
The government has announced a series of measures to promote home ownership, but is introducing tax changes that will make life harder for landlords.The government has announced a series of measures to promote home ownership, but is introducing tax changes that will make life harder for landlords.
From 2017, they will be able to claim less tax relief on their profits. And from April 2016, they will have to pay a higher rate of stamp duty. From 2017, they will be able to claim less tax relief on their costs. And from April 2016, they will have to pay a higher rate of stamp duty.
"Critically our principal concern with the measures announced by the government is that they are overly focused on promoting home ownership, at the expense of other tenures," said Mr Rubinsohn."Critically our principal concern with the measures announced by the government is that they are overly focused on promoting home ownership, at the expense of other tenures," said Mr Rubinsohn.
"Discouraging buy-to-let could see private rents take even more of the strain.""Discouraging buy-to-let could see private rents take even more of the strain."
However, he welcomed the government plans to build more homes for sale, saying that could help ease house price growth.However, he welcomed the government plans to build more homes for sale, saying that could help ease house price growth.
Rics predicts that East Anglia is the region likely to see the fastest growth in house prices in 2016, at 8%, while the West Midlands and the South East will also outperform the market.Rics predicts that East Anglia is the region likely to see the fastest growth in house prices in 2016, at 8%, while the West Midlands and the South East will also outperform the market.
However, the North East of England is expected to see the slowest growth, at 3%.However, the North East of England is expected to see the slowest growth, at 3%.