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Rent prices tipped to increase over the next 5 years

Rent prices tipped to increase over the next 5 years

August 17th, 2018

Experts predict that rent prices in the UK are to increase by 15% over the next five years. According to the latest survey from the Royal Institution of Chartered Surveyors (RICS), the supply of rental accommodation is decreasing, but the demand from tenants is still continuing to rise.
Many are predicting that more landlords will exit the market this year than join it, which makes the demand rocket for rental properties and in turn prices are likely to rise.

Why is it predicted rent prices will increase? 

Demand from tenants is high and likely to increase, but as new rental properties are becoming harder to come by, it causes the cost to rent increase.

The chief economist of RICS, Simon Rubinsohn, 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.”

How will this affect renters?

It is not guaranteed that your landlord will increase your rent, however, it is worth understanding how rent increases work by looking at the government's website here. If you have a periodic tenancy, rolling on a weekly or monthly basis, normally your rent cannot be increased more than once a year without your agreement.

For fixed-term tenancies, the rent can only be increased if you agree. If not, it can only be increased at the end of the fixed term.  If you have a periodic tenancy, they must give you a minimum of one month’s notice, and for fixed yearly tenancies, you must receive 6 months’ notice.

A study earlier in the year from Santander Mortgages found that owning a home is cheaper than renting in all areas of the UK. Homeowners can save an average of £189 per month by buying their property, making that an average of £2,268 per year. Of course, buying a property does require upfront costs, but in the long term, it is an investment worth making.

Are you self-employed, a freelancer or contractor looking to own a home and move away from renting? Get in touch to speak to our friendly team about how we can help you avoid the rent increases and make a long-term investment. 

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