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Rents to rise four times more than house prices

It’s a difficult time for Britain’s renters, as the cost of renting a property rises four times the rate of house prices.

That’s according to Hamptons’ Housing Market Forecasts research, which concluded that rising rents and falling prices will result from the higher interest rate environment we’re currently experiencing.

Rents are set to rise by 25% over the next four years, outpacing the 5.5% house price growth across Great Britain over the same period.

It’s thought that supply issues combined with rising landlord costs will contribute to this surge.

Aneisha Beveridge, head of research at Hamptons, said: “There’s a strong argument that the Bank of England’s quest to quell inflation has hit the rental sector harder than any other part of the housing market.

“A build-up of long-term supply issues and soaring landlord costs puts upward pressure on rents. And it’s hard to see any of these pressures receding any time soon, which is why we expect rents to continue rising over the next few years.”

Across the final quarter of the year house prices are set to come down by 2.5%, which represents a 7.4% annual fall in real terms when you take inflation into account.

In 2023, the transaction count is expected to decline by 19%, with completions falling from 1.23 million in 2022 to 1 million this year.

Hamptons said 2025 will mark the beginning of a new property market cycle, with London starting to outperform all other regions for the first time since 2015 with 5.0% annual price growth.

Overall, London will see the strongest growth between 2023 and 2026 of 11.5%, with prices in Wales likely to remain flat.

London rents are also likely to rise faster than the GB average in 2023 and 2024 (by 9% and 8% respectively) due to a combination of lower yields and more landlords being reliant on finance.

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