Over the next 5 years, rent in the UK is expected to rise by 15% as the number of rental properties declines and the demand from tenants continues to rise.
Following the recent tax changes, small landlords are beginning to sell up due to the withdrawal of tax breaks and the added 3% on stamp duty on second homes. This does not correlate with the demand from tenants, though, as more people are looking to rent as they cannot afford to buy their own homes. According to RICS, this is the eighth consecutive quarter that the number of rental properties on the market has fallen.
As a result, by 2023 rents are predicted to be up 15% from what they are now with East Anglia and the South-West of England likely to see the sharpest growth over this period.
Conclusively, there is a general need for more build-to-let developments as the supply of rental properties diminishes and average rental prices rise. This would ultimately benefit both developer and tenant as there will be a high demand for comparably affordable rental properties and no shortage of tenants looking to let.
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by Steve George