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Rents predicted to increase 15% by 2020

Rents across the UK are set to rise considerably faster than house prices over the next three years, according to the chief operating officer of one of the UK’s leading property franchises.

Dorian Gonsalves, of Belvoir, which has a network of 300-franchised offices nationwide, predicts a 15% increase in rents by 2020, on the back of what he described as “a raft of recent anti-landlord government policies in the past year”, although the rise in rents will vary from region to region.

New measures include increasing stamp duty costs, introducing tougher mortgage lending criteria, and removing mortgage tax relief for landlords, which could see many landlords make a loss. In addition, the government’s failure to increase the availability of social housing for rent has resulted in a real shortage of good quality rental accommodation in the private rental sector, according to Gonsalves.


He commented: “Throughout 2017 Belvoir will continue to work with decision makers and we hope that some of the government’s recent changes will either be reversed or incentives will be launched to help drive up the supply of rental properties. This would then bring down rents and benefit millions of tenants, making for a healthier rental sector.”

Belvoir’s recent Q3 rental index revealed that 88% of offices had reported an increase in demand for houses to rent. Research shows that 86% of tenants – who make up about 6m households – had less than the £8,838 needed for a 5% deposit on the average home and are therefore unlikely to be able to buy a property.

Gonsalves continued: “People from all walks of life, including students, migrant workers and professionals with families, are struggling to meet stringent lender affordability ratios.

“When someone is not in a position to buy, they obviously start looking for somewhere to rent, but unfortunately, government policies seem to lack any direction, and have done nothing to benefit either landlords or tenants, so tenants could find it more difficult to find good quality suitable accommodation in 2017 and beyond.” 

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  • icon

    Property investors should be aware of the risks posed when recommended to 'professionals' who might be able assist with funding auction or other property purchases. The recent strike off of Chelmsford property lawyer Mike Alexander for dishonesty serves as a warning to all not to take short cuts when seeking funding and putting in place security for that funding.
    Google 'Michael Alexander Struck Off Legal Futures' for more details.

  • G romit

    Sec.24 Finance Act 2015 aka 'TenatTax will see a significant number of Landlords exiting the market, and many other forced to increase rents markedly just to pay the extra tax. If the outcome of the Irish experiment is repeated here in the UK (their equivalent to s.24 was a lot milder in operation) then rents would rise by 50% over 3 years, far more than Belvoir is predicting.

    Factor in possible interest rate rises, lending restrictions, improvements to meet minimum energy efficiency requirements, possible compulsory licensing means costs are only going in one direction and with it so will rents. Belvoir are significantly downplaying the likely rises that is going to take place.

  • icon

    I would say that this is an underestimate!


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