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Rents to rise faster than house prices in next five years, says RICS

Rental prices look set to increase faster than house prices over the next five years, according to the Royal Institution of Chartered Surveyors (RICS).

When it comes to house prices, chartered surveyors said that they anticipate an increase of just less than 20% over the next five years, while rents are expected to rise at a faster rate of 25% during the same period. This is owed mainly to an anticipated reduction in housing supply in the private rented sector (PRS), as more buy-to-let landlords either exit the market or reduce the number of properties they have in their portfolios, as a consequence of tax changes.

The introduction of the 3% stamp duty surcharge on buy-to-let homes last year and the phasing out of mortgage tax relief from this April will inevitably push some landlords out of the market, and this is likely to result in more tenants chasing fewer rental properties, according to surveyors.


Jeremy Blackburn, head of policy at RICS, said supply in the market needed a “turbo boost”, while Simon Rubinsohn, chief economist at RICS, added that the “the scale of the challenge the Government faces as it announces its new approach to housing is clearly demonstrated in the results from our latest survey”.

Given the inadequate supply of housing in the UK, combined with the pressures facing the buy-to-let sector, it is not that surprising that rents are expected to rise by 25% over the next five years, according to Charles Haresnape, group managing director of mortgages at Aldermore.

He said: “This [RICS latest report] further supports our view that additional assistance is required for smaller developers which could go some way to alleviate the slow progress in addressing this [housing] deficit. In light of the housing white paper released this week, the latest RICS survey highlights the scale of the challenge the government faces.” 

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  • Brit Sixteen Sixty Four

    Rubbish, both rents and house prices are falling. With wages still frozen where is the room for these huge rises. Its all meaningless talking up the market with no evidence.


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