Rental price growth in London is set to rise ahead of wage inflation over the next five years, according to new forecasts by Savills.
With affordability pressures in the for-sale market likely to continue pushing demand into the rental market at a time of increasing pressures on private landlords, which have led some to exit the sector, average rents are set to rise by 18.8% in the capital, against income growth of 15.6%.
New purpose-built, professionally managed homes for rent will help mitigate but not reverse this drain on supply.
At a regional level, there will be less upwards pressure on rents, with growth across the rest of the UK expected to average just 13.1% on average, Savills predicts.
Reflecting on the research, Franz Doerr, founder and CEO of flatfair, said: “With London rents set to rise faster than wages over the next five years, the average London tenant is going to be more and more hard-pressed to pull together a lump sum for a tenancy deposit.”
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