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London rents set to rise faster than wages over the next five years

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.”

Poll: Do you think rental price growth in London will rise ahead of wage inflation over the next five years?

PLACE YOUR VOTE BELOW

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    With the increases in cost base that Landlords have experienced, price will have to rise to get back to previous profit levels.

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