Property Consultancy Predicts Significant Rise In Property Prices And Private Rent
CBRE, an independent property consultancy, predicts that the property market is set to continue growing despite the present Brexit uncertainty and political turmoil.
According to CBRE figures, forecasts of 1.8% growth are predicted in 2019; statistics that seem to suggest the market will flatten rather than decrease throughout this extremely traumatic political year.
This figure of growth will then kick start modest growth over the next five years. 2.3% growth is forecast for 2020, 3.4% in 2021 and 3.7% in 2022. Following this upward growth, CBRE then predicts that the market will flatten again with 1.3% growth in 2023.
This means that the compound growth between the present date and 2023 is expected to be 13.1%.
The good news for the remaining landlords in a contracting market is that rents are also set to increase by 11.4% over the next five years.
In 2019, the average property’s rent is set to increase by 1.3%; this will rise to 1.9% in 2020. From 2021, rents are set to increase by an average of 2.6%, with 2.5% rental increases in 2021, 2.7% in 2022 and rent will rise by 2.6% in 2023.
Whilst residential property is reaching an affordability limit and wages continue to restrict a person’s ability to save money, there has been increased investment in build-to-rent property. It is suggested that the current £2.1 billion worth of investment will increase in recent years as more people are forced to rent privately and more home builders look to cash in on this increasing market.
Miles Gibson, CBRE’s head of UK research, said: “We expect rather weak house price and rental growth over the next year, but we think that the lack of supply and low interest rates for mortgages will hold prices up. Demand for rental homes will increase once more after a two-year period of weakening tenant enquiries, particularly from lower-earning younger people. House prices are approaching the limit that current incomes and credit conditions can support, and the ability for buyers to bid up prices is limited.”