Rental Market Outlook for 2012

publication date: Sep 3, 2012
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

Renting in the UK

Rental Market Outlook for 2012

Based on the current statistics and conversations with landlords, tenants and letting agents, rents across the UK are likely to move in one of three directions: stay the same, fall or rise. Areas which appear stable or are falling may see rents falling further this year, while areas which are showing growth may find that disappears over the coming months.

What is apparent is rents are not likely to continue to rise over the next 12 months as much as they did in 2011. This is due to the relationship with rental levels and wages. As people's pockets are being squeezed this year, tenants are struggling to afford higher rental payments, so any rental rises, even in London, are slowing this year. In some areas, they are even falling back towards the 2009 lows.

In the future, as economic growth returns to the UK, rents are likely to rise along with wage increases. It is also likely as the type of tenant changes into a longer term tenant, a highly professional, mobile tenant and a new trend of older people who sell up and decide to rent on-going, the demand for different property types and rental standards will change.

To better understand what might happen to rents in your area over the next few years, a new forecast from Savills is worth a read. It suggests "the average annual total return for residential property across the UK will be around 6.9% over the next 10 years. This rises to 8.2% in London and 7.7% in the South East. Large scale investors should be able to achieve higher double digit returns in these locations".  


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