According to figures that were revealed at the ASTL Conference last week, London is set for rental growth of 18.8% over the next five years.
In his presentation to delegates, Lucian Cook, Director of Residential Research at Savills, discussed slides which showed that while London rental prices have grown by just 0.9% in the last year, the rest of the GB has grown by 1.5%.
However, over the next five years Savills forecasts London rental prices to grow by 18.8% compared to a UK average excluding London of just 13.1%. Over the same period, UK income is forecast to grow by 15.6%, so while UK rental growth will lag behind this, rental prices in London are expected to outstretch income growth.
Benson Hersch, CEO of the ASTL says: “Property investors have had to endure a lot of change with increased taxation and regulation in recent years, at a time when rental growth has been relatively flat, particularly in London. So, it will be reassuring for them that the demand for rental property is forecast to put upwards pressure on rental prices, especially as capital growth continues to be subdued.
This demand for rental property presents opportunity for investors, many of whom may choose to facilitate capital appreciation by renovating property to let to tenants – and this is good news for the short-term lending sector.
I’d like to thank Lucian for his incredibly entertaining and informative presentation at our conference last week, which proved to be a valuable event for all who attended.”