RENTAL HOME FORECAST - PART 1
- Built-to-rent.com
- Apr 19, 2024
- 1 min read
UK RENTAL HOME FORECAST 2024 - 2025
PART 1
The UK rental housing market is expected to experience varied trends in 2024 and 2025, with forecasts indicating fluctuations in both rental prices and housing prices.
According to JLL's Residential Forecasts for 2024-2028, the rental market saw significant growth in 2023, with rental growth reaching double-digit highs for new lets, primarily due to a mismatch between available rental stock and tenant demand. This led to an upgraded forecast for year-end 2023 UK rental growth from 4% to 6%. For 2024, a 5% increase in rents across the UK is anticipated.
The lack of new rental stock, attributed to fewer new home completions and a challenging interest rate environment, is expected to push rental growth beyond wage growth. From 2025 onwards, more competitive mortgage rates are forecasted to encourage tenants towards homeownership, potentially bringing a better balance between tenant demand and available rental stock (JLL Residential Properties).
Savills, in its Mainstream Residential Forecasts 2024-28, anticipates a downturn in housing prices by 3% in 2024 due to high base rates expected to persist into the year. However, a recovery is expected in the latter half of 2024 as rates begin to decrease, with a predicted overall 5-year growth of 17.9%.
The North, Wales, and Scotland are expected to perform strongly in the early part of this forecast period, but London is predicted to regain its position as the outperformer towards the end of the period due to improved affordability and a stronger economic outlook (Savills).
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