Rents will let rip over next 5 years

Warning that tenants face huge 25% rise

RENT bills for millions of tenants are set to soar by more than 25% over the next five years, experts predict.

Falling numbers of landlords and rising demand for homes present a “huge challenge”, the Royal Institution of Chartered Surveyors (RICS) warns in a report out today.

It is forecasting a 20% rise in house prices in the next five years. But rents are predicted to surge by an even higher 25%.

That far outstrips wages, which the Office for Budget Responsibility reckons

will grow by just under 16% between now and 2021. The yawning gap will pile pressure on tenants who, according to experts HomeLet, are shelling out an average of £743 a month on rent, with huge variations across the UK.

A survey of RICS members – letting agents and estate agents – found the number of rental properties coming on the market had stalled over the past year. It also predicts a rise in landlords selling homes over the next three years. A combination of stamp duty changes and a cut in mortgage tax relief were both cited as reasons for the fall.

The warnings come after the Government published a White Paper designed to tackle the country’s chronic housing shortage.

Simon Rubinsohn, RICS chief economist, said: “The medium term view is both house prices and rents will continue to grow at a faster pace than wages. Whether the measures announced can ease this trend remains to be seen.”