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‘UK Rental Market to Remain Strong & Active’ Throughout Brexit Negotiations

New forecasts by real estate agent Cushman & Wakefield (C&W) depict a resilient rental market over the course of a 5-year period, advancing at a faster pace than the housing market.

New forecasts by real estate agent Cushman & Wakefield (C&W) depict a resilient rental market over the course of a 5-year period, advancing at a faster pace than the housing market.

Given the current turbulent climate, caused by Brexit-related uncertainty, the firm predicts housing transactions and house prices will dip slightly over the next 5 years.


Nonetheless, the UK’s economy is expected to resume a strong pace of growth once Brexit negotiations have started, as the nation’s outlook will gain more clarity.


Property prices are expected to rise by 0.5% throughout 2017, by 1% & 2% in 2018 & 2019 respectively, before experiencing a significant jump in the pace of growth rising to 4% in 2020 & reaching 5% in 2021.


The rental market, which is projected to experience a faster pace of growth than the housing market, will remain “strong & active” as it will be driven not just by a greater demand from those wanting to become homeowners but still facing affordability issues, it will also be supported by strong demand from those seeking a more flexible accommodation tenure.


In terms of rental growth, the firm predicts that rents will increase by an average of 2.5% in 2017, by 3% in 2017, by 3.5% in 2019 & 2020 and will reach an annual rate of growth of 4% in 2021 – outpacing the inflation of values in the housing market.


C&W also suggests that housing starts will slip to just 134,000 in both 2017 & 2018, a decrease from the 146,000 total completions achieved in 2015.


Construction will remain short of the latent demand, despite the UK Government taking further steps in trying to combat the critical undersupply of homes - a theme which is set to continue in the years ahead, said the firm.


Government efforts, such as the recently announced £3 billion House Building Fund, are expected to have a marginal effect in increasing housebuilding activity over the course of the next 2 to 3 years, but C&W suggest these schemes will still not satisfy the huge demand for housing.


After Brexit negotiations have been completed and the terms of the UK's exit from the European Union have been confirmed, around 2019-2021, confidence is due rise, fuelled by a “supportive mortgage market and low interest rates” - with both housing and rental markets expected to grow at an accelerated pace.


Regionally, C&W expect house price growth to be stronger in the North West throughout the next 5 years, led by a robust Manchester market.


In accordance with the latter, earlier in the week, property investment platform Landbay revealed that the North West is one of the regions that have experienced the fastest rate of rental growth in the year to date.

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