‘Rents will rise faster than house prices in 2020’
Rents will increase faster than house prices in 2020, surveyors predict.
The Royal Institution of Chartered Surveyors’ housing forecast said a lack of impetus in sales activity suggests house price growth will rise modestly throughout the year, with the forecast predicting a 2% increase.
It said property professionals have cited sellers’ caution over selling during the Brexit period.
Stretched housing affordability in some parts of the country also points to material pick-up in activity during 2020 seeming unlikely, RICS said.
Rents are expected to increase by 2.5% next year as the sector continues to struggle with a lack of supply.
In London, rents are expected to rise at an even faster pace of 3%.
RICS economist Tarrant Parsons said: “Challenges around affordability and low stock levels will continue to drag on the market, and Brexit uncertainty could resurface as the next deadline draws closer.
“As such, we expect house prices to rise by just 2% next year, with the outlook for overall sales volumes broadly flat.”
Hew Edgar, RICS UK head of engagement and cities strategy, said the housing sector needs a long-term approach.
He said: “In the past, many Government administrations have implemented a piecemeal approach to housing and tinkered around the edge of the main issues.
“This needs to stop in order to make real and substantive enhancements to the UK’s housing sector – whether that is the pace and quantity of housing delivery, quality standards, or energy efficiency.”