Hamptons International has given a rental market forecast for 2021 – and it doesn’t make for happy reading.
The agency says the rental sector has recovered more slowly from lockdown than the sales market.
Current tenant numbers are down on last year in eight of the nine English regions, with few signs of any pick-up. And it adds that low income workers, particularly renters, are more likely to have lost their job or had a reduction in their income than homeowners.
This has led to a dip in rents, particularly in the South and London, the agency notes.
“We expect rents in Great Britain to fall by 1.0 per cent this year, with a similar decline of 1.0 per cent in 2021 due to a rise in the number of job losses which will constrain affordability” according to the forecast.
Rental growth will decelerate more sharply in London than anywhere else due to a combination of factors – reduced corporate demand, fewer international students, and a glut of short-let properties have been converted to long-term lets.
“As a result we expect rents in London to fall 3.0 per cent in 2020 and 2.0 per cent in 2021, before bouncing back to 3.5 per cent growth in 2022 and 4.0 per cent growth in 2023” Hamptons continues.
The subdued forecast for the rental market contrasts with Hamptons’ more upbeat long term forecast for the sales market.
It says sale prices will rise by 2.0 per cent this year but 2021 will see the wider effects of the Coronavirus-induced recession.
“Assuming a trade deal is agreed with the EU and a vaccine becomes available in the first half of next year, with no major second lockdown, we expect prices in Great Britain to remain flat in 2021” predicts the agency.
This post has originally been featured in Letting Agent Today.