Rents in the UK are set to rise by 15% in the next five years, the Royal Institution of Chartered Surveyors (RICS) has predicted today.
Rents will rise by 2% this year, the RICS estimates, then climb more steeply "over the medium term" because of a shortfall in available rental properties.
The RICS attributes this shortfall to the government's decision to reduce tax relief on buy-to-let properties, making them less appealing to investors.
This policy is supposed to make properties more affordable for first-time buyers by reducing the number of second home buyers flooding the housing market. However, the RICS warned today that it could end up creating extra expense for long-term renters, including millennials saving to get on the property ladder.
"The impact of recent and ongoing tax changes is clearly having a material impact on the buy-to-let sector as intended," said RICS chief economist Simon Rubinsohn. "The risk, as we have highlighted previously, is that a reduced pipeline of supply will gradually feed through into higher rents in the absence of either a significant uplift in the build to rent programme or government funded social housing."
In short: the government needs to ensure more properties are being built to make up the shortfall, or we'll all end up paying more rent in the longer-term contracts the government wants to encourage.
The RICS said today that rent increases are "evident in virtually all parts of the country", so Refinery29 UK asked ten women from across the country to tell us their current rent per calendar month, and how much they could be paying by 2023.
Jess, 30, south-east London.
2018 £540
2023 £620
Amy, 34, Birmingham.
2018 £475
2023 £545
Clara, 28, Margate.
2018 £395
2023 £455
Jazmin, 25, south London.
2018 £780
2023 £900
Olivia, 33, Cardiff.
2018 £445
2023 £510
Anna, 31, Bristol.
2018 £485
2023 £560
Tab, 33, Manchester.
2018 £500
2023 £575
Katy, 37, east London.
2018 £750
2023 £860
Sam, 26, Cambridge.
2018 £635
2023 £730
Clare, 35, Essex.
2018 £760
2023 £875
If average pay in the UK continues to rise at the current rate of 2.6% year-on-year – a big if, admittedly, especially given the potential impact of Brexit – the average person will be earning around 10% more in 2023 than they are now. Still overall, rents are going up faster than our earnings, which means we'll continue to feel the pinch.
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