Rental prices will continue to increase during the next three months, predicts agent Knight Frank which has revised its growth forecasts for 2023 to 6.5%, with a further 5% expected in 2024.
Across the UK, annual growth stood at 5.5% in August, according to the ONS, the highest rate since records began as the market grapples with supply and demand issues that show no sign of reversing.
Demand for rented homes continues to be driven by multiple factors including the strength of the labour market, job creation and higher mortgage rates, which are keeping more would-be buyers in the rented sector.
In the capital, Knight Frank predicts stronger growth this year and next in Prime Central London (PCL) and Prime Outer London (POL) as the imbalance between supply and demand takes more time to correct.
As a result, it expects a 23.9% increase in rental values in PCL by 2027 and a 23.3% rise in POL.
Propertymark is calling for a full review of all taxes impacting private landlords to help tackle the rental cost crisis as CEO Nathan Emerson (pictured) says its member figures in August reveal that the number of tenants registering for a property was almost 32% up compared with last year.
He adds: “Alongside building more homes, government must recognise the impact of the current tax regime on the availability of homes in the private rented sector and ultimately the costs passed on to tenants.
“What we need is a full review of all taxes impacting private landlords in order to introduce pro-growth policies that can increase supply and bring down the cost of renting for tenants.”