Rent Rises to Slow Down in 2015

By Simon Morris On Tuesday, January 20 th, 2015 · no Comments · In , , , ,

New research from lettings specialist Belvoir suggests that rent rises in the UK’s buy to let market are set to slow down in 2015. This week property consultant Simon Morris asks; what does this mean for UK property investment funds?

Reliable Long-Term Revenue Stream

Simon Morris is a London-based property consultant who has been featured in online publications such as Business Wire. He uses his expert knowledge of the UK property sector to advise UK property investment funds how to maximise revenue potential on their property portfolios.

Simon’s experience has shown him that rent can act as a reliable long-term revenue stream for UK property investment funds. The profitability of the rental sector depends on a number of factors including demand.

Rents to Increase by 1.8%

New research from Belvoir suggests that rents are set to increase by an average of 1.8% throughout 2015, below the Bank of England’s 2% target inflation rate.

This led the national lettings specialist to explain that a number of economic factors will see rent increases remain low or even stationary in the buy to let sector throughout the next 12 months. Factors include the uncertainty over government policies following the general election and the likely increase in interest rates that’s set to come in 2015.

Belvoir commercial director Dorian Gonsalves shed more light on these suggestions. “In 2015 we believe that rent rises are likely to be restricted by factors such as continued low disposable income amongst consumers, an anticipated interest rate hike towards the end of next year and a lower than expected forecast for economic development.”

The Demand is There

Yet despite these factors the national lettings specialist did believe that the buy to let rental market would continue to grow. They attributed this to a significant rise in demand.

According to the Lincolnshire Echo, Paul Collins, who owns the Belvoir office on Lincoln’s High Street explained: “Our past predictions for continued and sustained growth in the buy to let sector have been borne out by shifting market forces and we believe that the number of people choosing to rent – either for lifestyle or economic reasons – will continue to drive up demand for some time to come.”

Tread With Caution

In other words the buy to let market could continue to prove lucrative for UK property investment funds in 2015 for one reason: the demand is there. However, figures suggest that economic conditions could stymie growth in this lucrative market, so Simon Morris suggests you tread with caution if you’re looking to invest in rental property in the next 12 months.

Leave a Reply

Your email address will not be published. Required fields are marked *