The Office for National Statistics have reported that the average monthly private sector rent in England hit an all-time high over the 12 months to September, whilst Rightmove forecasts robust 4% national average price growth in 2021 as housing priorities stay high on people’s life agendas.
Average rents stood at an impressive £725 during the specified time frame, the highest ever figure recorded by the Office for National Statistics (ONS).
When looking at the average rent on a regional basis, London had the highest median monthly rent at £1,435, pretty much double that of the national average. At the other end of the spectrum was the North East, where average rents stood at just £495.
According to the ONS, when looked at on a local authority basis, the difference in monthly rent between the most and least expensive locations was nearly £2,000.
Rightmove echoed the ONS’ positive sentiment for the buy to let market in their latest House Price Index for December 2020. The property portal forecasts 4% national average price growth in 2021 after a strong end to 2020. Unanticipated market momentum sees prices finish 6.6% up on 2019 despite a fall of 0.6% this month.
Tim Bannister, Rightmove’s Director of Property Data comments: ‘2021 has a lot of variables, and so is not an easy one to call, but with Rightmove’s unique leading indicators of buyer and seller behaviour we are confident that the housing market will continue to outperform general expectations next year as it did this. Our 2021 forecast of a 4% price rise is more conservative than the unsustainable 6.6% national average seen this year.’
‘There’s likely to be a lull in quarter two unless the stamp duty holiday is extended, but for many buyers its removal will not be make or break, though may lead them to reduce their offers to a degree to compensate for the higher tax, and indeed many sellers may be prepared to help to mitigate their buyer’s financial loss.’
‘First-time buyers will remain largely exempt, so in most cases will be no worse off. The maximum savings of £2,450 in Wales or £2,100 in Scotland are considerably less decisive than the £15,000 available in England for a house costing £500,000 or more, which does however only apply to a small part of the market.’
Rightmove aren’t the only ones who are anticipating a strong year for the property market. JLL expect prices to increase by 5% in 2021, followed by an 8% increase in 2022, 5% again in 2023 and 4.5% in 2024. As well continuous house price increase in the coming years, JLL also expect the nation to experience rental growth each year between 2021 and 2024. Rental supply continues to be completely outweighed by demand throughout the UK, resulting in properties being let for a premium. JLL forecast that we will see rental growth of 5.5% in 2021, following by 3% each year after that up until 2024.
Of all of the regions in the UK set to experience rental growth, Manchester, Birmingham and Edinburgh lead the way. All three cities are expected to see 3% rental growth next year, with Birmingham set to see 16% growth before 2024, and Manchester an extremely impressive 16.5%.
This overwhelmingly positive market sentiment offers a great outlook for the coming year after a tumultuous 2020 for all, and the next few years are set to be extremely profitable for those looking to invest in the UK property.
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