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Rental prices to rise by over a quarter in 10 years

Rental prices to rise by over a quarter in 10 years

Rental prices are set to climb by more than a quarter across the course of the next ten years

Investors in the UK are increasingly looking for reasons to put their money into the rental market, especially now as it becomes more expensive and more difficult to purchase suitable homes to let than ever before. However, according to the latest study, there are real reasons to be positive at the moment, with the long-term outlook – the real staple of the rental sector – remaining very strong.

According to the latest report published in the last week by Association of Residential Letting Agents (ARLA) and the National Association of Estate Agents (NAEA), the next decade looks good for the rental sector in the UK, with monthly rental prices likely to grow by more than a quarter between now and the end of the year 2025.

All in, the average price of rent will climb from the current national mean of £134 per week to £171 per week by 2025, which will mark an increase of some 27 per cent.

This strength in the market is likely to be underpinned by the continued falling rate of home ownership across the nation, as people either choose to rent because of the freedom it gives them and the ability to move as and when they need to for their career, or because they simply can’t afford to buy and need to rent instead.

In the next decade, the report from the two organisations said, the rate of home ownership will fall by seven per cent, dropping from an already all-time low of 64.8 per cent. Meanwhile, the number of households who are renting rather than buying will rise by nine per cent in the same timescale. This will mean an increased demand that helps to push rental prices, and returns, ever higher.

As well as a rising rental price over the next decade, the other big change that can be expected before the end of 2025 is that house prices, capital gains in the eyes of investors, will also keep rising. Between now and 2025, it is expected that prices will climb by an impressive 50 per cent.

This article has been provided by Experience Invest.

Image credit: Shutterstock

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