Taylor Scott International News
House prices in the UK are set to soar by 50% and rental prices by over a quarter by 20025, according to an outlook report from two key real estate organisations. At the same time the number of households renting is set to rise by 9% while home ownership will fall by 7%, says the analysis from the Association of Residential Letting Agents (ARLA) and the National Association of Estate Agents (NAEA). Other predictions for the next decade included in the report are that buying a house will continue to get further out of reach for many and drastic action is needed to fix what it calls ‘a broken housing market’. With the average house price currently around £280,000, the ARLA and NAEA Housing 2025 report, compiled with CEBR, predicts house prices will reach an average price of £419,000. It’s even worse news for those living in London where house prices are expected to nearly double in the next decade, rising from £515,000 to £931,000. For those planning to enter the rental market in the next few years, rents are predicted to increase by 27% from a current UK average of £134 per week to £171 in 2025. Again, those living in London will be worse off as they’ll need to pay 34% extra in rent per week by 2025, an increase from the current average of £234, up to £314. Lower home ownership rates amongst the working age population and the ageing of the baby boom generation will continue to drive a decline in the proportion of UK households that own their own home, the report also suggest. Currently around 62% of the working population owns their own home and that could fall to 55% in the next decade. The report says that a declining home ownership rate will boost demand for rental properties, and drive house prices up. The Housing 2025 report also predicts the proportion of private renters in the UK will increase from 20% of households in 2015, to nearly 29% by 2025. ‘Buying and renting a home is a giant step, and is out of reach for many. Rent costs are already growing at a rate that people are struggling to keep up with, and they’re due to become even less sustainable over the next decade, particularly when the new landlord tax sets in, which will put off many would be landlords from entering the market,’ said David Cox, ARLA managing director. ‘If we’re to see the property market lifted out of its current state, we need to help the rental market from top down as well as bottom up, ensuring landlords are not penalised for their choice of income, and they can in turn give tenants the best possible price and service they deserve,’ he added. According to Mark Hayward, NAEA managing director, ongoing house price inflation, combined with low wage inflation, tighter lending restrictions and… Taylor Scott International
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