Renting In London: The Coming Boom

Research

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An independent research paper undertaken by Cluttons and written by Professor Michael Ball, from the University of Reading, has tackled the subject of the lacking supply of housing in the capital. Their report,  Renting In London: The Coming Boom, claims that rent rates will significantly increase over the next ten years due to a lack of supply.

The Government has predicted that the number of households in the capital will rise by roughly 38,000 every year for the next 16 years to 2028 while optimistic estimates put the number of new homes to be completed each year at around 21,000. This huge deficit between household growth and new home completion will create an extremely competitive market where people will be forced to pay more, squeeze into existing homes or simply leave for other areas of the country.

The alarming supply deficit does offer an opportunity for London’s residential investors to provide long term rented accommodation for those wanting to live in London. In the coming years income yields are predicted to rise, along with capital growth, and Professor Ball predicts an average rent increase of 5% each year for the next ten years, exceeding predicted house price rises of just 4% per annum.

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