Categorized | International

Rental Market in the United Kingdom Expected to Grow

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As lending standards in the United Kingdom continue to tighten, and potential homebuyers grow increasingly hesitant to enter the residential real estate market, the rental market is expected to experience strong growth over the next few years.

The increase in competition for rental properties is expected to push rents to unprecedented levels. In fact, the average rent in the United Kingdom is expected to increase by as much as twenty percent in the next five years. During that time frame, it is expected that at least twenty percent of households in the United Kingdom will be renters.

With the number of renters in the United Kingdom expected to significantly grow, many investors have targeted the private housing market with the intentions of converting private residences to rental properties. The prime real estate market in London has been one of the biggest target markets for investors as capital growth is supposed to increase by more than twenty-two percent in the area.

Even as rent prices skyrocket over the next five years, there is little indication that renters may opt to become homeowners. Homeownership is only expected to increase six percent in the next five years. While that growth is positive, it pales in comparison to the growth of the number of renters in the United Kingdom.

The rate of homeownership is not expected to keep pace with the renter’s market, as down payment requirements are becoming increasingly unaffordable for most homebuyers. Lenders do not appear ready to loosen up restrictions, particularly with the constant threat of a continental debt cris.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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