Low supply means rents set to rise more than expected

Low supply has kept rental growth high – and it’s unlikely to slow any time soon.

Knight Frank says it expects stock levels to be particularly squeezed over the summer as high demand from corporate tenants and students exceeds available supply.

The firm has revised its rental forecasts for Prime Central and Prime Outer London in 2022 and now expect rental value growth of 11 per cent in PCL and nine per cent in POL, up from eight and five per cent respectively.

The agency’s residential research guru Tom Bill says: “The distortive effect of low supply has also kept rental value growth high. A sharper slowdown in the sales market would have boosted supply and increased downwards pressure on rents as owners let out property that failed to sell for the asking price.”

On the sales side Knight Frank is now predicting that price growth will end the year in high- rather than mid-single digits.

Written by: Houseladder