An imbalance of demand and supply will continue to ensure positive rental price growth in 2023, according to Nicky Stevenson, MD of Fine & Country UK.
Assessing what’s in store for private lettings in the next 12 months, Stevenson believes it will be a continuation of the growth seen in 2022.
“Annual rental price growth across England and Wales is currently 9%,” she explained. “Apartment price growth is outpacing that of houses, at 11% versus 8.2% respectively. High levels of annual price growth in the prime markets of England and Wales are driven by activity in the capital.
“With the exception of the South East, at £3,792 the threshold for a premium market rent in London is more than double that of any other region. During 2022, 90% of all new rentals of £3,500 per month or more have been in the capital, of which 65% were apartments. Across the remainder of England and Wales, 94% of such rentals were houses,” Stevenson added.
However, while she expects the rental market to remain busy, the MD anticipates that the level of price growth will moderate over the course of this year.
“With higher mortgage costs set to impact profit margins, UK Finance predicts that £13bn will be lent to buy-to-let landlords for new purchases over the course of 2023 and £30bn to landlords looking to remortgage,” she said. “Both are significantly lower than in 2021 and more in line with pre-pandemic levels.
“Taxation and legislative change is once again on the government’s agenda, with changes to Capital Gains Tax to come into effect in April. The Renter Reform Bill is set to be introduced by the end of this parliamentary session in May 2023, although it will take longer for the Bill to become law,” Stevenson concluded.
