Savills predicts rent rises

Savills has predicted that an imbalance in supply and demand for rental property will result in healthy growth in rents over the next few years.

Yolande Barnes estimates that the UK faces a total shortfall of 1.138m homes by 2016.

This shortfall is particularly evident in London, where corporate tenants are adding to the numbers seeking high end rental properties.

Data from Savills show that prime rental growth is surging with rents up 2.5% in the second quarter taking annual growth to 5.6%. This leaves rental values at just 8.8% of their peak.

Savills is forecasting that rents will end the year 8% higher than at the end of 2009. It predicts rental growth of 7% in both 2011 & 2012 for prime London rental properties.

Landlord insurance - prime rates