Rent rises to increase by 25 per cent over five years

According to the Royal Institution of Chartered Surveyors (RICS), the cost of renting in the UK could rise faster than house prices, increasing by 25 per cent over the next five years.

Simon Rubinsohn, RICS chief economist, claimed the increase was due to the government’s move to discourage buy-to-let landlords. He said: "In the long run I'm concerned that rents might increase rapidly.”

However, the author also predicted that house prices would continue to rise faster than rents in 2016. Rubinsohn estimated that house prices are set to increase by six per cent in the coming year, while rent will increase by three per cent.

The Rics survey suggests rent prices could rise by an average of five per cent annually over the next five years, whilst house prices are expected to increase by a slightly lesser 4.7 per cent per year. 

The government has announced a series of measures to promote home ownership, but is also introducing tax changes which will make life harder for landlords. Such measures mean from 2017, landlords will be able to claim less tax relief on their profits, and for April 2016, they will have to pay a higher rate of stamp duty. 

Rubinsohn said: "Critically our principal concern with the measures announced by the government is that they are overly focused on promoting home ownership, at the expense of other tenures.
"Discouraging buy-to-let could see private rents take even more of the strain."

The survey continued to predict that East Anglia would be most likely to see the fastest growth in house prices for 2016, at eight per cent, followed by the West Midlands and the South East at seven per cent. 

In contrast, the North East of England is expected to see the slowest growth, at three per cent.