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Buy-to-let rents and house prices set to “sky-rocket”

House prices are set to soar 50% and rents more than 25% over the next 10 years, new figures suggest.

The proportion of the population renting will continue to rise, while homeownership will fall.

The new predictions appear in the Housing 2025 report by Association of Residential Letting Agents (ARLA) and National Association of Estate Agents (NAEA).


The two bodies say that drastic and immediate policy overhaul is necessary to fix Britain’s broken housing market.

The report says that buy-to-let rents are set to sky-rocket as buying a house gets further out of reach for many.

With the average house price currently around £280,000, the report predicts house prices will rise 50% to hit an average price of £419,000 in 2025.

Growth will be even faster in the capital, where prices are expected to rise from £515,000 to £931,000 in the next decade.

For those planning to enter the rental market in the next few years, the news is bleak.

Rents are predicted to increase by 27% from a current UK average of £134 per week to £171 in 2025.

Again, those living in London will be worse off as they’ll need to pay 34% extra in rent per week by 2025, from £234 to £314 a week.

Lower homeownership rates amongst the working age population and the ageing of the baby-boom generation will continue to drive a decline in the proportion of UK households that own their own home.

Currently around 62% of the working population own their home and the report predicts this will fall to 55% in the next 10 years.

ARLA managing director David Cox says: “Buying and renting a home is a giant step, and is out of reach for many.

“Rent costs are already growing at a rate that people are struggling to keep up with, and they’re due to become even less sustainable over the next decade.”

NAEA managing director Mark Hayward said: “House prices are only going to go one way, and unfortunately that is up.

“House price inflation, combined with low wage inflation, tighter lending restrictions and a shortage of affordable housing, means owning a home will continue to be distant dream for many.

“Increased rental costs will also make it more difficult for current renters to save for a house deposit as much of their income will be eaten up in rent.”


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