RICS: Rents up 3% in 2016 with forecast of more by 2020

The Royal Institution of Chartered Surveyors (RICS) is predicting that rents are likely to increase even faster than house prices in the next five years.

RICS forecasts a 3% rise in 2016 but warns that by the end of 2020 tenants may find themselves paying at least 25 per cent more than now.

"I'm concerned that rents might increase rapidly" says Simon Rubinsohn, RICS’ chief economist - and he blames the recent raft of tax and regulation changes as threatening to reduce rental stock and so increase demand-led rent rises.

Over the longer term, the RICS survey suggests rents could rise by an average of five per cent each year for the next five years. House prices, it predicts, could rise by 4.7% a year.

"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" says Rubinsohn.

"Discouraging buy to let could see private rents take even more of the strain."

But RICS does give its support to government plans to build more homes for sale, suggesting this could reduce house price growth.