Knight Frank forecast for mainstream and prime lettings markets

Knight Frank has set out its forecast for the rental sector for the rest of 2024 - notwithstanding political uncertainty.

In the mainstream UK market, annual growth was 8.6% in July and falling, which means it should end the year close to Knight Frank’s 6% forecast.

In Prime Central London the agency forecast growth will fall to 2% this year as supply increases from the lows of the pandemic. The increase was 0.9% in the six months to June.

Meanwhile, rental values in Prime Outer London increased 0.7% in the six months to June. The agency’s forecast is 2.5% for the whole year.
Knight Frank says it will reassess the numbers once it knows more about the government’s plans for the lettings industry.

For now, it says, only two things are certain.

“First, the Labour government will introduce their own version of the Conservative Party’s Renters Reform Bill during this Parliament. Second, it has been talking tougher on landlords” says the agency.

Measures could include making it harder to evict tenants and tighter rules around green credentials for lettings properties. Meanwhile, capital gains tax could also rise in October’s Budget.

“If enough landlords sell because the new rules are too financially punitive, it will increase upwards pressure on rents … We therefore expect the next three months to provide more clarity about the longer-term future for the UK housing market than the last three.”

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Lettings Forecast