Savills expects only ‘modest’ rent falls

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National estate agent Savills has said it expects the residential rental sector to be less volatile that the house sale market during the coronavirus crisis.

‘There will be less movement in the rental markets in the next three months as movement restrictions place practical constraints on people’s ability to view properties and move’, it said in its latest briefing paper.

‘Government has announced a range of measures to help support those in the private rented sector, namely a moratorium on evictions for three months in England and extending its mortgage payment holiday to mortgaged buy to let landlords whose tenants are in financial difficulty. Government has yet to announce direct support for tenants struggling with rental payments.

‘There may be modest falls in average private rents paid as some landlords act to help tenants in financial distress. For the majority of households, rental payments will continue as normal with no significant impact on rental values in the short term.

‘There is a long-established correlation between rental value growth and income growth. We expect this correlation will continue. The coronavirus pandemic is therefore likely to result in slower rental value growth over the next year, with growth accelerating as income growth returns’.

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