Rents are set to increase at a faster rate than house prices over the next five years, a report predicts.

Across Britain, Savills expects property values to increase by 13 per cent by the end of 2021, with Brexit negotiations leading to little house price growth in the near-term.

Fewer people buying houses will lead to more demand in the rental sector, which will in turn push rents higher, according to the forecast.

Average rents are expected to increase by 19 per cent by the end of 2021 – and by 24.5 per cent in London, where getting on the property ladder is particularly difficult, the report said.

The renewed pressure on rental prices will be caused by would-be first-time buyers being forced to rent as housing market conditions get tougher as well as recent tax changes for buy-to-let investors.

Savills expects house price growth to be reduced over the next two years as Brexit negotiations leave home buyer sentiment “fragile”.

Expectations interest rates will remain low for some time yet, keeping borrowing costs cheap, should prevent house prices from falling across the country generally, the report said.

Savills UK head of residential research Lucian Cook said: “What is clear is the housing market does not like political and economic uncertainty and this points to a lower growth, lower transaction market across the board.”

From 2019, greater clarity over the economy should help to encourage house price growth, leading to 13 per cent growth in property values by the end of 2021.

Based on the average value of a home currently being around £214,000, Savills’ forecasts would mean a typical property will be worth around £27,900 more by the end of 2021, taking it to £241,900.

London is expected to see 11 per cent growth in property values by the end of 2021, with less capacity for growth than its neighbouring regions as prices in London have already seen some particularly strong increases, the report said.