Overall the Private Rental Sector (PRS) has doubled in the last 10 years or so, and it is expected to continue to grow to 5.79 million households while 68% of renters still expect to be living in the rental sector in three years’ time, according to the latest tenant survey from real estate firm Knight Frank.
The report says that growth of the PRS has been spurred by conditions both in the housing and labour markets. Younger workers are taking advantage of the increased flexibility of renting as a tenure which allows moving between locations without any of the costs associated with buying or selling a property.
One aspect of this is the continuing growth of large scale investment in Build to Rent or Multi-housing which is professionally managed rental accommodation, usually at scale, in purpose built blocks. This market, which has only emerged in force in the UK in recent years, is now worth an estimated £25 billion.
The research found that the most prevalent type of household in the PRS are families with children, while, across the UK, 12% of households in the PRS are sharers. In London however, the proportion of sharer households rises to 26%.
Read more: Increasing number of tenants content to rent long-term
According to the survey results, 37% of renters are in the sector through choice rather than issues around the affordability of owning a home. When asked to choose why they were renting, they identified factors such as the flexibility of renting, not having the responsibility of owning, or living in an area where they couldn’t otherwise afford to live. In terms of potential home ownership, saving for a deposit for a house was the most quoted reason for renting with 30% of respondents citing this as a factor.
‘We expect the demand for privately rented properties will continue to grow. Official household projections show 1.14 million new households being created between 2016 and 2021’, said Dr Diana Babacic, of the PRS Research Consultancy.
Young professionals aged 25 to 34 make up the largest proportion of households living in PRS, and this is expected to remain the same in 2012 with their stay in the sector further lengthening as the affordability issues surrounding home ownership, with access to deposit in particular, remaining a challenge.
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