24% Growth Expected in UK’s Private Rental Market by 2021
According to the 2017 Tenant Survey from real estate firm Knight Frank, the proportion of households living in the Private Rented Sector (PRS) has doubled in the last 10 years, with continued growth expected.
The report reveals that by the end of 2021 nearly one in four households will be living in the Private Rental Sector or PRS.
Growth in the PRS has been spurred by conditions both in the housing and labour markets. Younger workers especially 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.
Knight Frank explains that affordability lies at the heart of the matter, curtailing some tenants’ plans for house purchase, resulting in a longer stay in the PRS as they save for a deposit. There is also growth in the PRS at the more economic end of the housing scale at a time when the private rented sector as a whole is changing.
UK’s Build to Rent Market Now Worth £25 billion
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.
The research found that the most prevalent type of household in the private rented sector is couples living without children, followed by those living on their own. Together, these households account for 59% of those in the private rented sector.
Around a quarter of households 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%.
Renting has become a Lifestyle Choice for Many
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.
According to official household projections, 1.14 million new households will be created between 2016 and 2021 and the rise in private rented sector households over the same time period will be 790,620.
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