The latest forecast from industry experts predicts a steep rise in the Private Rented Sector (PRS), with investment almost doubling to £75bn in the next five to six years.
The prediction, from property firm Knight Frank, is outlined in its latest Multi-housing survey report, along with expectations that the total proportion of the UK’s privately rented housing market is expected to grow from 20.6% to 22%, with an additional 560,000 households predicted to be living in the PRS by 2023.
As well as making predictions about the future of the sector, Knight Frank also commissioned a survey of over 10,000 UK residents, including 5,000 people living in the PRS and 5,000 homeowners. This survey shed some interesting light on the current state of the PRS, and the differences between those currently renting from a private landlord and those who are on the property ladder.
One of the key findings from the survey is that, despite many referring to 25-34 year olds as ‘generation rent’, this age group is no longer the largest in the PRS, having been overtaken slightly by 35 to 49 year olds as more people struggle to get onto the property ladder.
As well as troubles affording a deposit or securing a mortgage, the survey revealed that unsurprisingly the biggest priority for tenants when looking for a property is affordability, with 61% stating this as their top priority. Behind affordability came location, with more than one in ten respondents saying that renting meant they could live in an area where they wouldn’t be able to afford to buy.
Tim Hyatt, Head of Residential Lettings at Knight Frank commented, “Once again, affordability has emerged as a key reason for people choosing to rent in order to live in an area where they would not be able to buy. However, average rents in Great Britain rose 1% in the 12 months to December as more landlords leave the sector and levels of stock decline. The tenant fee ban, which comes in into effect in June this year, may also result in some landlords increasing rents to offset any extra costs.”
What’s clear from the results of the report is that renting privately is a trend which is on the up, and not expected to slow anytime soon. In fact, on average, 69% of renters said that they still expect to be renting in three years’ time, with the number ballooning to 93% in respondents aged 65 and over.
With this in mind it is more important than ever for private landlords to seek professional help in the letting and management of properties to ensure a smooth rental experience for both parties.