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PRS Growth


Since 2012 there has been a growth of 24% in the private rented sector in the UK, new research has shown that one in four will be renting rather than owner occupiers.

In the last 10 years the private rented sector has doubled and this growth is expected to continue to 5.79 million households while 68% of renters expect to be living in the sector in three years’ time.

Many young workers are taking full advantage of this flexibility which allows them to move from location to location without any of the costs that are associated with the buying or selling of a property.

These affordability constraints are affecting some tenants’ plans for house purchase; the high prices are resulting in a longer stay than originally expected within the PRS while they save for a deposit.

The continued growth of these large scale investments within the Build to Rent sector which are professionally managed rental accommodation in purpose built blocks is a relatively new market in the UK, and although it has not been around for too long it is already worth an estimated £25 billion.

Recent surveys have found that the predominant type of household in the PRS is couples living without children, closely followed by those living on their own. These households alone count for 59% of those living in the private rented sector.

Across the UK 12% of individuals living within the private rented sector are sharers however this rises to 26% in London and around a quarter are families with children.

The results of a recent study show that 37% of renters are in the sector by choice, whether it be convenience or other and not due to the affordability issues of owning a home. There were many factors as to why they were renting including the flexibility of renting, not having the responsibility of owning and the ability to live in areas where they otherwise could not afford to live in. 30% of individuals renting have stated that they are doing so to save for a deposit for a house.

The majority of households living in the private rented sector are young professionals between the ages of 25 and 34, this is expected to remain as is for the foreseeable future as obtaining the deposit for a house remains an ongoing challenge.

During the next 5 years there is expected to be a rather fast growth in the number of households under the age of 25 in the private rented sector, an increase in older households is also to be expected, particularly those starting a family.

The reason behind this growth will essentially be due to the demand of units designed explicitly for these particular age groups, these tailor made studios and co-living habitats are drawing and ever increasing amount of households to the sector.

 

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