We are in an age where buying your own home is a far off dream for most. The private rented sector has doubled in sized over the last 10 years, making this sector worth an estimated £25billion. This is set to increase by 24% by 2021. By 2020 we will see 5.79 million households renting, with 68% of those currently renting not anticipating a move to homeownership. These figures are revealed by a survey conducted by Knight Frank.
This growth in rental is due to the flexibility this offers to those who may need to relocate for work, combined with the affordability issues presented by rising house prices. 30% of those surveyed stated the number one reason for renting was difficulty saving a deposit to purchase. 37% stated that they rented as they could not afford a home in the area they wished to live. Most of those renting are aged 25 to 34, 56% of those in the private rented sector are young couples living without children and individuals renting alone. 25% of private tenants are families with kids, and 12% are house sharers.
The main growth at present is in the demand side of this sector, however, many developers are now investing in Build to Rent or Multi-housing. This will provide tailored studio and co-living products and retirement rentals for the baby boomers. Dr. Babacic, of PRS Research Consultancy, suggests that “there will be a growth in the number of mature professionals 35 to 49 years old living in the PRS, but there is an allowance for a slight slowdown in growth as this is the sector of the market where absorption of any additional housing stock which comes on the market for sale would occur.”