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The growth of private renting

DATE: 17/02/2020


Private renting is an extremely popular choice amongst many people today. With property prices on the rise, first time buyers are finding it increasingly difficult to get onto the property ladder. Alongside this, millennials may not want to root themselves permanently to one place and so renting is a less restrictive and more flexible way of choosing where to live. According to the Office for National Statistics, the number of households in the private rental sector in the UK increased from 2.8 million in 2007 to 4.5 million in 2017. This equals an increase of 1.7 million (63%) households in the last 10 years, proving the demand for rental properties has grown.

Average Property Price

Across the UK, average property prices are higher than ever before, leaving many people struggling to save the money required for a deposit for a mortgage. This means they are often left in a situation where renting is the best option. Despite this, as previously mentioned, other people opt to rent due to the increased flexibility, with no long-term commitment required. Need to move for a job? Renting is the perfect option. Modern lifestyles mean the demand for rental properties is on the up. As stated on Move Bubble, the private rental sector will rise to 22% by 2023 – and that’s huge potential for growth. It’s also very attractive for investors and offers long-term income streams, while supporting a potential housing crisis.

Challenges

Challenges will also be faced by private landlords. Some tenants can cause major disruptive or violence issues and your property and furniture can end up being destroyed. Putting your trust in people to live in your property can be a gamble. There may also be unexpected legislative shifts. In recent years, the government have implemented major changes to the taxation of the Buy to Let, including changes to mortgage interest relief, stamp duty land tax and capital gains tax. A survey published in January 2020 by Accumulate Capital found that 53% of UK landlords would not have purchased their properties had they known how regulated the private rented sector would become. 

Huge demand

Different renters may have different needs. Generally, younger tenants in their 20’s aspire to more modern living facilities within central locations, with convenient and adaptable tenancies available. Things such as a laundry service and included bills can be pull factors to this type of renter.  The single largest group of private renters is the 25 to 34 years age band, which represents 33% of the sector with 1.5 million households, stated in June 2019 by the Office of National Statistics. Overall, a fifth of the UK population now lives in privately rented accommodation. This accounts for a lot of people and proves there is a huge demand in the market for private rental properties.

The total amount of rent paid by tenants in Britain soared to more than £50bn in 2017, according to the Guardian. This is more than double what it was a decade ago. Does this question whether there is a shift in living preferences? And will the demand for rental properties continue to grow? The UK could be on track to become a nation of majority renters if the growth continues at such a rapid rate, based on how much the sector has grown during the past 10 years.

For the brokers

As a broker, you may have clients who are private landlords. These clients are in the positive place of a secure industry, where there is a continuous demand for rental properties. As this demand grows, so will the industry. This means that there is plenty of potential for business to be written. Commercial Express can provide a solution to meet the many needs of your clients. Visit us today at https://www.commercialexpress.co.uk/

 

This is a marketing article by Commercial Express