A recent report predicts that a Quarter of UK Households will be classed as Private Rentals by the end of 2021
That amounts to almost 5.8 million households being Private Rentals; an increase of 2.4 million since 2011
One in four household will be private rentals by the end of 2021, as house prices continue to soar, wages stagnate and the cost of living continues to increase.
Five million Private Rentals
At the moment, about five million households are classed as being privately rented (or 21% of the total residential properties in the UK); a quarter of these are families with children living there.
According to the report carried out by estate agents Knight Frank, this is set to rise to 5.79, over the next five years.
Knight Frank commissioned a YouGov survey of over 10,000 tenants and also spoke to 26 property market investors.
The number of Private Tenants has doubled over the last decade
The number of households living in the private rentals sector has doubled over the past decade, as the increased cost of living (and house prices) has ended the dream of owning their own home, for millions of people across the UK.
According to the survey, 68% of renters still expect to be renting in three years time.
Private Rentals – Guardian graphic – Source: Knight Frank Tenure Distribution Model, EHS, DCLG
Saving for your own home?
The most common reason for renting was saving for a deposit for their own home (30%), followed by 21% who said they rented because they could not afford to buy in the area they lived; and 18% who said that renting was more affordable that paying the cost of a mortgage.
Only 8% said they were renting due to not wanting the responsibility of owning their own home; 6% need the flexibility due to work commitments; 6% because they are downsizing; 6% who could not find a suitable property to buy in their area; and 5% who did not want to be stuck in one location.
Young professional make up the largest proportion of renters
Young professionals between the age of 25 and 34 make up the largest proportion of people in private rentals and this is expected to remain the same by 2021.
Diana Babacic of PRS Research Consultancy (one of the authors of the Knight Frank report) suggested that people will need to rent for longer in order to save up the deposit for their own home.
Expected increase in under 25’s and baby boomers renting
She also predicted that the number of under 25’s living in private rentals will increase at a faster rate of growth, as well as an increase in the number of older people (especially baby boomers).
As damning an indictment this report is on the current state of the UK property market, it represents a massive opportunity for lettings estate agents to capitalise on the situation and it looks like the lettings market will continue going from strength to strength over the next decade.
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Source: The Guardian.