Based on current rates, tenants privately renting are expected to make up 50.7% of the housing market by 2039.
VeriSmart, a letting compliance firm, recently analysed data of the UK private rental sector and homeowning market. The research revealed if the present rates continue there will be more people renting than owning a home in 20 years. Currently, the UK has the fifth highest number of tenant occupiers out of all 28 EU nations.
UK likely to become a nation of renters
Homeowners presently make up 65% of the housing market, which is a fall of 5% since 2010. VeriSmart forecasts renters will account for 55% of the housing market by 2045. The high cost of property in the UK has led many to remain in the rental market. In some regions of the UK, it’s even cheaper to rent than buy in terms of monthly costs.
Jonathan Senior, chief executive officer of VeriSmart, stated: “This was initially driven by consistently buoyant house price growth coupled with stagnant wage growth providing no other option but to rent, however, social rental numbers are falling, Build to Rent is growing in prominence, and there has been a number of tenant friendly changes to the sector.
“All of these changes are making the rental sector a more attractive place to be and as a result, we are seeing more of us opt for it and stay there for much longer than we may have traditionally.”
Generation Rent leads rental demand
As Generation Rent gets older, renting is expected to remain popular. Last year, research revealed that over 50% of adults under the age of 40 are expected to be renting privately-owned accommodation by 2025. Resolution Foundation also found that up to one third of young adults will never buy a house.
“We are currently seeing a shifting mentality in the way we choose to live our lives and for Generation Rent, in particular, there is no longer that urgency to make it out of the rental sector and secure their own ‘piece’ of bricks and mortar,” Jonathan Senior commented.
Build-to-rent is key to boosting supply
To keep up with the growing demand of the rental market, build-to-rent properties can play an important role. Build-to-rent developments are performing strongly in regional cities, like Manchester, Leeds, and Birmingham, and larger schemes are on the way in these thriving cities.
The build-to-rent sector is helping increase housing supply with high-quality rentals in convenient locations. Often with appealing amenities, such as pools, gyms, and communal areas, build-to-rent properties are expected to continue to be attractive options for young professionals.
