The need for a more flexible lifestyle and the ability to afford to buy property points to the fact that the PRS (Private Rental Sector) is expected to double over the next 6 years. This will be matched by a decline in homeownership. There are currently 4.5 million privately rented houses in the UK which means we could be looking at 6 million over the next 6 years.
Knight Frank has predicted that the proportion of the UK’s rental housing market is set to grow from 20.6% to 22% by 2023. The growth is likely to come from build to rent schemes as well as buy to let. Rents are also expected to rise by 7.5% over the next 3 years due to the dwindling supply of accommodation matched with more demand.
In Huntingdon and St Ives, we have seen an increase in demand of 9.25%. Property giant Countrywide estimates that rents are likely to rise by 2.5% in 2019 3% in 2020 and a further 2% in 2012. Interestingly 50% of tenants living in the PRS are aged over 46 with only 39% under 35. It might be surprising and looks like a result of people seeing this as the most convenient option following a marriage breakdown or relocation for work.
Not surprising there are quite a few differences in the needs of the two markets (also known as silver renters and millennials).
- A millennial will require high-speed internet satellite TV and parking or bike storage.
- They are also quite energy conscious so energy saving features are a bonus and safe streets 76% reported this as important and will be willing to pay up to £25 per month extra in rent.
- Access to or onsite gymnasium and a cleaner also rate on the scale.
- In contrast, the mid to older generation will want to have amenities close by, schools and connections to the local community high on the list.
- Both groups expect a pet to be allowed and more are looking for white goods to be supplied.
Another topic that is coming into question by both types of renter is the flexibly of the deposit with more ‘no deposit options’ are now on the market.
The take out is that the market is increasing but with that increase, it is becoming more sophisticated.
If you would like to find out how the changes in the rental market will affect you in the future just give the team at Maxine Lester’s a call on 01480 494939.