There is no question that the buy-to-let market in the UK is flourishing. With a lack of affordable housing stock and a growing number of people looking to rent as a long-term alternative to buying, the Private Rented Sector (PRS) is growing at an unprecedented speed. Industry experts anticipate that the proportion of households in the PRS in the UK will grow to 24% by 2021, equating to almost one quarter of the population renting in the sector. The cause of the burgeoning growth of the UK rental market comes down to a rising population and undersupply of affordable housing.
One of the largest contributors to the PRS, the percentage of 25 to 34 year olds privately renting more than doubled between 2003/04 and 2014/15. The reasons behind the large number of young professionals choosing to rent are numerous and span from difficulty in saving a deposit, to preferring the renting lifestyle.
With the population in the UK expected to rise to 74 million by 2039, and approximately 240,000 - 250,000 new homes required each year to keep up with demand, it is clear that the issue of supply and demand will only exacerbate. This will put more pressure on the rental sector to provide high-quality homes for tenants.
Estimated value of build-to-rent sector by 2022
Annual shortfall of new build homes in the UK
Anticipated UK population by 2039
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