The private rented sector has rallied against the backdrop of a global economic crisis, growing to such an extent that its aggregate value has risen by 36% in the last five years. This has led the market value to stand at £893 billion, equivalent to 18% of the total value of all UK housing.
The global economic crisis, which caused the worth of the UK’s housing stock to drop by around 6.5% less than at the peak of the market in 2007, seems to have had little effect on the rental market which has boomed substantially and research specialist Savills predict that this boom is going to stick around forecasting growth of 20% in the next five years.
The rental market value stands at £893 billion, equivalent to 18% of the total value of all UK housing.
This flourishing sector has been driven by a younger generation who are now renting in higher numbers than ever before as more youngsters choose to attend university; renting tends to last beyond most students degrees as younger people’s access to mortgages continues to reduce as banks tighten their grip in the backdrop of an economic crisis.
Today’s youth now live in a world with reduced accessibility to homeownership - at one time, it was widely accepted that young couples in their early twenties could buy a property and settle down. However, this is no longer the case as first-time buyers continue to struggle to get their foot on the property ladder and have to remain renting for far longer than in the past.
Students at universities tend to situate themselves in urban locations with most attending city centre campuses; 20-34 year olds represent 36% of the adult population in city centres- this has led the number of private rented sector households to rise by 77% in the last decade in cities such as Birmingham, Leeds and Manchester.
Housing prices are also beginning to hit the heights they reached before the market crashed in 2007. This is largely down to a shortage of homes on the market which has caused homeowners to get an average of 93 per cent of their asking prices. House prices rose by 0.3% in a month, with the figure in London up 0.7 per cent, the next biggest rises were seen in Oxfordshire and Cambridgeshire, which recorded increases of 0.5 per cent and 0.4 per cent respectively.