UK PRS Expanded By 1 Million Households In 5 Years

UK PRS Expanded By 1 Million Households In 5 Years

One Million More Rented Households In UK
Since 2009 With More To Come

It has been well documented over recent years that there has been a cultural and generational shift towards renting in the UK with “Generation Rent” emerging as the dominant force in the UK property market.

The shift towards the continental style of living in rented property has been largely influenced by the difficulty for people to raise the necessary deposit and finance for property ownership.

CBRE believe that significant activity by UK Buy-to-Let property investors and foreign nationals acquiring property in major towns and cities within the UK has also contributed significantly, and the influence of these interested parties is still growing.The rental markets in Manchester, Oxford and Reading have all grown positively with over 20% of households living in the UK’s Private Rental Sector (PRS), according to CBRE’s Regional Investment Report.

Unsurprisingly, London continues to lead the way with 25% of all of the city’s households in the PRS.

The CBRE report also identifies that capital growth has outgrown rental growth for the first time in over three years, providing even more good news for property investors. However, this has in turn led to yield compression in most parts of the country, although London seems to be less affected.

Jennet Siebrits, Head of Residential Research at CBRE, commented on the findings, stating: “The robust performance of the private rental market in London, which continues to witness the strongest growth, has mostly been supported by employment growth in the business and financial sectors, affordability constraints and a lack of available mortgage products on the market. While residential rents in regional areas across the UK have not yet experienced rental prices in line with those of the capital, CBRE now expects higher rental value growth to permeate out to many of the regional towns and cities. CBRE forecasts rental growth to be at its highest in those locations where there is low house building coupled with large increases in population. In addition, the underlying economic backdrop – employment and earnings growth will be an important driver of future rents across the UK.”

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