The demand for rented homes in the UK looks set to grow according to new reports.
In recent years, there have been many reports of a generational change in attitude towards homeownership and new research suggests that there could be a considerable rise in homes available for rent in the coming years.
A number of factors contribute to these predictions with rising house prices creating a larger barrier to entry, leaving many in the younger demographic viewing renting a property as the most suitable option for the long term.
This research forecasts that by 2022 just over 1 in 5 of all households within the UK will be rented, a 1.1% increase on the current proportion of homes rented privately.
There seems to be a clear demand for high-quality rental homes and the market appears to be responding to this demand.
Reports last month detailed substantial growth in the Build to Rent sector with just over 25,000 build to rent homes built over the 12 months leading to March 2018, with estimations indicating continued growth in this sector.
‘Build to rent only accounts for a small part of the market today, but we estimate there are more than 100,000 units in the pipeline and more to come,’ the report detailed.
The report also found that it is not just landlords and investors bringing homes to the rental market, as inherited homes are often put up for let instead of sale. Recent figures from the Office for National Statistics showed an average of 200,000 homes changing ownership through inheritance each year and 16% of all landlords acquiring their home without purchasing it.
Government schemes such as Help to Buy and the scrapping of stamp duty have helped many first time buyers on to the ladder, however, many are still relying on the bank of mum and dad, suggesting that there is still some way to go to solve the affordability issue.
Until this has been resolved, renting may become the more suitable option long term, and the recent English Housing Survey revealed that 46% of tenants aged 25-34 were happy to be renting a home.
With homeownership becoming less common, there is strong demand for rented homes that will need to be met, and according to the research, the UK will need 6 million rented homes in total by 2025.