Industry News
England’s private rented sector could top 5 million homes by 2025
Research by a specialist rental platform has led it to forecast that the private rented sector will continue to grow and could reach 5.2 million homes in the next couple of years. Over the past ten years, the number of
private rentals in England has risen by 18.8 per cent, increasing from 4.1 million homes to just under 4.9 million. Te fastest growth in this time period has
been in the South West where the sector’s stock level has increased by 31.2 per cent from 404,768 homes to 530,975. Te West Midlands market has grown
by 25.4 per cent, in London the market has grown by 21.7 per cent, and in the North East, the number of PRS homes is 17.3 per cent higher than it was a decade ago. Based on these historic growth
trends, Ocasa has forecast the Private Rented Sector will grow by a further 6.4 per cent between now and 2025. Tis is equivalent to an additional 313,906 homes, which will bring the national total to just under 5.2 million.
Regionally, the most new homes are expected to be added in London (68,336), the South East (47,500), and North West (38,075). Meanwhile, the smallest increase in market size is forecast to come from the North East where just 13,291 new homes will be added by 2025.
Sales and Marketing Director at
Ocasa, Jack Godby, commented: “Te Government is trying to dampen the Private Rented Sector by making it less and less cost effective to purchase additional homes for investment purposes such as buy-to-let. But there is still a huge need for rented homes in England - not every can or wants to buy their own home.
Average monthly rents in Great Britain hit record highs
T
he growing gap between the supply and demand for private rentals is pushing monthly charges up to their highest levels
across all parts of the country and creating fierce competition between tenants looking for a home. Increases in mortgage rates, particularly for first
time buyers, and fewer mortgages being available since the Kwartend mini-budget has meant many aspiring buyers are having to remain as renters for longer than they planned. According to figures from Rightmove the average
monthly private rent in Great Britain is now £1,162, up 11 per cent on a year ago, and up by 3.2 per cent since the Summer. Tis is only the third time that rents have risen by 3 per cent or more in a three- month period. Te highest average monthly rent as always is in
London and now stands at £2,343, up by 16.1 per cent on a year ago. However, many of the biggest year on year increases have recently taken place outside of the capital. Particular hot spots in the rental markets have
recorded annual increases of upto and over 20 per cent, with the biggest jumps since 2021 recorded at: Newbury (up 22.2pc to £1,226); Manchester (up 20.5pc to £1,157); Cardiff (up 19.6pc to £1,041); Sale (up 18.8pc to £1,037); Wilmslow (up 18.3pc to £1,142); Edinburgh (up 18.0pc to £1,182) and Torquay (up 17.7pc to £899 a month). Some good news is that in almost every region of
Great Britain, with the exception of London, there are more homes available to rent now than there were earlier in the year. Sadly this is not easing the problem as the number of properties becoming available is still not keeping up with the growing number of people looking to move. Te widespread shortage of available properties
has sparked competition between tenants and seen a rise in the phenomenon of bidding wars, “tenant auditions” and landlords demanding six to 12 months rent in advance. Far more homes will need to come onto the
market and be made available for rent before the current levels of demand can be met. According to the lettings and property agency Foxtons an average of 29 renters are competing for every property in London – slightly down on the 33 applicants per new listing in the late Summer – the highest levels seen for at least three years Te market is seeing lots of home-movers looking
to rent homes in, or close to, cities across Great Britain. During the pandemic, many people chose to move to coastal towns and the countryside, but there is now a reversal of that trend with cities like Manchester, Cardiff and Edinburgh among the areas with the fastest rising rents. Studio flats have overtaken one-beds as the
8 | HMMDecember/January 2023 |
www.housingmmonline.co.uk
Some good news is that in almost every region of Great Britain, with the exception of London, there are more homes available to rent now than there were earlier in the year
most in-demand flat type for renters, with agents suggesting stretched budgets and the returning popularity of city centres are contributing to the shiſt. Tere are now four times as many tenants looking for a studio flat as there are studio flats available, a 71 per cent increase on a year ago. John O’Malley, CEO at Pacitti Jones in
Glasgow, says: “In essence younger professionals want the same things as they always wanted – to go out and have a good time – and this means being back in the heart of our cities and enjoying the social amenities available.” And it’s not just the younger generation
looking to live in vibrant city centre locations: “Te dramatic rise in the cost of living means that we are now starting to see older people downsizing to apartments to reduce household bills. And this is something we expect to see more of,” said O’Malley.
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