One of the most significant changes taking place in the UK residential market is the sustained growth of the Private Rented Sector (PRS), which has been growing substantially over the past 10 years. The sector has nearly doubled since 2002 with private renting now estimated to account for around 20% of all households. This growth looks to continue in the medium term with the number of households in the PRS expected to rise to 5.8 million by 2020.
Since 2012-13, private rental has been the second largest housing tenure in England behind owner occupation, larger than social housing, while home-ownership levels have fallen. In London, privately rented households account for as much as a third of homes.
The department for Communities and Local Government (“DCLG”)has forecast that, due to population growth and growing demand, the UK will need more than 1 million extra rental homes to meet demand over the next five years and this estimate is supported by other professional economic forecasters.
The Government is leading a number of initiatives to support PRS, particularly in London where an annual 5,00 target for new rental homes has been announced and the use of public land to support ‘Build to Rent’ development has been encouraged. The Private rented Sector Taskforce was established in 2013, which included a £1 billion ‘Build to Rent’ fund to help kick start PRS development and to build 10,000 homes specifically for private rent.