PERSPECTIVES ISSUE 01 2017

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Government support
Not only is there Local Government enthusiasm for
attracting PRS into regeneration projects, but Central
Government has also responded to the opportunity for
increasing the flow of new build housing across the UK.
To show its support, which has perhaps been lacking
in previous years, Government has established a Housing
Infrastructure Fund to provide £2.3bn for build-to-rent
projects. While, as usual, there are significant hoops to
jump through to obtain this funding, it is a game changer
for developers and investors alike and shows a tangible
commitment by the Government to expand the UK’s
housing stock. The latter was further emphasised in the
recent publication of The Housing White Paper, which
supports increasing the PRS sector.
A positive outlook
The prediction for the PRS market in 2017 and beyond is
very positive in terms of demand, funding and political
support. There is a genuine focus across the whole of the
UK to deliver more PRS product.
The Private
Rented Sector
is now often
seen as the
only realistic
option for
tenure
BPF figures
Regional growth is demonstrated by the BPF November
2016 figures, which show that there is now an even split
between London and the regions for PRS units.
Rental growth levels by UK region
Rental growth across the UK for the next three years is
projected to be very positive. In general, this is fuelled by a
lack of good quality product and high customer demand.
Oct 2015 Oct 2016 % Increase
London 14,516 33,411 130%
Regions 7,112 34,415 384%
8
%
7
6
5
4
3
2
1
0
-1
Greater
London
2014
Central
London
East
South EastSouth West
Midlands
Wales North
Scotland
2015 2016 2017* 2018*
Source: Countrywide Research Lettings Index. *Data based on forecasts
£30bn is ready to be invested
in PRS across the UK.
Latest IPD data shows a total return
from residential property of 13.5%.
58% of private renters are
aged between 25 and 44.
72% of PRS landlords own just one rental property.
Only 12% own more than three properties.
Just over half (51%) of private renters are
under 35, of which 54% have no dependents.
PRS is currently worth an estimated £1.29tn,
an increase of 55% since 2010.
By 2025, it is estimated that over 50% of 20 to
39 year olds in the UK will be in the PRS (PwC).
Demand for rental properties will grow by 1.1m
households by 2021 (20,000 units per month required).
The number of households in the PRS has more
than doubled since 2001 to 19% of the population.
Build to rent pipeline of over 40,000
units across the UK (BPF).
£30bn
58% aged 25-44
51% under 35
50%+ in PRS by 2025
19% of population
13.5%
72%
£1.29tn
+1.1m
40,000 units
£
21
SECTOR: PRS