Market News
Importance of rented sector highlighted
01/03/2010
Government figures have confirmed the increasing importance of the private rented sector (PRS), with a growing proportion of households relying on the sector for their housing needs.
The Communities and Local Government's English Housing Report, published last week, shows that the number of households renting privately has risen by one million since 2001, from 2.1 million to 3.1 million in 2008-09. The PRS now accounts for 14.2% of all households in England, up from 12.7% in 2007 and 10.1% in 2001.
Other key findings from the CLG's report include:
- The number of owner occupier households decreased from a peak of 14.8 million in 2006 to 14.6 million in 2008-09. The proportion of households in owner-occupation has been in decline since 2003, falling from 70.9% to 67.9% during the period
- The proportion of social renting households is also in decline, falling from 19.5% in 2001 to 17.7% in 2007, although there was a slight pick-up to 17.8% in 2008-09
- 83% of private renters are either ‘very satisfied' or ‘satisfied' with their home - higher than the social housing sector (78%)
- 41% of private renters rely on the PRS for their long-term housing needs and have no intention of purchasing a home
- The PRS provides housing for a wide range of age groups - 48% of private renters are aged 34 or under, with 22% in the 35-44 age group, 12% in 45-54 group and 16% over the age of 55
- The PRS encompasses a wide range of economic status - 61% of households are in full-time employment, 9% in part-time work, 5% are unemployed, 9% are retired and 17% are classed as ‘other inactive'
- There are 3.3 million properties in the PRS, 48% of which are located in ‘suburban residential' locations. Just 8% of PRS property is based in city centre locations
Nigel Terrington, Paragon group chief executive, said: “The CLG's figures highlight the diverse range of households who call the private rented sector home. The sector's importance to the UK's housing needs is growing annually as increasing numbers of people decide to rent - owner-occupation has been in decline since 2003 and we believe that this trend will continue as potential buyers are either unwilling or unable to step on the housing ladder. The UK's population is forecast to grow from 61 million today to 71.6 million by 2033, but housing completions aren't keeping pace with household formation and there is growing dislocation between people's desire to purchase and their ability to do so.
“The Government must recognise the importance of the PRS to the UK's housing needs and foster an environment that encourages the continued investment in the sector by individual landlords. It needs to ensure that the sector isn't dominated by red tape and that there is available finance to enable landlords to expand the number of properties in the PRS. If the sector is unable to grow to meet demand, we are likely to experience rental inflation and people, including the most vulnerable households, being priced out of the sector.”