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Research

Strutt & Parker observe dramatic increase in percentage of housing in private rented sector

Q3 2013

National estate agency Strutt & Parker’s Research Team has highlighted the dramatic increase in the percentage of housing in the private rented sector (PRS) over the past 10 years across the United Kingdom with a remarkable number of new ‘hot’ areas emerging.

National estate agency Strutt & Parker’s Research Team has highlighted the dramatic increase in the percentage of housing in the private rented sector (PRS) over the past 10 years across the United Kingdom with a remarkable number of new ‘hot’ areas emerging.

Figures from 2001 – 2011 show how significantly the landscape of this sector has changed.

Looking at the two maps of the country, it can be seen how this sector has increased significantly and has spread considerably outside the London and Southern regions and further into the East and North. In 2001, there were only 8 main areas that had between 20-40% of housing in PRS but, by 2011, there were 51 areas spread across the UK. The number of households privately renting has gone from 1.9m households in 2001 to 3.6m in 2011. This is an increase of 89% across England and Wales.

Whilst in 2001 there were only small pockets of the country that had even 10-15% of housing in this sector by 2011 the map shows the complete reverse with only a few tiny pockets having between little and no (1-10%) property in that market. The flooding of colour across the map shows how widespread this new market has become.

Stephanie McMahon, Head of Research for Strutt & Parker, explains that: “The private rental sector has changed dramatically over the past decade, and although this brings us more in line with our northern European peers we are still some way off the scale of the rental sector in countries like Germany and Switzerland. In our view it is likely that overall home ownership will remain between 60 and 70% over people’s lifetimes, but we will see much more openness to rental at different life stages and for longer time periods.”

The areas were the PRS market grew from are clearly correlated to being university cities or major business hubs but some of the new PRS ‘hot spots’ are more unusual such as Torbay, Eastbourne and Hastings.

McMahon concludes; “It is widely acknowledged that long-term rental is increasingly common, driven by factors such as whether the younger generation are able to raise deposits to buy, or indeed the older generation releasing capital from their homes for care and pensions. The varied growth of this market across the UK clearly points to a need to understand local markets rather than just the big picture.”

Listen to Stephanie McMahon discussing the growth of the PRS on BBC Radio Essex with Dave Monk.