Nearly a quarter of all the UK population will be living in rented accommodation in just five years’ time according to Knight Frank, driven largely by a huge expansion in build-to-rent (BTR).
Investment by the City in BTR is set to rise to £70 billion by 2021, the report reckons, up from the current £25 billion.
Some 65% of this money is being and will be spent in London, Knight Frank discovered after interviewing the key 26 investors in BTR.
“The strength of the UK PRS sector has grown demonstrably in recent years. As consumer demand for affordable, flexible accommodation continues to rise, PRS is firmly establishing itself as a key opportunity for institutional grade investment, due to its long-term potential,” James Mannix, Head of Residential Capital Markets at Knight Frank
Knight Frank’s report also reveals that 68% of renters expect to be renting in three years’ time rather than moving on to the property ladder, helping increase the number of private renters to 5.79 million.
Other trends driving this, it says, include the costs of Stamp Duty when buying a property, the needs of young professions to be more mobile as they move around the UK with work, and the reduction in the number of private landlords within the private rental market.
While surveying some 10,000 tenants, Knight Frank found that affordability is the key concern for them, ahead of location and size of property.
“The flexibility that renting offers has reinforced its popularity as both a sensible and accepted solution for young couples without children and those living on their own but also highlights an expected rise in older households over the next five years,” says Tim Hyatt, Head of Residential Lettings at Knight Frank.
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