UK Market Drivers

Significant growth has been achieved over the last 5 years in the UK Private Rental Sector and this is forecast to continue due to the significant structural shift in the UK Residential Market

Key growth drivers – There are two key growth drivers in relation to the UK Private Rental Sector, namely:

  • UK Housing gap – Over the next 20 years there is a demand for an extra 300,000 residential units per annum, which is in addition to the current shortfall on housing within the UK of 2 million homes
  • Owner occupied / Social Housing – Owner occupation in the UK increased significantly from the 70’s but this trend has started to reverse over the last 10 years. In addition, the level of social housing within the UK is falling, due to the lack of availability of funds to invest in social housi

Shift towards the PRS – The drivers which have resulted in growth in the Private Rental Sector over the last 5 to 10 years will continue to stimulate further growth in the Private Rental Sector as follows:-

  • High level of deposits for mortgages
  • Student debt
  • Longevity
  • Government support (>£50bn)

Generation of Renters – a significant shift has occurred in the UK Market in the number of 16 to 34 year olds opting to own rather than rent accommodation – in 1991 more than 60% of 16 to 34 year olds owned their own property and by 2011 the number owning their own property had fallen to 35%

UK Market Drivers

Average age of first time buyers - the average age of first time buyers in the UK 5 years ago was 28 compared to figures of late 30s or early 40s in European and US markets – the current average age is now 38.