For many people, it remains the only way to secure a roof over their head, for those who have been fortunate enough to secure a place on the property ladder, it may be seen as ‘dead’ money. It’s no secret that the pandemic has changed outlooks, approaches and aspirations when it comes to property and our homes. Whilst the sheer volume of residential housing transactions suggests that attitudes to homeownership remain largely positive, this should not diminish the importance, and value, attached to the rental marketplace.
This was evident in new data from Shawbrook Bank which uncovered that the value of the private rented sector (PRS) in England, Wales and Scotland grew by 5.8% to £1.4trn in the last year. The research also showed that demand from tenants has grown. In total, 42% of landlords reported that they have seen demand increase for their properties over the past 12 months. In addition, two thirds (67%) of landlords said they were confident about the future of the property market over the next twelve months, with a third (34%) of all landlords planning to buy a property in the coming year.
As house prices continue to grow, an increasing number of people are suggested to be renting for longer, with half (49%) of renters saying they expect to be renting for the rest of their life. Affordability is one reason behind these figures. However, a growing number are also choosing to stay renting. More flexible lifestyles have led to some looking for the same attribute from their property. In total, 10% said they prefer the reduced responsibility of renting, while a further 7% said that renting allowed them to live in a better location than if they bought. When asked why they were confident about the future of the property market, landlords pointed to house price growth (41%), an increase in demand from tenants (41%), the general strength of the economy (33%), and the increased rental yields currently available (26%).
This offers a fascinating take on the PRS and shifting attitudes towards it. Looking at the bigger picture, its overall strength can no longer be in question. Time and time again it has proved just how robust it is in the face of adversity and how important a role it plays within people’s lives and the wider housing market.
The increased emphasis on flexibility and reduced responsibility is something we, as an industry, should take notice of following a time when many elements within our lives have been so restrictive. How the housing market, landlords and lenders cope with this increased need for flexible living is certainly an area worth following over the rest of 2021 and beyond.
However, whatever individual trends emerge, the underlying factor remains that the importance of the PRS will only continue to grow and the influence of the BTL sector will rise alongside in line with this.
