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Investment in purpose-built PRS forecast to hit £70bn within five years
Investment in UK private rented sector (PRS) housing has soared in the past 18 months and is now forecast to hit £70bn within five years.
A report published today by estate agents Knight Frank estimated that the sector was worth £25bn – up from £15bn at the start of last year.
It added: “The pace of growth in the sector between now and 2022 is set to increase, with our estimates showing total investment will hit £70bn in five years’ time.”
Almost one in four households will be living in PRS homes by 2021, according to the report.
A poll of more than 10,000 people living in PRS homes found that more than two-thirds expected to still be living in rented homes in three years’ time.
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Professionals aged 25-34 make up the largest proportion of households living in PRS housing. More people are expected to join the sector that are both younger and older than this traditional bracket.
The key concern for tenants when looking at rental property is affordability, followed by location, which is seen as much more important than the size of the property.
Tim Hyatt, head of residential lettings at Knight Frank, said: “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 [the report] also highlights an expected rise in older households over the next five years.
“The number of people renting out of choice rather than due to affordability of ownership constraints is an interesting indicator of how the PRS market will continue to thrive in terms of tenant demand.”
