The continued rise of the PRS

The summer of 2022 could well be a pivotal one for the housing market and the private rented sector as rising living costs continue to impact a range of personal financial scenarios, affordability, savings pots and homeownership aspirations.

With house prices experiencing sustained highs, the pressure on potential first-time buyers is mounting and big decisions need to be made over whether homeownership might be an option or if a longer-term rental arrangement may be more preferable from a lifestyle and flexibility perspective.

Despite the huge volume of purchase activity seen over the past two years and homeownership aspirations still strong for many, the private rented sector (PRS) continues to grow at pace. This is evident in new figures from Statista.com which revealed that there were two million households in private rented accommodation in 2000, a figure which hit 4.43m in 2021 to signify that two and a half times more households are renting private accommodation in England than they were 20 years ago. And according to experts at LOVESPACE, the trend is only likely to increase.

Influencing factors such as marriage and relationship breakdowns, the appeal of maintenance-free rental contracts and the need for flexible accommodation were said to continue fuelling the demand for private rented flats and homes, alongside an increasing population. In addition, the costs of stamp duty and raising funds for a deposit were also reported to be deterring people from buying a house, with rising house prices making it harder for people to get onto the property ladder.

There are few signs that tenant demand is likely to slow anytime soon and opportunities will present themselves for landlords in a variety of locations across the UK to provide good quality housing for the rising population of renters. And the advice process will continue to play a vital role in helping landlords to maximise these opportunities in what remains a competitive but complex lending arena.