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Property expert, Kate Faulkner believes that growth in the private rented sector (PRS) is being partially fuelled by an increasingly high quality rental stock encouraging people to choose to rent rather than buy.
Kate, who runs Propertychecklists.com and consultancy, Designs on Property, made the claim in a report commissioned by the TDS Charitable Foundation; Has the private rented sector grown because people want to rent or because they cannot afford to buy? Click here to download the report.
The PRS in England and Wales has more than doubled in size since 2002 and in the recent English Housing Survey, it accounted for 20% of households.
Kate’s report looks in to the reasons driving growth. She said: “To understand how the PRS has grown, we need to be able to see beyond headlines about house prices to know what’s really going on.
“The main contributing factors are – as is commonly understood – a lack of social housing provision, and house price growth outstripping wage increases for many, but that’s not the whole story.
“If we look at a more local level, there are places where affordability has increased but the number of first-time buyers continues to decrease, suggesting house prices and demand aren’t the only forces at play.
“Over the same period that the PRS has gone through dramatic expansion, it’s also improved considerably. Standards of rented properties are now arguably higher than ever before. The increased quality of accommodation has reduced the ‘need’ to buy.
“Good quality rented properties are often much cheaper and more easily accessible than purchasing property, especially in the short to medium term. When high standards of accommodation are available, with the added bonus of flexibility, it can make an enticing proposition.
“There is also caution in some parts of the market, with potential buyers lacking confidence that house values will continue to rise.
“That fear, coupled with tougher restrictions on buy-to-let mortgages putting off landlords from entering or continuing in the market could lead to situation in the PRS where demand is increasing and supply is decreasing.
“More research is required into the nuances of the UK’s housing market and stock to understand affordability, renting landscapes and ultimately; to make more effective legislative decisions.”
While the TDS Charitable Foundation funds the reports, Kate retains editorial control and the opinions expressed in the report do not necessarily reflect the views of the Tenancy Deposit Scheme (TDS) or the TDS Charitable Foundation.
Kate’s latest report Has the private rented sector grown because people want to rent or because they cannot afford to buy? is now available to download as a PDF.
To read the full report, please visit: http://tdsfoundation.org.uk/programmes.
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