Soaring demand for private rental homes in England over the past few years has resulted in the private rental market going from strength to strength. A rising number of singles, couples, and families have been turning to private landlords in order to secure a suitable home in the area of their choice. Some areas have proved so popular that bidding wars have erupted amongst prospective tenants who are eager to get their name on the tenancy.
The popularity of the private rental market has been reflected in recent figures released as part of the English Housing Survey 2011/2012, published by the Department for Communities & Local Government. The data shows that for the first time since the 1960s, there are more people in England who are renting homes from private landlords than from local authorities and social housing landlords. The figures are almost equal, but private rents are now marginally ahead, with numbers standing at 3.84 million compared to 3.8 million for social housing rentals.
Driving forces behind the growing popularity of private rented homes
A number of factors and forces are thought to be behind the growing popularity of private rented accommodation in England. Some of the factors that have fuelled the boom in the private rental sector, and could result in further growth in this market in 2013, include:
The mortgage sector: With some people, namely first time buyers, struggling to raise a large enough deposit to secure a mortgage, many have turned to private rented accommodation over recent years.
Rising landlord numbers: The strength of the private rental market has brought in an increasing number of buy-to-let investors over recent years. This has increased availability of private rental homes for tenants, and could help to stabilize rental prices over the course of this year. This may make private renting more affordable and therefore more desirable.
Social housing issues: With lengthy waits for social housing accommodation in many areas, the increased speed at which private rented accommodation can be obtained will continue to sway many people who are looking to rent.
Increased foreign investment: Areas such as London have become a prime target for foreign real estate investors, with many honing in on the luxury property market. This could mean an increase in luxury properties to rent in desirable areas, which could see the number of more affluent private renters increasing.
Over the past couple of years, demand of private rental properties has reached unprecedented levels. With this trend set to continue, agencies that deal with properties to let, such as Hamptons Estate Agents in London, could experience a growing influx of applications from people who are eager to secure a private tenancy.
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