New information from the Office of the Deputy Prime Minister provides evidence that the private rented sector continues to grow steadily, with households under 30 responsible in part for this growth.
Provisional findings from the Survey of English Housing, due to be published in full in 2006, show that the proportion of households that are privately rented has grown significantly since the turn of the century, from 10% to 12%.
John Heron, managing director of Paragon Mortgages, says: Between 2000 and 2003, we saw growth in the number of privately rented properties of over 200,000 units. The figures, when published, are likely to show the private rented sector reaching close to 2.5 million out of around 21 million homes in total. This coincides with our own research which shows demand for rented properties increasing, with almost a quarter of landlords reporting that tenant demand is growing steadily or strongly.
This underlying trend is driven by demographic trends such as the increase in the number of younger people who rent, burgeoning student numbers, growth in single person households, inward migration and growth in the UKs overall population.
The private rented sector has expanded to meet this growing tenant demand, particularly as the number of council properties has steadily dwindled over the past quarter century. In 1981 three in 10 homes were rented from councils. This proportion has now fallen to little more than one in 10. While social housing, housing association, registered social landlord, has grown from just 2% in 1981 to 6%, it has far from plugged the gap left by the sale of council homes and absence of new building.
The latest Survey of English Housing reports that the private rented sector has the oldest housing stock, with 38% of private renters in accommodation built before 1919, much less than the proportion of social renters, 6%, and owner occupiers, 20%.
Heron adds: Tenant demand is strongest for simple, decent homes, and this often means Victorian and Edwardian terraced properties which are perennially popular in Britains towns and cities. The fact that these homes are older than average doesnt mean that they are necessarily of poor quality. Many are well appointed, and of course landlords are required to adhere to all the relevant legislation, including the new Housing Health & Safety Rating System when it is introduced next year.
Finally, the survey highlights the growth in the proportion of households under the age of 30 who are renting, from 33% to 40% between 2001 and 2005, while the proportion of those under 30 who are buying with a mortgage fell from 40% to 36%.
Heron says: Increasingly, younger people are choosing rented accommodation, often living in shared properties with their friends. This is not just because of affordability constraints, but also because they value the flexibility and lifestyle benefits of living in a rented home. They can move on easily, go travelling, change jobs or share with different people, it avoids the need to commit to property purchase and leaves all their options open. For many people its a lifestyle choice rather than something they are forced into.