Renting may be the new buying

Developers will start to build properties to rent rather than sell if the housing market continues to lag, predicts Savills.

Yolande Barnes, head of residential research at Savills, says that house builders and developers will look to the rental sector as sales fall and mortgage finance continues to be rationed.

Speaking at the launch of industry trade body publication UK Housing Review, she says: “We are seeing rental demand increasing and although there are some issues with oversupply, it is true to say that renting is the new selling. The space to watch is build-to-let.”

Steve Wilcox, professor at the centre of housing at the University of York, and an attendee at the event, says the rental sector accounts for about half of all household moves. Wilcox says: “The supply of private rental housing is still increasing.

“Rather than buy-to-let, the trend at the moment is ‘let to not sell’.”

But the National Landlords Association has some concerns about build- ers focussing on the rental sector.

A spokesman for the NLA says: “If developers are going to build-to-let they will be entering a crowded marketplace.

“You also have to ask what happens when house prices go up again – will developers abandon their short-term rental business models? And what happens to tenants when developers eventually decide to sell up?”