Renters will outnumber homeowners in the UK in the next 20 years, according to new research by the letting compliance firm VeriSmart.
You would be forgiven for thinking that this was purely due to the sheer amount of people struggling to get on the housing ladder, but it is at least partly down to people simply choosing to rent as a lifestyle choice instead out of necessity. There are a number of compelling reasons why people would choose to rent – whether it’s in a convenient location or just the flexible nature of renting a property.
The latest data shows that homeowners now make up of 65% of the population, which is 5% less than it was in 2010, whereas the number of tenants in the private rental sector has grown by 5%. We currently have the fifth highest percentage of tenant occupiers in Europe, just behind Germany, Austria, Denmark and France. Of course, the UK is still a nation of people who aspire to own a home one day but, if the seven-year trend persists, this could start to change very quickly. VeriSmart believes that tenants will make up 50.7% of the market by 2039, and this figure will grow to 55% by 2045.
Naturally, this is fantastic news for the buy-to-let sector. There is already a supply and demand issue in the UK and with renters slowly turning into the majority, the demand will only get stronger, which will see a serious boost in rents across the country. This is particularly the case in larger cities, like Manchester, Birmingham and London. The capital in particular has a serious supply and demand problem [link] and the average rent has reached an eye-watering £2,095 per calander month – which represents annual growth of 8.2%.
The founder and chief executive of VeriSmart, Jonathan Senior, said about these findings: ‘We are currently seeing a shifting mentality in the way we choose to live our lives and for Generation Rent, in particular, there is no longer that urgency to make it out of the rental sector and secure their own ‘piece’ of bricks and mortar.
‘This was initially driven by consistently buoyant house price growth coupled with stagnant wage growth providing no other option but to rent, however, social rental numbers are falling, Build-to-Rent is growing in prominence, and there has been a number of tenant-friendly changes to the sector. All of these changes are making the rental sector a more attractive place to be and as a result, we are seeing more of us opt for it and stay there for much longer than we may have traditionally.’
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