One of the country’s leading buy to let experts has given her reasoning behind the surge in the number of people who rent.
Part of it is down to affordability and the need for flexible living for some, of course, but Kate Faulkner says there’s another reason - improvements in the quality of rental stock.
Faulkner, who runs the Propertychecklists website and her Designs on Property consultancy, makes the claim in a report commissioned by the TDS Charitable Foundation.
The report - ‘Has the private rented sector grown because people want to rent or because they cannot afford to buy?’ - says the private rental sector in England and Wales has more than doubled in size since 2002 and in the recent English Housing Survey it accounted for 20 per cent of households.
“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” explains Faulkner.
She says that if analysts look at a more local level, there are places where affordability has improved but the number of first time buyers continues to decrease, suggesting house prices and demand are not the only forces at play.
“Over the same period that the private rental sector 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” she says.
“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” she concludes.
You can download the full report here.