Private rented sector identified as growth market

Private rented sector identified as growth market

The private rented sector has been strong across the UK for some time now, with investors welcoming strong yields of around five per cent for a number of years. It was originally brought to prominence thanks to the fact it was difficult to be able to afford a home. 

However, a new factor has now come into play that has made buy-to-let an attractive option for investors across the country. Quite simply, more and more people just want to rent rather than buy. 

Lodders Solicitors has identified the private rented market as a potential growth market for investors moving forward, and it said this largely boils down to the changing lifestyles of people under the age of 35 and how this has changed the way they choose the place they live. 

Generation rent has been growing in recent times. Whereas in the past it was the case that people aspired to own a home - it was in fact often seen as being one of life's biggest milestones for British people - it is now more common for them to want to rent. 

Lodders said that more people aged under 35 want to live near where they work, which has seen city and town centres becoming more popular in recent years. Not only this, but they also want the freedom that comes from renting. 

People who rent apartments are able to move at far shorter notice than someone who owns their own home. Career focused individuals see this as a strong advantage, as it allows them to relocate within a matter of weeks, making sure they can take on new jobs anywhere in the country. 

On top of this, there is also the convenience factor. Rented apartments will often come fully furnished, which means they don't need to worry about buying and owning their own white goods and furniture. Again, this also plays into the freedom that they can have from renting a home. 

This new attitude offers investors a real opportunity. By striking when demand is hot, as it is now, they have the chance to get themselves strong yields. The fact that the generation rent sentiment seems to be swinging ever more to renting for life rather than owning also means that there remains a prospect for a long-term income for landlords, with demand unlikely to dwindle at any time. 

Another benefit of the changing attitude could also be that the housing crisis is better addressed. In recent times, the supply and demand imbalance has been concerning, but more people choosing to rent could ease competition and ease fears over fast house price rises. 

"We need to have a shift in attitudes towards renting, and the private rental sector could be the solution to the UK’s housing problems," said Jon Bellfield, managing director of the Barberry Group.