A new analysis of the private rental sector suggests that between 800,000 and one million more homes are required to meet growing demand by 2031.
Savills - an estate agency which is a long-time stalwart of Build To Rent - has looked at the private rental sector overall, and not just BTR. It has calculated the propensity of different age groups to rent and applied this to government household projections.
Savills says: “These projections point to an additional 800,000 to 1,000,000 Private Rented Sector households by 2031, under three scenarios. Our base case scenario identified that between 2021 and 2031, the greatest growth in the number of PRS households will be in the 25–34 year old age group, with an additional 370,000 during this period. There will [also] be an additional 229,000 35–44-year-olds.
“Other scenarios involved a ‘Help to Buy 2’ stimulus or an ‘Affordable Home Building Programme’. Our projections indicate that a stimulus package similar in scale and impact to Help to Buy would soften future PRS demand by 20 per cent (c.200,000 households) and an affordable homebuilding programme would soften demand by 11 per cent (c.110,000 households).
“While a Help to Buy 2 would deliver more houses, it would come at the cost of fuelling further house price inflation, which has the dual effect of (i) pushing home ownership further out of reach for middle-income earners, whilst (ii) simultaneously putting increased pressure on PRS rents.”
The analysis appears in a Savills report backing the development of much more BTR housing in the UK.
The agency says some £250 billion of investment is needed to meet the growing rental demand by 2031, while it suggests that demand will be greater for so-called ‘single-family homes’ rather than blocks of rental flats.
“We need to adopt a positive response to the housing crisis, across all tenures” says Jacqui Daly, director of residential research at Savills. “Build To Rent can help to deliver many more homes, more quickly, and secure investment that improves the energy efficiency of the private rented sector, while meeting the needs of young, middle-income households.”
Savills calculates that £3.5 billion has so far been spent building over 10,000 purpose-built BTR homes; to build another one million would cost £250 billion.
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How many will be affordable and how many luxury ?
Seems developers always follow the money so I don’t hold out much hope for the former , unfortunately
So no service infrastructure , I suppose that’s where the robots come in ?
We all know that the great unwashed will not be welcomed at the BTR door 🤐 we are at the vanguard of a new Dickensian period.
There’s a shortage of Private Rented Accommodation created by driving out hundreds of thousands of Private landlords reducing Stock.
So if they hadn’t invented spurious endless Regulations, extortionate licensing Schemes. fees, penalties, S 24, RRB, 2015 De-Regulation’s Act, Right 2 Rent, How 2 Rent, Removing Section 21, Criminalisation Bill etc, There wouldn’t be a shortage at all instead of being hampered in recent years now all those landlords would have been increasing Stock instead of being forced to reduce it, now you tell me there’s a Stock Shortage ?. The Big Boy’s are taking over the PRS with Build 2 Rent and Government help, no Section 24 for them or Licensing Schemes.
Where have all those New Big Boys been while we struggled for years to create this Business nowhere to be seen but now its ripe for the big take over.
"The Big Boy’s are taking over the PRS" .....
Yes, that's 100% the aim... and with it will come thrown up sub-standard housing, high rise ghettos with no community (the very high rise blocks that were pulled down in the 90's), zero service and personal attention to tenants issues.
Mark my words.....tenants will never have it as good again as they have over the last 20 years.
There will be considerably more than a million more homes needed because many, perhaps the majority of, private landlords will not be prepared to let their properties indefinitely.
That's me. If you commit 'indefinetely' it will be all but impossible to ever get tenants out.
That sums the situation up Nick!
I wonder how many units have left the PRS in the last 5 years? More needed, less available = higher rent.
The amounts talked about are in the Monopoly realm 🎩, the current net migration figures will hoover up all those.
We need 1M more rental properties - but successive governments left and right continue to sell 3M + right to buy social housing (and counting) while enjoying the profits. Thirty-odd years ago, I undertook RTB surveys for Westminster City Council - I could see no logic to their policy then and still don't. The only benefit went to the tenants who got rich selling them later and the government pocketing £47bn.
Added to this, 1M required homes is probably a significant underestimate as 750,000+ persons are entering the country annually. So conservatively we can say we will need 10M homes in fifteen years time. Of course this is compounded by the fact that no government will ever spend £250bn on housing, or £2,500bn if 10M home are needed. One can see why governments want to divide and rule the housing industry and pass the blame when the figures are opened up for all to see. In short the government is going to do nothing itself to alleviate their misdoings apart from impart blame on others and attempt to provide councils with stringent laws to take in money with fees and fines on the PRS
in the hope their own hapless policies are not seen for what they are.
Councils' attempts at building homes have generally failed due more to their self-inflated notion of their own business acumen than anything else.
So rather than letting the media (BBC et al) eat up landlords daily with negative press and instigating blame factor regulations, it would be far wiser to bring the PRS on board and, indeed, promote PRS as one answer to a larger multifaceted problem that requires substantial government investment over the next decade.
This idea that Councils should be financially self-sufficient will never work as it operates primarily as a service, not a company, with the goal of profiteering.
I believe that in the early 80’s the PRS accounted for less than 5% of U.K. housing. By 2020 the PRS accounted for 20% of housing. The BTL sector now houses circa 11 million. What’s more this housing miracle was achieved largely with private finance.
Successive Gov’s have failed to provide sufficient housing because basically they couldn’t afford it without crippling the hard pressed tax payer. Nothing has changed except that an inept sacrificial scapegoating policy to kill off the PRS is set to deliver a catastrophic housing meltdown.
The truth will emerge within circa 5 yrs.
A great many of the Council properties sold in the 1980s under the RTB were in a very poor state of repair. The work needed to bring them up to a decent standard often cost more than the discount. Mine had dry rot throughout the entire property, no central heating, life expired wiring, rotten single glazed sash windows, no insulation. Let's not pretend these were pristine, desirable homes with the purchaser trousering a large profit. They were a maintenance nightmare the Councils were glad to offload.
A million will not cut in 7 years. Doubling of that figure may go towards being correct. There was a time when they were talking about 300 units per year. 7 years need more like 2m homes.
Renters are increasing. Students and young people leaving homes, people coming to work from abroad, increasing asylum seekers. Need to consider the whole demographics. They have not considered LL's leaving within 7 years. A fewer LL's will increase stock, the younger generation. Big boys will buy in the cities, especially London, Manchester, Leeds, Liverpool etc. Then we will see government will actively educate the tenants. The big boys will not be so softy to their tenants when they do not pay.
Which former conservative ministers will be sat on the boards of these BTR companies in the near future??
George Osbourne :)
Maybe Beadle's About too one day.
Guarantee Greasy Gove will be there.😠
A very good point 🤔 the list could be long and winding 🪱the snake Gove is a must 😂
Sold a property in June. Notice being given to another next week then gradually selling them all off to “owners” not landlords. They’ve created this position and I’m not going to help them sort it! Their arrogance knows no bounds.
Will all these additional houses that are needed have space to park their dinghies?
I think more incentives are needed to encourage the standard family unit of two parents looking after their children, supporting their children until they are ready to leave the nest. Then the children helping their parents in their old age. There are too many single parents and single men all living alone using up more housing resources.
And of course these single parents are scrounging milking the benefits system, cut their free money
Agree 🫣 Time ⏳ Bomb 💣 anybody 🆘
Society is broken. The liberals have done it. There's no right wing back bone anymore. All too frightened to say the wrong thing and upset people.
Ive got no idea how they arrive at these figures but they are a million miles out, we have been under providing on homes for our net migration (thats another story) for about 15 years @ 100,000 pa in great years and 500,000 pa in poor years like the last 2. We have nearly 2 million households on the social housing waiting list TODAY, let alone in 2031, so thats 2 million needed immediately for a start. Plus the homeless, house shares, students, adult kids at home, plus all those keeping below the radar who havent contacted councils, you can add another couple of million easily. Vibha says above 2m, I reckon its closer to 4 and not in 7 years time.
Tricia. I wonder it’s going really well. I have one £6200. arrears on vacation, me left to clear the loads they left behind + full garage @ Fore Court, £4700. Spent on Energy improvements. £860. C/tax on vacant property, £1150.00 Application licensees-new fee and wait forever, utility bills & standing charges continue, months of lost rent and will remain idle while or if the Council decides to grant a license, but cannot let without a license so the Council is deliberately causing homeless by inventing problems and not capable of doing their own job, yes it’s going really well.
Completing on a sale on 5th Feb to squeeze myself back closer to the £50k tax band limit. That was a flat which had housed a tenant paying max £375pcm. Unfortunately he died but that provided the clean break for me. That was 10% of my stock which, if repeated by others which I think is happening, means around 1 million less homes available fairly quickly. Ultimately after a shakedown it's the bottom cadre of tenants who will suffer, and where will they go? Not to a £750 BTR methinks. Homelessness; we ain't seen nothing yet!
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