18th April 2018
Following the report by the Resolution Foundation that up to a third of young people face living in privately rented accommodation all of their lives, one property expert explains why the Private Rented Sector (PRS) is having to fill a vital gap within the current housing market.
Paul Staley, director of PRS at property services company SDL Group comments: “It is clear that the UK housing market is undergoing a significant restructuring, with an increase in private rental properties being one of the more obvious outcomes. The reasons for this growth are both supply and demand related.
“In terms of supply, we have a national shortage of appropriate housing which is putting pressure on house prices and, in turn, pricing many out of home ownership. There is also a shortage of affordable housing as, despite continued building of affordable homes, many of those currently living within these properties have little or no incentive to move into other forms of tenure. This makes it difficult for those in real need to gain access.
“In addition, local authorities are understaffed and resourced to deal with demand, resulting in a slow and ponderous planning process which is hampering the completion of further developments.
“From a demand perspective, renting is now a much more acceptable form of tenure than it was in previous generations. This is due to increasing flexibility in the employment sector (the ‘gig economy’) and because of a growing desire in younger generations to have the best and newest model. Many young people want to upgrade easily once fixed terms have ended, as is also shown by the increase in demand for lease hire cars and service contracts on mobile phones.
“Finally, there is growing evidence that the younger generation are less equipped in the skills and motivation necessary to do DIY, which makes them reluctant to take on less desirable stock and upgrade it. This is increasing the demand for new easy-to-maintain properties.
“The Private Rented Sector is taking on the challenge of helping to fill this vital gap within the current housing market. However, with a large number of private landlords and letting agents, this is still predominantly a cottage industry that is ripe for professionalisation.
“Furthermore, the professional organisations and institutional funds that are entering the sector require stock that they trust and understand, such as new builds or refurbished properties with a degree of geographical concentration for ease of management.
“At the SDL Group we assist institutions in building a PRS portfolio which meets these specifications. In particular, we focus on delivering high-quality, family-sized homes that are fully equipped for modern living and located in safe neighbourhoods.
“Our properties are professionally managed and maintained with the added reassurance of security alarms. Our aim is to revolutionise the industry and, ultimately, drive better living standards for our tenants, in particular families.”