The private rented sector – and the private landlord in particular – has been much maligned in recent years and is often perceived poorly. Politically and culturally, Britain is a pro homeownership society and this aspiration is cause for celebration. However, in the political discourse, the tenure debate is generally framed in terms of pitting the private rented sector (PRS) against homeownership.
A report, commissioned by the National Residential Landlords Association, however suggests it is wrong to conclude that private renters are trapped in the sector. It finds that fewer than one in ten (six per cent) of private renters want to switch to social rented housing. In addition, whilst three quarters (76 per cent) said they want to buy a home of their own at some point in the future, less than one in five (17 per cent) would have done so already if they could.
Report highlights inclide
- PRS households belong to all income groups, high and low
- A lot of PRS households are young, but a significant number are not
- PRS households are getting older on average
- PRS households are more closely linked to the labour market than those of other tenures
- Those in the PRS generally move often, usually because they want to
Prepared by Chris Walker, a Director at ChamberlainWalker Economics, the report concludes that the sector: “has attributes that make it the tenure of choice for many private renters, and that a high-quality and well-provided PRS is likely to be a good thing both socially and economically.” The survey found that 41 per cent of private renters rated the affordability of their rents as ‘excellent’ or ‘good’ with a further 38 per cent rating it as ‘fair’.
With the Government committed to supporting ‘Generation Rent’ to become ‘Generation Buy’, the report finds that for many private renters, job security is the biggest factor in determining when they choose to buy a home. According to the survey over one in three (37 per cent) of renters were more likely to buy their first home if they had a stable, secure job. This figure rose to a half (50 per cent) among renters aged 18-34.
With a growing number of older people now reliant on the private rented sector, almost half (48 per cent) of renters aged 55 and older said they wanted to stay in the sector. Noting that around 3 million people aged 65 and over want to downsize, the report argues that the PRS can play an important role in enabling this to happen by freeing up under-occupied properties for aspiring homeowners.
According to Government data, more than half (53 per cent) of owner-occupied properties are under-occupied compared with just 15 per cent in the private rented sector.
Writing in the report, Chris Walker concludes:
“For many, the PRS acts as an entry point to the housing market, helping younger people gain their footing and independence when they leave the parental home without the bigger jump and commitment of homeownership. Similarly, the PRS is a mainstay housing option for many younger people whilst at university and for many as they move away from where they grew up to enter the world of work for the first time.”
Ben Beadle, Chief Executive of the National Residential Landlords Association, said:
“Today’s report makes clear the positive and vital role the rental market has to play in the economic and social life of the country.”
The NRLA will be exhibiting at The Property Investor Show on 21/22 April 2023 – www.propertyinvestor.co.uk
Rob Stross Property Investor Media