The PRS Trends That Will Dominate The Sector Revealed
A new report reveals the trends that will dominate the UK's private rental sector over the next few years.
The report has been compiled by real estate firm Knight Frank and it makes for interesting reading for landlords.
The firm says that demand for privately rented homes will continue to grow and by 2023 there will be 560,000 more households living in the PRS.
They say that the proportion of the UK's housing market that is rented will rise to 22% from 20.6% currently.
They also point out that the number of build-to-rent homes is increasing but more projects need to start.
There are currently nearly 30,000 managed units that have been completed, while the number under construction or in the planning phase is 110,000.
Buy to let landlords are still exiting the market
The report also highlights that buy to let landlords are still exiting the market and they point to mortgage data that reveals that the number of mortgages being taken out by landlords has dropped over the past two years.
Also, the rate of home ownership is still declining and social housing numbers will continue to rise over the next five years. The report also points to investment in the PRS sector rising to £75 billion by 2025.
Other key highlights from the Knight Frank report reveal that young professionals, that's those aged between 25 and 34, are no longer the largest group living in the private rental sector.
Instead, they've been overtaken by those aged between 35 and 49, but only by a slight margin.
The firm's head of residential investment, Nick Pleydell-Bouverie, said: "We see a significant number of private buy to let landlords leaving the market as the BTL tax changes begin to bite.
"Large-scale professional landlords are well-placed to absorb these changes and help satisfy the structural shortfall in housing supply."
He added that it's important that the government now resist further legislation and taxation moves to help the private rental sector 'contribute towards the country's housing challenge'.
Many landlords are being forced to serve Section 21 notices
Meanwhile, it has been revealed that many landlords are being forced to serve Section 21 notices because of delays in serving Section 8 notices.
The findings from Landlord Action found that landlords have no alternative but to serve Section 21 notices. Around 56% of those doing so said their tenant was in arrears.
Other reasons for serving Section 21 notices include tenants requesting that the landlord obtains a possession order, in 10% of cases, and 5% of landlords wanted to refurbish their property and in 4.5% of cases, the landlord wanted to sell it.
The firm's founder, Paul Shamplina, said: "Using Section 8 is not only more time-consuming but tenants can delay the process by counter claiming."