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Government urged to focus on PRS in face of huge demand

Government urged to focus on PRS in face of huge demand

The British Property Federation wants the UK government to dedicate more initiatives to build properties specifically designed for the private rented sector.

Summary:

  • Similar changes to the national planning policy that have already been pledged to the owner-occupied sector to encourage new builds also need to be introduced for the private rented sector
  • The British Property Federation wants the government to realise the demand for rental property, as well as the demand to own
  • Over 50% of 20 to 39-year-olds will be renting in the private rented sector by 2025

After David Cameron pledged changes to the national planning policy to drive the construction of new starter homes for first-time buyers, the government is now being asked: ‘What about the private rented sector (PRS)?’

Although new build targets in the owner-occupied sector are welcomed, more must be done to meet the sustained demand for rental property, the British Property Federation (BPF) is urging.

The planning changes were announced at the recent Conservative Party Conference in Manchester in order to allow developers to build and sell starter homes in place of affordable housing requirements. Total UK owner occupation rate is projected to fall from a peak of nearly 70% before the global economic crisis to around 60% of households by 2025, with the cost of buying a major obstacle for many would-be home owners to overcome when attempting to get on the property ladder.

However, the BPF wants the government to realise that demand for rental property isn’t just being fuelled by those who must reluctantly rent because they cannot afford to buy. Changing attitudes towards homeownership, particularly among millennials, means that there is also a significant proportion of the population that actively choose to rent.

A combination of factors, from people seeking a more transient lifestyle, those don’t equate home ownership with success, and those that are now settling down and starting families later, has resulted in a forecast of over 50% of 20 to 39-year-olds in Britain renting in the PRS by 2025.

This is why the BPF wants the government to do more to encourage build numbers in the PRS.

“Politicians talk about ‘Generation Rent’ as if it is something to be ashamed of, when this should not be the case”, explains Melanie Leech, Chief Executive of the BPF. “Countries such as Germany and the USA have thriving rental markets, where people happily live in institutionally-backed, purpose-built, high quality rented accommodation for many years.”

“While we are not against owner occupation, and see starter homes as a welcome initiative, we are aware that such a policy is stoking demand for home ownership, rather than focusing on meeting supply.”

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