New research finds up to a third of young people in Britain will now rent for their entire lives, underlining the need for more investment in key UK city markets.
- Volume of people using the UK’s private rental sector revealed by think tank report, with over a third of young people now set to rent their entire lives
- Over 40% of people in Britain born between 1980 and 1996 will be renting their homes by the age of 30
- Huge pressures on rental markets in key cities where tenant demand is highest
Is Britain becoming a nation of renters?
A new report from Resolution Foundation has revealed the growing importance of the private rental sector in the UK, particularly among the country’s younger generation.
Up to one third of “millennials”, those born between 1980 and 1996, will now rent their entire lives. Over 40% will still be renting by the age of 30, twice as many as “Generation X” (those born between 1965 and 1980).
It’s a trend that’s not only limited to the UK’s young. Over the last 15 years, the number of families living in the UK’s private rental sector has also tripled; 1.8 million families now rent their homes.
There are often two narratives to explain Britain’s rising rental demand. On the one hand, there are of course the many people who wish to buy a home, but rely on renting as a means of saving the money to make it onto the property ladder. But renting is also becoming a preferred choice for many young workers, who enjoy the flexibility that renting provides to pursue a more transient lifestyle.
Nevertheless, both scenarios are placing serious strains on the country’s rental market, particularly in those cities where the demand for rental accommodation is the most profound, with an increased focus on delivering greater numbers of quality properties.
In Manchester, for example, the population is growing at 15 times the rate new homes are being built at. The city also has one of the youngest populations in the country, with a quarter of Manchester’s entire population aged 20-29, a key demographic for the city’s rental sector.
And, with a 58% graduate retention rate of Manchester’s universities creating 20,000 new workers in the city annually, the demand continues to rise each year.
By 2022, residential housing in Manchester will meet just 25% of annual demand. As a result, rental rates are likely to maintain their upward trajectory. JLL forecasts that rent growth in Manchester will grow 40% faster than the UK average by 2022.