By Daniel Hunter
The number of privately rented homes in the UK has hit a new peak, according to new official figures.
There are now 3.8 million private rented homes, which is equal to the number in the social rented sector, according to the annual English Housing Survey published by the Department for Communities and Local Government.
The report adds that in 2011-12, around two-thirds (65%) of households were owner occupied. Just one in ten homeowners are under the age of 35, while of those who own their home without a mortgage, nearly 60 per cent are aged 65 and over.
The report underlines the growing demand for professionally managed rented homes, particularly across London and the South East where supply has been particularly tight.
It follows calls by the City of London Corporation to promote greater institutional investment in the private rented sector. In its own new report, the Corporation says institutional investment could be crucial in increasing the supply of new homes to London.
It says that with the population projected to grow by 786,000 by 2021, falling real incomes and rising house prices are creating a real need for large-scale rental investment.
It also calls for the public sector to do more to encourage building, by making sites available for rental developments. It adds that institutional investment would help by raising standards, offering longer lets and mixing market and affordable rent provision.
The first institution-backed developer to unveil plans for a rental only pipeline in the UK is Essential Living, backed with over £200 million of American pension fund cash via M3 Capital Partners.
“This new peak in demand for rental is unsurprising given current trends in demographics and economics. We’re pleased policy-makers at the CLG have recognized this need and are acting decisively to encourage new investment," Nick Cuff, development manager at Essential Living, said.
“We agree with the City of London Corporation that institutionally-backed development would go a long way to improving standards and delivering the kind of quality housing that renters deserve. That’s why we’re working to develop homes specifically to fit the demands of modern renters.
“Ensuring that planning departments recognize the role of the PRS in delivering local housing need and that government departments make their land available in innovative ways is vital if we are to fulfill the opportunities here to make a real difference to UK housing supply.”
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