Group Operations Director, Terry Mason, likens the experience to swimming against the current.
Terry explains: “The biggest problem with the UK rental sector is lack of housing. It’s been the same problem since the end of World War II. Our population has increased by nearly 35% since then, meaning the problem becomes harder to address every year. Without building enough homes to keep up with population growth, any policies aimed at making renting easier and cheaper will be like swimming against the current.”
The UK’s population has grown from around 50 million people in 1950 to an estimated 67 million today. At the same time, shifting family unit shapes have created even more demand for homes. Yet the number of households living in the private rented sector is falling. In 2016-17, the sector housed 20% of all households. By 2019-20, that figure had dropped to 19%.
Terry says: “The private rented sector is an essential part of the UK’s housing makeup, but for the last few years the government has made it harder and less profitable to be a landlord or letting agent. Though intended to make renting a home easier and cheaper for tenants, this has simply led to there being fewer landlords, letting agents and rental homes available. The result? Higher rents.”
The basic economics of supply and demand means that the only viable solution to solving the UK’s shortage of rental homes – and subsequent increase in rents – is to build at a far greater pace than at present. Zoopla’s latest rental index shows an increase of 4.6% in the cost of renting year-on-year on average to the end of September. Take London out of the data and that increase jumps to 6%. Such rapid rises simply aren’t sustainable.
James Maguire, Head of Sales and Business Development, Housing Hand, comments: “There’s a real opportunity here to embrace Modern Methods of Construction and not only increase the number of homes being built in the UK but to do so in a sustainable way. This is the only real way to support the healthy growth of the private rented sector. Building more homes is the only way to solve the long-term problem of rents rising so rapidly – alongside a continued focus on commercial to residential development.”
The relaxation of planning laws around commercial premises is a step in the right direction, according to the Housing Hand team. The ability to turn disused commercial premises into residential accommodation has facilitated accelerated growth in the private rental sector.
A speeding up of available Build to Rent and co-living businesses are also creating innovative rental solutions at a time when those looking to rent expect a greater experience in their living space. Onsite gyms, pools, cafes, cinemas and entertainment/social spaces have created vibrant communities while helping to solve the significant lack of rental accommodation that the UK is facing. Housing Hand is supporting such businesses to become even more flexible in removing barriers to rent.
