A new report from global real estate consultancy, Knight Frank, reveals that the proportion of renters in urban areas has increased from 80% to 86% over the last decade, which is mostly accounted for by regional cities outside of London.
The PRS (private rented sector) index shows the increase in activity across the regional markets over the last 12 months, with investors attracted by the achievable yields and the strong occupier demand in regional centres. However, it shows a slight tightening in yields for prime PRS deals in Q2 across the Greater London market as well as in key cities except Bristol and Glasgow which remained the same as Q1.
Meanwhile, the growth of the UK rental sector looks set to continue as demand for rental property is being underpinned by affordability constraints in many parts of the sales market, as well as increased hurdles in the mortgage market. There is also an increasing desire for property with flexible tenure, especially among young professionals, who want to live close to where they work.
Tenants are also choosing to live in private rented accommodation for longer – with the English Housing Survey showing that the proportion of those living in rented accommodation reporting that they have lived in their current home for between two and four years rising to 24%, up from 20% 10 years ago.
Rents are rising across the country, reflecting an increase in wages as well as inflation. They rose by 2.5% in the year to the end of June but there are still wide regional variations in rental growth as shown in the map in figure 2, just as there is a divergence in entry costs into these markets, reflected in the average housing values map in figure 1.
To read the full article, click here
See www.onthemarket.com/newandexclusive. Agents specify exclusivity and are committed to accuracy under terms of use.
