Guest Blogger Stephanie McMahon of Strutt & Parker on the lettings market

2 December 2015 |

The rise and rise of people living in the private rented sector is a well-rehearsed theme and the statistics speak for themselves. The 2011 Census saw a reversal of the upward trend towards home ownership since 1918, with 36% of households renting compared with 30% in 2001. In London, the English Housing Survey points to 14% of households being in private rental properties in 2003/4 and by 2013/14 that number had doubled to 30%. This is not necessarily a choice-driven outcome, however, because 61% of respondents to the same 2013/14 survey across England expected to be able to buy.

In Housing Futures, our research into trends over the coming decade in the residential market, we asked 2,000 respondents about their housing preferences. There were a significant number of young people interested in an evolving rental model; of those respondents aged 18–29, 45% said that they would consider living in a professionally managed private rental unit. In our view, if the mechanics around planning and covenants for private rental can be aligned to returns, an increase in institutionally-funded investment has the potential to change the dynamic of the prime central London property market. Turning to the high-end second-hand lettings market, we also see changes in demand. Looking at our applicants, they are getting younger, with the majority in their 30s (44%), while couples and sharers are encroaching on the family home market. Ultimately, as more people enter and stay within the rental model, whether by choice or otherwise, London is going to have to respond with multiple types of accommodation to suit changing requirements.