Private rental sector identified as a growth area in UK property markets

Taylor Scott International News

The changing lifestyles of people aged under 35 and a shift in sentiment towards property ownership are set to contribute to a surge in the UK’s private rental sector, it is claimed. It could actually be the solution to the country’s housing problems, according to experts speaking at an annual property seminar hosted by Midlands law firm Lodders Solicitors. ‘We need to have a shift in attitudes towards renting, and the private rental sector could be the solution to the UK’s housing problems,’ said Jon Bellfield, managing director of the Barberry Group, a privately owned property development and investment company. The event’s speakers independently identified the private rental sector as an important and emerging sector, and where the growth is likely to be. Indeed, the sector could account for 30% of the housing stock by 2020, the seminar was told. It heard that the UK is building fewer new residential homes than in 1926, and this short supply is also contributing to the creation of a large rental market, with the difficulty for first time buyers to enter the property market fuelling demand, although the Help to Buy scheme has had a positive impact. People are changing how they want to live and use their town and city centres, and the potential challenge is for developers to build the accommodation these people want, to include quality apartments complete with concierge, secure internet purchase rooms, gym and pool facilities, and easy access to bars, restaurants and shops. Recent research by Savills, for example, has revealed an increase in development activity across the country, and rising demand for land, with values starting to increase. Amongst the under 35s, there’s a growing shift in sentiment around property ownership, which they see as not as important as it was four or five years ago. ‘We expect the private rented sector to grow faster as mortgages are constrained and become less affordable and the annual housing costs for the under 35s is already dominated by private rents,’ said Simon Horan, head of residential development in Birmingham at Savills. Another issue that emerged is the Community Infrastructure Levy (CIL) which local planning authorities need to have in place by April of next year. According to Savills’ planning specialist Michael Davies only a few have it in place. ‘LPAs need to consider the impact of the restrictions on the delivery of infrastructure in their area, and developers and house builders should work with LPAs to identify key pieces of infrastructure needed for the delivery of housing sites, with Section 106 agreements that refer to specific named projects,’ he explained. However, he added that further guidance from Ministers is essential, as failure to do so could have significant impact on the delivery of both infrastructure and housing. Lodders’ chairman George Campion concluded that while the economy seems to be recovery it is not uniform across the country and the biggest challenge will be getting developments over the line. Taylor Scott International

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