UK housing crisis: Build to Rent investment to triple by 2020

 
Jessica Morris
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Prime Minister David Cameron Speaks About Housing At A Barratt Homes Development
Build to Rent was launched in 2012 (Source: Getty)

Investment in Build to Rent will triple to £50bn by 2020, helping it swell from two to five per cent of the private rental sector, and providing minor relief to the UK's growing housing crisis.

It's pertinent as the number of first time buyers and young homeowners are declining, at a time when private rental stock is increasing. Britain needs to build 250,000 new homes a year to plug the ever widening gap between demand and supply.

Tim Hyatt, Head of Lettings at Knight Frank, said: "There is a generational shift in the market both amongst renters and investors which stands a good chance of both stabilising the volatility of the housing market and satisfying some of the structural shortfall in supply,"

"One of the major controls on production of housing is projected rates of sale. The rental market could significantly accelerate this factor through immediate absorption.”

Read more: "Just move out of London" - one mortgage site's solution to Generation Rent's affordability crisis

Knight Frank's Tenant Survey and the Investor showed that young adults who live together in a "flat share" make up the bulk of the private rented sector.

Some 43 per cent of 18-24 years olds share with other adults in a "flat-share", while 34 per cent live in a couple without children and around a quarter live in the private rented sector alone.

Around 28 per cent of tenants across the country said they would be prepared to pay between up to 30 per cent of their gross income on rent, although in London, nearly a third of under-25s are prepared to pay up to 50 per cent of their income on rent.

The Build to Rent scheme was launched in 2012, and its homes are designed and built for the sole purpose for renting. Some say that this creates opportunities for investors, while improving the rental experience by driving up standards.

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