Investment in the UK’s private rented sector (PRS) is expected to nearly double in size over the next six years, as home-ownership rates wane in the wake of affordability pressures.
The level of capital being invested or committed into the UK’s professionally-managed institutional PRS is forecasted to hit £75bn by 2025, marking a sharp rise from its current levels of just under £40bn.
The total proportion of the UK’s housing market which is expected to be privately rented is also set to grow from 20.6 per cent to 22 per cent, with an additional 560,000 households predicted to be living in the private rented sector by 2023, according to Knight Frank.
“Once again, affordability has emerged as a key reason for people choosing to rent in order to live in an area where they would not be able to buy,” said Tim Hyatt, head of residential lettings at Knight Frank.
Hyatt added: “However, average rents in Great Britain rose one per cent in the 12 months to December as more landlords leave the sector and levels of stock decline.”