Private Rental Demand
Demand for private rented homes is predicted to rise by 1.2 million over the next four years as first time buyers need to earn almost £41,000 to afford a home in the UK, a new report claims.
According to a study by KPMG, its economists mapped the average house price for first-time buyers in each of the regions and worked out the required average salary in that area to secure a mortgage with a 10% deposit. In every one, the current median average annual wage for potential homeowners fell short of that figure.
In addition to this, UK house prices are set to rise further as the latest data from the Halifax shows annual house price growth increased, from 8.1% in March to 8.5% in April. This has resulted in house prices rising faster than average earnings despite the return to real earnings growth over the past few months.
These increases will mean more demand for the private rented sector, which is great news for investors. Most developed countries have a large professional rented sector, in which corporate landlords account for an average 20% of the market - rising to around 40% in Germany and a low of around 2% in the UK.
Such landlords bring more professionalism, higher standards of accommodation, increased competition, more choice, a service-driven offering and greater occupier stability to the market.
In the UK, due to rising demand we are finally seeing real commitment from corporate investors, after a long period of absence. A recent survey by Property Week of leading investment houses identified a collective ambition to invest more than £30bn in the UK private rented sector.
