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Up to ONE MILLION new rental homes needed in just seven years


A new analysis of the private rental sector suggests that between 800,000 and one million more homes are required to meet growing demand by 2031.

Savills – an estate agency which is a long-time stalwart of Build To Rent – has looked at the private rental sector overall, and not just BTR. It has calculated the propensity of different age groups to rent and applied this to government household projections.

Savills says: “These projections point to an additional 800,000 to 1,000,000 Private Rented Sector households by 2031, under three scenarios. Our base case scenario identified that between 2021 and 2031, the greatest growth in the number of PRS households will be in the 25–34 year old age group, with an additional 370,000 during this period. There will [also] be an additional 229,000 35–44-year-olds.
“Other scenarios involved a ‘Help to Buy 2’ stimulus or an ‘Affordable Home Building Programme’. Our projections indicate that a stimulus package similar in scale and impact to Help to Buy would soften future PRS demand by 20 per cent (c.200,000 households) and an affordable homebuilding programme would soften demand by 11 per cent (c.110,000 households).“While a Help to Buy 2 would deliver more houses, it would come at the cost of fuelling further house price inflation, which has the dual effect of (i) pushing home ownership further out of reach for middle-income earners, whilst (ii) simultaneously putting increased pressure on PRS rents.”The analysis appears in a Savills report backing the development of much more BTR housing in the UK.The agency says some £250 billion of investment is needed to meet the growing rental demand by 2031, while it suggests that demand will be greater for so-called ‘single-family homes’ rather than blocks of rental flats.“We need to adopt a positive response to the housing crisis, across all tenures” says Jacqui Daly, director of residential research at Savills. “Build To Rent can help to deliver many more homes, more quickly, and secure investment that improves the energy efficiency of the private rented sector, while meeting the needs of young, middle-income households.”Savills calculates that £3.5 billion has so far been spent building over 10,000 purpose-built BTR homes; to build another one million would cost £250 billion.

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