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Rental Demand Set to Increase during the Next Five Years
A new report from Savills and Rightmove, called Rental Britain, is forecasting that 20% of households in the UK may be in rental properties by 2016. This means another 1.1 million rental homes would need to become available. The funding required to provide this many homes is estimated to be £200 billion, and just one quarter of this is forecast to come from buy to let funding.
At the moment there are around 4.8 million homes in the private rental sector, whereas in 2002 there were just 2.5 million homes. The private rental sector in London already accounts for 27% of all homes, and is larger than the social rental sector which accounts for just 24% of homes. Although the plight of first time buyers is already well known, more and more mature renters are entering into the market, and many of them are aged over forty with families. Rightmove estimates these renters now account for more than half of the UK rental sector, and they also require a different type of property. Many are looking for family homes, and are keen to sign up for longer term lets; something to be welcomed by landlords and letting agents in Nottingham.
Rental values can vary tremendously across the country, and there is definitely a North South divide, with homes in the South East renting for several thousands of pounds more annually compared to similar properties in the North East. There are signs that individual investors are re-entering the market, but recent increases in rental stock have tended to be funded by cash investors.