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UK Private Rented Sector Expected to Play a Bigger Role in Meeting Housing Demand
The National Landlords Associations annual conference was held last week in Manchester, and underlined the importance the private rental sector will play in the UK property market during the coming years. The keynote speaker at the conference was Terrie Alafat, director of housing growth and affordable housing at Communities and Local Government.
He explained to attendees that housing is definitely high on the government agenda, especially as demand is continuing to grow, with the private rental sector having increased by 1 million since 2005. One of the things he touched upon was the changing face of the private rental sector in that it is increasingly being seen as a lifestyle choice for people who want the flexibility of being able to move home for work or other reasons. He also pointed out the sector was hugely important due to the pressure being placed on social housing and the difficulties faced by first-time buyers.
David Salusbury, chairman of the NLA was encouraged to hear the government's positive view on the private rental sector and pointed out the need for the UK to be able to offer a diverse variety of housing. Research from CBRE shows the private rental sector now accounts for 70% of new household formation, and some 50% of people receiving housing benefits now live in private rental accommodation. According to the report the private rental sector has outperformed commercial property and equities over the last 10 years, and it pinpointed six UK cities with gross yields of more than 6% which could prove attractive to investors in the future. Interestingly all these cities bar one were in the North.