New research suggests that demand for rented homes is on track to reach six million by 2025.
According to Hamptons International, longer term changes in housing market demographics is fuelling the demand, with the agents forecasting that around 20.5% of households could be renting by 2022. This can be compared to today’s proportion of 19.4%.
Rather than acquiring buy-to-let through purchase, the report highlights that property may enter the rental market in a number of other ways such as inheritance, or where a couple moves in together and decide to hold on to the other property as an investment.
It states: ‘‘We tend to see a larger number of these homes move into the rental market when price growth and activity slow in the sales market. In 2017, we estimate that 80,000 homeowners who tried to sell their home decided to put those sales on hold and rent their property out instead.’
It also drew attention to figures from the Office for National Statistics which show that a minimum of 200,000 properties change ownership through inheritance each year. Whilst many will be sold or inhabited by heirs, UK Finance figures indicate that approximately 16% of landlords acquire their property without buying it – this proportion includes inheritance.
Factors such as this, the report highlights, means that whilst uptake of buy-to-let properties may be subsiding, the sector may not suffer to the same degree.
‘…sources of rental property, which are not dependent on individual landlords purchasing new homes, explain how the sector can expand while landlord purchase numbers are sluggish.’