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Falling home ownership can drive private rented sector improvements
August 2, 2016Article by Ray Withers
Today’s figures on home ownership levels in the UK made for glum reading for those trying to get on the property ladder. The Resolution Foundation has used data from the Office for National Statistics’ Labour Force Survey to examine home ownership rates in key urban areas over the past 10-15 years. The figures come hot on the heels of the English Housing Survey’s revelation that the total number of buyers has fallen by a third in the last decade.
Increased rental demand
Regions like the West Midlands metropolitan area have seen double figure falls in home ownership levels since their peak in the early 2000s. House prices have risen far faster than wages which, combined with tighter lending restrictions, has made it difficult for many to get onto the first rung of the housing ladder.
The situation has resulted in a surge in rental demand and a booming UK buy-to-let sector. This has been great news for investors, with many enjoying healthy profits through building up a buy-to-let property portfolio. Cities like Birmingham and Liverpool have proven particularly strong when it comes to profiting from buy-to-let, thanks to their (relatively) low property prices and excellent yields.
An opportunity for improvement
It’s not just investors who are benefitting from the rise of buy-to-let homes in the UK. The private rented sector is going through significant change as a result of its growing importance. Increasingly, the location of buy-to-let apartments is improving. The latest developments tend to be in sought-after city centre locations and areas receiving significant regeneration investment. They offer tenants the opportunity to live close to the business and leisure opportunities of some of the UK’s most dynamic cities.
The quality of the accommodation available has also risen significantly over the past 10-15 years. Contemporary buy-to-let developments, such as Parker Street Residences in Liverpool, offer spacious, open plan contemporary living, with tasteful interior design, sleek features like integrated appliances and wood floors and plenty of natural light. As developers seek to attract buy-to-let investors in an increasingly competitive market, the homes they offer need to stand out and offer a modern lifestyle that will be sufficient to attract keen interest from tenants for years to come. This pursuit of quality is driving up rental accommodation standards in cities around the UK and reshaping the private rented sector for the benefit of the increasing number of families renting up and down the country.