Private rental sector needs £1.4 trillion by 2035
The sector is set to more than double in size by 2035 according to Landbay, as its currently stock of 4.9 million properties in 2012 should grow to 13.2 million by 2035.
John Goodall, co-founder and chief executive of Landbay, said: “A substantial amount of new investment is needed to provide homes that will be needed over the next two decades, particularly if those homes are to be high quality homes that people want to live in.
“The UK’s housing stock is under significant pressure because not enough new houses are being built, the population is growing and people increasingly prefer to live in smaller, high quality dwellings.
“The scale of the investment needed to ensure the sufficient supply of high quality properties means that multiple solutions are needed – from build-to-let by pension funds, the government’s own ‘Build to Rent’ scheme, further housing debt guarantees from the UK government, through to continued investment by private landlords themselves and an active and vocal private rented sector taskforce.”
Landbay said London and the South East alone will require £455bn of fresh investment.
The UK’s population is expected to grow by 9.6 million to reach 73.3 million in 2037 while life expectancies are projected to reach 84.1 for men and 87.3 for women – putting a greater strain on public services and demands for housing.
Goodall added: “We are gradually moving towards a more European model of housing – where home ownership sits comfortably alongside an equally aspirational population of tenants.
“In countries such as Germany, where more than half the population live in private rented accommodation, this has been entirely consistent with improving living standards.
“So long as the UK can find the necessary investment and the most appropriate reforms, a growing private rental sector has many benefits. Renting offers insurance against house price corrections and greater flexibility and mobility in an evolving jobs market.”