Private property rented sector increasing in the UK, new figures show

Almost one in six residential properties now rent privately, making the private renting sector a growing and vital component of the UK housing market, according to a new report.

The Communities and Local Government’s English Housing Report, shows that the number of households renting privately has risen by one million since 2005/06, from 2.4 million to 3.4 million in 2009/10.

It means that the Private Rented Sector now accounts for 15.6% of all households in England, up from 14.2% in 2008/09 and 11.7% in 2005/06. The figures also show that there has been a decrease in the number of owner occupied households from a peak of 14.8 million in 2005/06 to 14.5 million in 2009/10.

The proportion of households in owner occupation has been in decline since 2003, falling from 70.9% to 67.4% during the period. And the proportion of social renting households is also in decline, falling from 19.5% in 2001 to 17.0% in 2009/10.

Overall, social sector homes were in better condition than private sector homes. In percentage terms, the number of non-decent homes in the private rented sector has fallen from 46.8% in 2006 to 40.8%.

Some 60% of all private rented households are living in decent homes, up from 56% in 2008, whilst the energy efficiency of homes in the private rented sector has improved more over the period than the owner occupied sector
  Couples with no dependent children are the most common type of household in the PRS at 26%, with one person households under 60 being the second largest household type at 23%.

Lone parent households are more common in the private rented sector at 12% of private renters compared with 3% of owner occupiers. While half of all private renters are aged under 35 with half a million, some 15%, aged16 to 24 and 1.2 million, some 35%, aged 25 to 34, the report also shows.

The PRS encompasses a wide range of economic status with 60% of households being in full time employment, 9% in part time work, 7% unemployed, 8% retired and 11% classed as ‘other inactive’.

Some 24% of private renters receive housing benefit compared with 62% of social renters. There are 3.4 million properties in the PRS, 60% of which are located in suburban residential areas compared with just 4% in the city centre.

Nigel Terrington, chief executive of Paragon, the buy to let specialist, says that the new Government data backs up Paragon's long held view that the sector is of growing importance in the UK property market. ‘The CLG's figures highlight the growing number of people relying on the private rented sector to provide their housing needs. The sector's importance to UK housing continues to grow as increasing numbers of people opting to rent privately rather than step on the housing ladder,’ he explained.

‘Demand for privately rented property is at an unprecedented level and far outweighs supply. The resulting rental inflation is leading to people, including the most vulnerable households, being priced out of the sector at a time when the supply of social housing is in decline,’ he said.

‘With Capital Economics estimating that the private rented sector will be home to nearly one in five households by 2015, it is crucial that adequate levels of buy to let mortgage finance are available to enable landlords to expand the number of properties in the PRS,’ he added.