New research by Hamptons International proposes that the private rented sector will continue to grow despite recent policy changes.
Demand for rented property will be a key driver of the sector’s performance, due to long-term demographic changes and a consistent decline in homeownership levels as house price increases outpace income growth.
As a result, the estate agency forecasts that 20.5% of households will be renting in Great Britain by 2022, up from 19.4% in 2018, and that there will be six million households renting privately by 2025.
The research goes on to explore the different ways in which properties can appear on the market. For example, it estimates that around 80,000 homeowners decided to let their home out as they struggled to sell.
However, Hamptons predicts that the build-to-rent sector will become a larger part of the market, as it found the development pipeline will deliver more than 100,000 units, with more expected to come in the future.
Cash owners outnumber those buying with a mortgage, the research also highlights, noting that cash buyers have increased for 23 out of the last 25 years.
In 2017 alone, 65% of investors purchased using cash, equating to billion in property.
“The mass of cash in the market alongside increasing institutional interest is acting as an insulation to changes in policy. Creating a firm foundation on which the sector can continue to grow, particularly as the demand for rented homes will continue to rise,” the research concludes.