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Private Residential Rental Market Report - UK 2018-2022

Published: 13/06/2018 / Number of Pages: 85 / Price: £845.00

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Introduction and Overview

The 2nd edition of the 'Private Residential Rental Market Report - UK 2018-2022' covers the UK Private Residential (PRS) market and the and the associated Build-to-Rent (BTR) sector which have experienced significant market growth in recent years. This edition specifically reviews construction/development opportunities in the PRS sector.

Key issues covered in the report:

  • Structure, size and value of the UK PRS sector. Analysis of PRS stock by tenure, property type and age. Future growth and prospects with forecasts to 2022.
  • The BTR market, construction output estimates, volume estimates, key drivers in the market.
  • Analysis of leading housing associations and local authorities involved in the PRS and BTR sectors.
  • Key drivers - housing availability & supply issues, rising house prices, planning constraints, land availability, etc.
  • Review of the key stakeholders and supply chain companies.

Areas of particular interest:

  • Value and ownership of the UK PRS sector. Smaller private landlords, institutional and large corporate investors.
  • Analysis of the BTR market, scale of operation, growth factors, forecasts to 2022, changing structure of the UK housing industry.
  • The largest volume of BTR is coming through in urban city centres with London, Manchester, Birmingham and Leeds accounting for a large proportion of the sector.
  • Leading developers of BTR units in London.
  • Government support for PRS and BTR - including the Homebuilding Fund and availability of finance.
  • Detailed market data and insight on the private residential rental sector by AMA Research, a leading UK provider of construction market intelligence.

Some of the companies included: 

Barratt Developments, Belgrave Neighbourhood Housing Co-operative (BNHC), Berkeley Homes, Bouygues, Bovis, Caddick Construction, Cossington Housing Co-operative (CHC, Countryside Properties, Crest Nicolson, Gatehouse Bank, Glasgow Housing Association (GHA), Glenbrook Property, Graham Construction, Grainger plc, Keepmoat Homes, Kier Group, Linkcity, M&G Real, Mears Group, MITIE, Mulbury Homes, Peel Land & Property, Pinnacle PSG, Redrow, Rydon, SDL Group, Seddon, Sigma Capital, Telford Homes, Taylor Wimpey, The Guinness Partnership, Tower Hamlets, Uliving, Vesta, Vinci Facilities, Wates Living Space, Willmott Dixon, Winvic Construction.

THE PRIVATE RESIDENTIAL RENTAL MARKET

  • Overview of the PRS and BTR sectors in the UK.
  • Overall size of the PRS. UK rental demand and future growth of the UK PRS. Analysis of PRS stock by type and age.
  • Outline of the UK PRS market by region & key city, including London.
  • Total construction output to 2022 - Construction output in the residential sector - Private Residential Construction; Private Residential RMI.
  • The BTR market size, recent growth history, future prospects with forecasts to 2022.
  • BTR market in terms of volumes and values.

KEY ISSUES AND MARKET DRIVERS

  • Housing supply - UK housebuilding progress and targets.
  • UK housing starts and completions.
  • Housing measures in the 2017 Autumn Budget and 2018 Spring Statement.
  • Planning considerations in the PRS and in the BTR industry.
  • Planning for BTR - changes to the National Planning Policy Framework (NPPF); changes to Permitted Development Rights (PDR); land availability - use of public sector land for PRS schemes; housing zones.
  • House prices and affordability - PRS rental growth vs. house price growth; mortgage availability.
  • Tax changes affecting Buy-to-Let.
  • Government support and funding for PRS and Build-to-Rent Fund/Home Building Fund; Private Rented Sector Housing Guarantee; Affordable Homes Guarantee Programme (AHGP).
  • Other sources of funding, use of offsite construction in the PRS and BTR industry.
  • Ownership of the PRS market - leading investors/developers in the PRS; PRS developer/operator profiles; etc.
  • Housing association PRS and BTR activity/local authorities/councils.

KEY STAKEHOLDERS/SUPPLY CHAIN OPERATORS

  • Review of the key stakeholders and supply chain companies in the industry including contractors, consultants, house-builders and FM companies, activities and opportunities for construction, maintenance and refurbishment work in PRS/BTR schemes.
  • Procurement in the industry - leading house-builders in the PRS. Leading construction contractors and FM companies in the industry.

Report Summary

The number of households in the Private Rented Sector (PRS) has increased rapidly over the past decade, partly reflecting affordability barriers to home-ownership. Indeed, over the past decade (2006-2017) the PRS market has been one of the fastest growing sub-sectors of the property market, growing by over 100% across the regions and by around 90% in London.

Since 2012-13, private rental has been the second largest housing tenure in England behind owner occupation, and overtaking social housing. One of the major drivers of PRS growth has been the lack of housing availability and supply, particularly for first-time buyers, exacerbated by rising house prices in London, the South-east and other major cities. The bulk of this rental demand has been driven by the 25-34 age-group, the so-called 'Generation Rent', with renters in this age group more than doubling since 2003.

Population growth, net migration (increasing number of young adults) and a mobile younger workforce have all contributed to increased demand for homes in the PRS. Growth has also been driven by the combination of rising house prices, stagnant wages and tighter mortgage lending, which have made home ownership increasingly unaffordable, despite historically low interest rates.

This growth looks set to continue in the medium term, with the rental market expected to expand by over 2m by 2030, driven primarily by the 'Generation Rent' (20-45 year olds) demographic and it is this sector of the rental market which sees appeal in lifestyle-branded homes. The Government is aiming to encourage private institutional investors into the PRS, which is likely to lead to an increased demand from both well-established residential investors and new entrants into the market including pension and insurance funds.


List of Contents

Contents Listing

  1. 1. INTRODUCTION 7
  2. 1.1 BACKGROUND 7
  3. 1.2 SOURCES OF INFORMATION 8
  4. 2. SUMMARY AND FUTURE PROSPECTS 9
  5. 2.1 SUMMARY 9
  6. 2.2 DRIVERS AND MARKET PROSPECTS FOR THE PRS & BTR 9
  7. 3. ECONOMIC ENVIRONMENT 14
  8. 3.1 GDP 14
  9. 3.2 INFLATION & INTEREST RATES 15
  10. 3.3 UNEMPLOYMENT 16
  11. 3.4 HOUSEHOLD CONSUMPTION 17
  12. 3.5 HOUSING & CONSTRUCTION 17
  13. 3.6 STERLING 18
  14. 3.7 POPULATION PROFILE 19
  15. 3.8 CONCLUSIONS 19
  16. 4. PRIVATE RESIDENTIAL RENTAL MARKET IN THE UK 20
  17. 4.1 MARKET SCOPE, DEFINITION AND OVERVIEW OF THE PRIVATE RESIDENTIAL RENTED SECTOR (PRS) 20
  18. 4.2 MARKET SIZE 22
  19. 4.2.1 Overall Size of the Residential Rental Market 22
  20. 4.2.2 Future Growth of the UK Private Residential Rental Market 25
  21. 4.2.3 Analysis of PRS Stock by Type and Age 26
  22. 4.3 VALUE AND OWNERSHIP OF THE UK RESIDENTIAL RENTAL MARKET 28
  23. 4.3.1 Overall Value of the UK Residential Rental Market 28
  24. 4.4 BUILDING AND CONSTRUCTION OUTPUT IN THE UK RESIDENTIAL RENTAL MARKET 30
  25. 4.4.1 Total Construction Output to 2022 30
  26. 4.4.2 Construction Output in the Residential Sector 32
  27. 4.4.3 Private Rented Sector Development - Build to Rent 36
  28. 4.5 UK RESIDENTIAL RENTAL MARKET - REGIONAL ANALYSIS 41
  29. 4.5.1 UK Residential Rental Market by Region 41
  30. 4.5.2 London Residential Rental Market 46
  31. 5. PRS - KEY ISSUES AND MARKET DRIVERS 49
  32. 5.1 HOUSING SUPPLY 49
  33. 5.1.1 UK Housebuilding Progress and Targets 49
  34. 5.1.2 UK Housing Starts and Completions 50
  35. 5.1.3 Planning Considerations in the PRS 52
  36. 5.1.4 Land Availability 55
  37. 5.1.5 Housing Zones 56
  38. 5.2 HOUSING AFFORDABILITY 58
  39. 5.2.1 House Prices and Affordability 58
  40. 5.2.2 Mortgage Availability 60
  41. 5.3 FINANCIAL SUPPORT FOR PRS 61
  42. 5.3.1 Government Support and Funding for PRS 61
  43. 5.3.2 Other Sources of Funding in the PRS Market 63
  44. 5.5.3 Use of Offsite Construction in the PRS Market 63
  45. 6. PRS - KEY END USE SECTORS 65
  46. 6.1 MARKET MIX 65
  47. 6.1.1 Ownership of the Private Residential Rental Market 65
  48. 6.2 SMALL SCALE PRS LANDLORDS 65
  49. 6.3 INSTITUTIONAL INVESTORS/DEVELOPERS 66
  50. 6.3.1 Leading Investors/Developers in the PRS 66
  51. 6.4 HOUSING ASSOCIATIONS 70
  52. 6.4.1 Housing Association PRS Activity 71
  53. 7. PRS - KEY STAKEHOLDERS/SUPPLY CHAIN OPERATORS 77
  54. 7.1 OVERVIEW 77
  55. 7.1.1 Procurement in the PRS 77
  56. 7.2 HOUSEBUILDERS 78
  57. 7.3 CONTRACTORS AND CONSULTANTS 80
  58. 7.4 FM COMPANIES 82

Tables & Charts

  1. CHART 1: GROWTH OF THE PRS SECTOR 2017-18 TO 2029-30 (NO. DWELLINGS) (M) 9
  2. CHART 2: CONTRACTOR OUTPUT VALUE OF THE BUILD TO RENT MARKET 2013-2022 BY VALUE (£BN AT CURRENT PRICES) 12
  3. TABLE 3: GDP DATA - 2015-2018 - KEY CONSTITUENT ELEMENTS 14
  4. CHART 4: INTEREST RATES AND INFLATION (CPI) FROM 2000-2022 16
  5. CHART 5: PDI & SAVINGS RATIO AT CURRENT PRICES 2000-2022 17
  6. TABLE 6: EXCHANGE RATE FLUCTUATIONS 2014-2020 - STERLING TO THE DOLLAR, AND THE EURO, SPOT RATES 18
  7. TABLE 7: DWELLING STOCK IN ENGLAND BY TENURE: 2007-08 TO 2016-17 ('000 DWELLINGS) 23
  8. TABLE 8: PRS DWELLING STOCK IN ENGLAND: 2015-16 TO 2029-30 ('000 DWELLINGS & % OF ALL STOCK) 25
  9. CHART 9: UK PRIVATE RENTED SECTOR BY PROPERTY TYPE (%) 2016-17 26
  10. CHART 10: AGE OF PRS STOCK IN ENGLAND (%) 2016-17 27
  11. CHART 11: % OF NON-DECENT HOMES BY TENURE 2006-07 TO 2016-17 28
  12. CHART 12: TOTAL VALUE OF ESTABLISHED PRS STOCK IN THE UK: 2008-2017 (£BN) 29
  13. CHART 13: VALUE OF PRS STOCK IN THE UK BY REGION 2016-17 (%) 30
  14. CHART 14: VALUE OF TOTAL CONSTRUCTION OUTPUT 2013-2022 BY VALUE (£BN AT CURRENT PRICES) 31
  15. TABLE 15: VALUE OF TOTAL RESIDENTIAL CONSTRUCTION OUTPUT 2013-2022 (PUBLIC AND PRIVATE) (NEW BUILD AND RMI) BY VALUE (£BN AT CURRENT PRICES) 32
  16. TABLE 16: PRIVATE RESIDENTIAL CONSTRUCTION OUTPUT 2013-2022 (NEW BUILD AND RMI) BY VALUE (£BN AT CURRENT PRICES) 34
  17. CHART 17: CONTRACTOR OUTPUT VALUE OF THE BUILD TO RENT MARKET 2013-2022 BY VALUE (£BN AT CURRENT PRICES) 36
  18. CHART 18: VOLUME SHARE BTR FROM ALL NEW BUILD RESIDENTIAL 38
  19. CHART 19: TYPES OF ORGANISATION COMPLETING PRS SCHEMES BY 2017 39
  20. TABLE 20: ENGLAND - REGIONAL CONCENTRATION OF PRS STOCK 41
  21. TABLE 21: TOP REGIONAL PRS MARKETS (POPULATION/HOUSING TENURE/HOUSE PRICES AND PRS RENTS) 43
  22. TABLE 22: LONDON BOROUGHS - PRS DATA (POPULATION/HOUSING TENURE/HOUSE PRICES AND PRS RENTS) 47
  23. CHART 23: NEW HOUSING STARTS IN THE UK 2013-2022 BY VOLUME OF DWELLINGS 50
  24. CHART 24: NEW HOUSING COMPLETIONS IN THE UK 2013-2022 BY VOLUME OF DWELLINGS 51
  25. TABLE 25: HOUSING ZONES IN THE UK BY REGION - EST. NO. OF HOMES AND FUNDING (£M) 57
  26. TABLE 26: LONDON HOUSING ZONES BY BOROUGH - EST. NO. OF HOMES BY ZONE 58
  27. TABLE 27: AFFORDABILITY FACTORS UK - AVERAGE DWELLING PRICE AND EARNINGS RATIO: 2007-2017 YEAR TO DECEMBER 2017 59
  28. CHART 28: RENTAL GROWTH VS. HOUSE PRICE GROWTH (% CHANGE) 2006 - 2017 60
  29. CHART 29: VOLUME AND VALUE OF BUY-TO-LET MORTGAGE ADVANCES 2009 - 2018 (£BN) 61
  30. CHART 30: ESTIMATED OWNERSHIP OF PRS STOCK IN THE UK TYPE OF OWNER: 2016-17 (£BN) AND (%) 65
  31. TABLE 31: LEADING OWNERS OF PRS STOCK: UNITS COMPLETED AND PLANNED 67
  32. CHART 32: FORWARD PLANS OF PRS UNITS BY KEY OPERATOR 70
  33. TABLE 33: LEADING HOUSING ASSOCIATIONS IN THE PRS/BUILD-TO-RENT SECTOR 71
  34. TABLE 34: LONDON BOROUGHS - COUNCIL-OWNED DEVELOPMENT COMPANIES DELIVERING PRS 76

The 'Private Residential Rental Market Report - UK 2018-2022' costs £845+VAT (if applicable) for a PDF version.

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