1 in 5 Households will be Privately Rented by .

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By:
Madalena Penny

A recent study published by the Building and Social Housing Foundation (BSHF) has indicated that by 2013, the private rented sector will be larger than the social rented sector, with one in five households in private accommodation by the end of the decade.

Between 2005-2009, the PRS grew by a further one million households, mainly due to the open lending status banks had adopted on buy-to-let investors. As in 2007 there were 3000 BTL lending products for property investors in the private rented sector, that figure stands today at a mere 300 products available on the market, with all requiring large deposits.

Ben Pattison, author of the study ‘Tenure Trends’ attributes the growth of the private rented sector to factors resulting in combinations of political, social and economic drivers.  For the first time in one hundred years the increase of the private rented sector has outstripped the owner-occupier sector, which has fallen in number.

Mr. Pattison believes there is an urgent need to ensure private renting is able to meet the requirements of households who would prefer to live in other tenures, stating that private renting is in danger of becoming the tenure of last resort as an unsatisfactory default option for households who do not have the choice to access social housing or owner occupation.

The recent housing benefit caps however, and the proposed 80% market value rental increase to the social rented sector could possibly see an exodus of migrant tenants from social sector waiting lists, currently at a high of 4.5 million to the private sector.

Services accompanying the PRS, including letting agents are forecast to flourish under the new shifts to accommodate the increase in this sector.

Sim Sekhon, spokesman for national PRS network ‘Legal 4 Landlords’ said:
” We are expecting more tenant and landlord insurance products to be unveiled on the market.  As the PRS eventually levels out, companies involved with the private rented sector will have to adapt their products to the shift in tenure trends.

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