1.1 Million additional rental houses needed by 2016

HAMISH_MCTAVISH

By 2016 demand for private rented accommodation could reach one in five households, a new report from Savills and Rightmove forecasts.

This, they say, will require an additional 1.1million rental homes and £200 billion in investment, but only £50 billion of this is forecast to come from buy to let funding.

The report, Rental Britain, estimates that there are 4.8 million privately rented homes in Britain, up from just 2.5 million in 2002.

In London, private renting already accounts for 27% of all homes (900,000), having overtaken social renting in 2010, which now accounts for just 24% of tenure (783,000 homes).

Private renting is big business. The report estimates that in 2011 Britons paid around £48 billion in rent to private landlords, both individual and institutional, and this is expected to rise to £70 billion within five years.

“Meeting the growing demand for private renting and the changing profile of tenant demand are perhaps the greatest challenges facing both the housing industry and policy makers,” says Lucian Cook, director of Savills residential research.

“The dynamics of supply and demand make a great case for investment in this sector, and rising rents and lower capital values have begun to attract private investors back into the market.

http://www.planetpropertyblog.co.uk/2012/03/28/1-1million-additional-rental-homes-needed-by-2016/

shortchanged_2

The problem is the more people get into BTL the greater the supply therefore the it will eventually put downwards pressure on rents and therefore impact on yields as well. Saturation point and then what?

sabretoothtigger

Then population growth produces greater demand and we repeat

breadlinebetty

There's two certainies in life - death - and needing a home while you're alive :money:

HAMISH_MCTAVISH

There's a third certainty....

We won't be building 1.1 million new homes by 2016, so the cost to rent existing ones will certainly rise.

abaxas

HAMISH_MCTAVISH wrote: »

There's a third certainty....

We won't be building 1.1 million new homes by 2016, so the cost to rent existing ones will certainly rise.

Obviously someone who rents no longer needs to buy, so a relative amount of homes are not needed to 'buy'.

Hamish stop being such a numptie.

HAMISH_MCTAVISH

abaxas wrote: »

Obviously someone who rents no longer needs to buy, so a relative amount of homes are not needed to 'buy'.
.

Most of them can't buy anyway. Mortgage rationing has seen to that, hence the need for another million rental houses.

And transferring another million houses from O/O to rented will ensure supply remains restricted on the sales side, hence keeping up prices.

Graham_Devon

HAMISH_MCTAVISH wrote: »

And transferring another million houses from O/O to rented will ensure supply remains restricted on the sales side, hence keeping up prices.

Nothing is being transferred if you are talking about the need for additional units.

HAMISH_MCTAVISH

Graham_Devon wrote: »

Nothing is being transferred if you are talking about the need for additional units.

We need an additional 1.1 million rental houses by 2016.

We can either build them or transfer them from O/O stock.

We're not going to build them. There's zero chance of that.

Which only leaves one option.... Rents will rise until sufficient numbers of people are tempted to supply from the existing stock in the market.

macaque_2

HAMISH_MCTAVISH wrote: »

There's a third certainty....

We won't be building 1.1 million new homes by 2016, so the cost to rent existing ones will certainly rise.

Hamish

For the past couple of years you have been telling us that immigration would force house prices up but the opposite happened. It is a matter of supply and demand. High house prices have killed demand.

The same applies to renting where the evidence suggests that current levels are already too high and killing demand (if by demand you mean people who can actually keep up with the payments).

HAMISH_MCTAVISH

macaque wrote: »

For the past couple of years you have been telling us that immigration would force house prices up but the opposite happened.

Eh?

House prices remain significantly higher than they were in early 2009 when the market bottomed for the cycle.

And rents soared to new record highs.

It is a matter of supply and demand. High house prices have killed demand.

Yet demand was far higher in 2007, when both house prices and interest rates were also far higher.

So it's mortgage rationing that has temporarily and artificially "killed demand", but that's both politically and economically unsustainable in the long term.

The same applies to renting where the evidence suggests that current levels are already too high and killing demand (if by demand you mean people who can actually keep up with the payments).

The number of people in arrears is falling both month on month and year on year, and is expected to fall further.

In Feb 2011, 11% of tenants paid rent late (even by a day) or were in arrears.

By Feb 2012, this had reduced to 9.3% of tenants who paid rent late (even by a day) or were in arrears.

However, the reduction in arrears occurred even with an above inflation increase in rent over the same period, and despite the changes to housing benefits that started to be implemented a year ago....

How do you explain that Macaque?