An estimated 595,517 new private rented sector (PRS) households are expected to be seen in the UK within the next five years.
According to recent research carried out by Knight Frank, this will take the total proportion of those renting privately up to 22 per cent up from the 20.6 per cent it is today.
The Multihousing report also suggested approximately £75 billion would be invested in the professionally-managed PRS by 2025.
Over 10,000 people across the UK responded to the survey, which reveals the key trends set to dominate the PRS along with insights from tenants and investors.
Conducted for Knight Frank by YouGov, it reflects the views of 5,000 people living in the private rented sector across the UK.
And for the first time, it also included 5,000 homeowners, allowing the study to draw conclusions on the differences between homeowners and renters.
According to the research, young professionals (aged 25 to 34) no longer make up the largest group living in the PRS, having been overtaken by 35 to 49 year olds (but only very slightly).
This age group is also expected to show the biggest growth in households in the PRS over the coming years, with difficulty in obtaining a mortgage deposit to buy a home remaining a hurdle.
Affordability remains the key priority for 61 per cent of tenants when choosing a property. More than one in 10 tenants said renting allowed them to live in an area they could not otherwise afford.
Location was the second biggest priority for tenants (23 per cent), followed by the size of the property (10 per cent).
Lack of a mortgage deposit remained the key driver for renting, though this ranges from 71 per cent of young families to just 41 per cent of under 25s.
On average, 69 per cent of tenants still expect to be renting in three years’ time, rising to 93 per cent for those aged over 65.
Tenant priorities are more focused on “internal” factors – amenities within an apartment, for example – than “external” factors, such as proximity to local shops.
Knight Frank also spoke with more than 25 of the largest funders and developers of purpose-built PRS and retirement housing to gain insight into how the market is set to develop.
Some 38 per cent of respondents said they wanted to engage in providing “cradle to grave” housing, ie student housing right through to housing with extra care for older people.
