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By Paul McFadyen, Managing Director, Regis Group
Regis Group PLC is a privately owned investment company specialising in real estate. Over a 50 year
period of growth, Regis Group has become internationally recognised as a specialist investor and
manager in the residential property markets of the United Kingdom, United States and France. Regis
Group is one of the most experienced and significant investors in residential ground rents in the UK and is also a major investor
in the Private Rented Sector, with decades of experience in buying and managing rental properties. The Group is a founding partner
of Invitation Homes, the largest provider of single family rental homes in the US and employs of over 1,300 staff worldwide.
What’s ahead for the private
rented sector in 2015?
T
he expansion of the private
rented sector (PRS) since 2000 is
unprecedented. Soaring house
prices in London and the south east,
stagnant wages and a lack of disposable
income is forcing millions of people to
look at alternatives to homeownership,
a trend that is expected to continue
long in to 2015, but the real shift could
be in attitudes and length of tenures.
A recent JLL report revealed that
London houses prices are set to soar by
almost a third over the next five years,
reinforcing concerns that existing prices
are pushing homeownership out of
reach for many. It comes as no surprise
that many are predicting that more
people will move into private rented
accommodation in the coming year.
Since 2001, ONS recorded that nearly
two million households across the
country have moved in to a privately
rented home and a report by mortgage
lender Kent Reliance indicates that this
will continue, with this figure rising to
five million by 2016.
Historically, private renting has been
a short term measure, but with more
people seeing it as a long term and
viable solution to soaring house prices,
more are now renting for longer. The
biggest group of private tenants are
aged between 25 and 34 but, according
to Savills, the fastest growing group of
private tenants are aged between 35 and
44, a quarter of which are young families.
As a result, tenants are now looking for
longer term tenancy agreements, giving
them greater stability and security,
which is essential for many families. A
recent Savills survey demonstrates this,
with more than 2,000 tenants over the
age of 35 expressing a desire for long
term tenancies.
As young people and families continue
the upward trend of looking to the
private rented sector, landlords need to
respond to the changing needs of the
market. Providing flexible and lengthier
tenancies can offer greater advantages
to both parties and is something that
more landlords may look to introduce
during 2015.
Nonetheless, existing landlords should
avoid complacency; where there is
demand there will be supply. As more
people move to renting, next year could
see a rise in new industry players to
meet the growing demand. In response,
private landlords will have to differentiate
their offering and deliver a better quality
of service and care to their tenants.
Over the course of the year, we could
see a move from proactive landlords to
cater for the long term needs of their
tenants, easing traditional tenancy
restrictions to enable their tenants to
make the property a home.
With the General Election looming in
May, over the first quarter of the year
political parties will be outlining their
manifesto, of which housing policy will
be a key feature. In addition, C