The private rental sector has become of the hottest property niches, according to the ‘Real Estate: A Game Of Two Halves’ report by City analysts Peel Hunt.
The report examines listed property companies, giving a ‘buy’ rating to the UK’s largest landlord Grainger. The report asserts that both UK and North American funds are showing a lot of interest in the private rented sector. Interestingly, it mentions the provision of student accommodation and has upgraded institutional provider Unite to a ‘buy’ rating as it predicts further growth in the student housing sector.
The report also mentions that although the government has targeted private landlords in the past couple of years with increased regulations, more taxation and stamp duty hikes, it is encouraging institutional build-to-rent schemes and landlords. However, these two strands are not necessarily exclusive. The report comes at a time when even more people are likely to be renters rather than property owners. The pace at which property value is increasing far outstrips any wage rises, meaning that many people cannot afford to invest in bricks and mortar any more. Plus, changing lifestyles and aspirations mean some people want more flexibility than property ownership and lifelong mortgages would allow them to have.
A new report shows 48 percent of Europeans believe they will never own a home, according to a survey covering 13 European countries, the USA and Australia. The research from economic analysts ING shows most people who own a home are happy with their situation – 78 percent in Europe, 69 percent in America and 71 percent in Australia. Interestingly 60 percent of tenants in Europe say they would like to own their own home but 48 percent do not think they will ever be able to. ING senior economist Ian Bright says many people want to buy property for security and the freedom to decorate it how they wish. However, many accept that they are unlikely to buy.
In addition, the report shows that a higher percentage of property owners are happy with their situation compared with renters; this suggests that even more people will be frustrated with their future choices of housing.
Landlords could redress the balance by finding ways to allow tenants to see their rental property as a home rather than as somewhere to stay. This could perhaps be achieved by allowing them to decorate (within reason) and offering longer tenancies: two ideas that would find favour with tenants.