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Around one in five UK households is expected to be living in rental properties by 2022. By 2025, around six million people will be looking for accommodation to rent. A rising number of Brits will be long-term, if not lifelong, tenants in the future, and more needs to be done to ensure the demand is met. Difficulties in raising a mortgage and even a mind shift away from property ownership mean the rental sector will be the first port of call for increasing numbers of UK residents.

As more people living and working in Britain choose to rent rather than buy, there has been an increased need for higher-quality rental properties. There have also been calls for improved management standards to meet the needs of the growing number of tenants. It is no longer the case that those who can afford to will buy property while others will rent. Being a tenant is increasingly becoming a lifestyle choice as the burden of a mortgage loses its appeal. Building to rent is going some way to meet their needs, but it still only accounts for a relatively small proportion of the market.

The research regarding forecasts for the increased numbers of tenants over the next few years by Hamptons International has explored several theories about how rental properties come in to the market. It also looks at the growth in build-to-rents. Often these purpose-built rental properties are funded by institutions and private investors. It is becoming big business with £21 billion being invested in purpose-built rental accommodation in 2017.

This build-to-rent sector is evolving fast, although not quickly enough to meet the growing demand for rental accommodation. About 100,000 build-to-rent properties are in the pipeline. Of these, work has begun on 33,705 properties in the first three months of this year, with a further 63,955 earmarked for work to begin. The number of build-to-rent properties under construction or in the pipeline is up 25% on the same period last year. The build-to-rents are becoming a popular investment at a time when there are huge pressures for rentals, particularly in areas of high demand. It is forecast that more than one in three young people in Britain today will be tenants forever.

Dominic Raab, UK housing minister, said the increase in build-to-rents has to be good news, but they are keen to have more. The National Planning Policy Framework has been revised to further support the build-to-rent sector and to help deliver 300,000 new properties a year by around 2025. For investors seeking ways to diversify their buy-to-let portfolio, build-to-let is a healthy option. Investing in an off-plan new-build that is specially designed for renting means investors will pay a lower entry price, while future yields can be higher than those for traditional buy-to-let properties. These build-to-lets are particularly popular because they offer services that the traditional market cannot. They can have smart-home technology, gyms, swimming pools, co-working hubs and communal spaces built in. These are all appealing extras to all age groups, from Millennials to older people who find themselves living alone.

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