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Last edited 18 Nov 2016

Private rented sector PRS

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According to Future of London, an independent not-for-profit network, “The private rented sector in the UK comprises any property that is privately owned and being rented out as housing, usually by an individual landlord, but also by housing organisations and institutional investors. As other tenures decline across the country, it is the fastest growing sector in the country, predicted to surpass social rented housing imminently."

According to the Department for Communities and Local Government (DCLG), private rented housing is a growing part of the housing market. It comprises almost 16.5% of all households, or nearly 3.8 million homes in England. The private rented sector offers a flexible form of tenure and meets a wide range of housing needs. It contributes to greater labour market mobility and is increasingly the tenure of choice for young people.

Many factors support these claims:

  • Households have increasing difficulty in accessing owner- occupation.
  • There is a shortage of social housing provision-where waiting lists are increasing rapidly.
  • Migration has grown and the labour market increasingly requires a flexible work-force.

In addition, there are an increasing number of students willing to enrol in UK universities. Overall there was an increase in 2013 in the number of applicants across the UK of 1.9% when compared to 2012, according to the Independent Commission on Fees (ICF). Recent figures show that overall 'young' demand has increased in 2014 for all countries of the UK; in England to 43 per cent, 54 per cent in Northern Ireland, 36 per cent in Scotland and 37 per cent in Wales. These figures, published by the Universities and Colleges Admissions Service (UCAS), are the highest recorded levels in each country. As a result, more students are interested in higher education, and by implication, there is stronger demand for private rented housing as the universities cannot provide bed spaces for all students.

It is worth noting that the government plays a role in all of these factors. Government policy has a significant impact on the private rented sector, shaping the framework within which the market operates. This can be directly through legislation governing the sector, or indirectly, through wider housing and fiscal policy. Mark Prisk, the former Minister of State for Housing acknowledged “The prospects for the private rented sector are strong in terms of its growth”.

In its recent report on the private rented sector, the House of Commons heard from a number of witnesses that increasing supply was an important way to raise standards and tackle issues of affordability in the sector. “Many of the problems in the Private rented sector are as a result of the significant lack of supply and therefore lack of choice for the consumer”, added Grainger plc, an institutional investor.

It is clear that there is a growing demand for private rented housing leading to growth in this sector. However, much of that growth has been driven by individual landlords with small portfolios, who represent the majority of the sector. There are only a relatively small number of larger landlords - only 1% own more than 10 properties, according to the UK government - and, critically, growth in the rented sector has generally not contributed to the supply of new housing. The government has clearly signalled the importance it attaches to the expansion of the sector; arguably however, it must do more to unleash the sector's true potential.


This article was created by --Damilola February 2014. For the original article, see

File:The UK Private Rented Sector.pdf

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