Build to rent corporates are about to make a huge dent in buy to let, according to new research.
Although private landlords hold the keys to around 5 million homes, build to rent is picking up pace and is expected to surge from a £24 billion market in 2017 to be worth £70 billion or more by 2022.
At the same time, the number of homes to rent is likely to rise to 5.8 million – around 24% of all UK homes.
Corporate investors will boom because the government is creating a climate for them to prosper, says the Multihousing 2017 report from property firm Knight Frank.
Funding and planning restrictions are relaxed for build to rent, while private landlords face a harsher tax regime that is likely to see many leave the market.
The report also captures financial and personal information about private tenants.
Affordability is the main factor influencing a choice of home, with 63% of tenants concerned about their budgets as rent accounts for 40% of income for just over half of them.
The other big influences on choosing a home to rent are location (24%) and property size (8%).
When considering where to live, tenants look at transport links (35%), how far away friends and relatives live (8%), nearby green space (4%) and schools (4%).
The statistics also disclosed more than half of tenants live within a 30 minute trip to work – with just 7% living an hour away from the workplace.
Almost a third of tenants rent because they cannot afford to put down a deposit on a home of their own (30%).
But 21% say they rent as they can live in an area they could not afford to buy in, 18% cannot afford a mortgage, while 8% do not want to take on the responsibility of owning a home.
“Younger workers especially are taking advantage of the increased flexibility of renting as a tenure which allows moving between locations without any of the costs associated with buying or selling a property,” says the report.
“Affordability constraints in the sales market are also curtailing some tenants’ plans for house purchase, resulting in a longer stay in the private rented sector as they save for a deposit.”