The majority of tenants in rented properties do not see the sector as a short term option, meaning investors should see constant demand for property, new research has revealed
The study from Knight Frank and YouGov discovered that less than one in four tenants expect to stay in the privately rented sector for under four years.
Of 3,500 renters questioned, 32 per cent revealed they live in their current accommodation as it suits their lifestyle or they have no wish to pay a mortgage.
Nearly a quarter (24 per cent) of respondents said they believe they will never own a home while 15 per cent said they expected to be in rented accommodation for at least the next five years.
“Our survey shows that the majority of renters do not view the private rented sector as just a ‘short term’ move,” said Grainne Gilmore, head of residential research at Knight Frank.
“The dynamics of the housing market, where supply has failed to keep up with demand which in turn has played a role in pushing up house prices, has also put home ownership beyond the reach of many young people, especially in key employment hubs.”
Understanding modern rental trends
For buy to let investors, news that demand in the rental sector remains high is incredibly positive as it will ultimately drive up rents and possible returns.
That, coupled with strong property price growth, provides opportunities for investors to accumulate capital from properties in many parts of the UK.
According to Ms Gilmore, a mobile and increasingly flexible workforce has also aided the expansion of the private rented sector.
The Knight Frank survey reveals that most tenants would be willing to pay up to 40 per cent of their gross income in rent, although this figure increased to 50 per cent in London.
Transport links are important for any property with more than one in three renters revealing they want to be within a six minute walk of the nearest bus stop or train station.
Some 78 per cent would want to be within one kilometre of transport links while tenants would happily pay higher rents for off-site parking.
Younger tenants were also more likely to look for furnished properties; with the study suggesting that investors could charge more in rent should a home be fully equipped.