Private Residential Rental Market Report - UK 2018-2022 Published: 13/06/2018 / Number of Pages: 85 / Price: 845.00 Introduction and Overview The 2nd edition of the 'Private Residential Rental Market Report - UK 2018-2022' covers the UK Private Residential (PRS) market and the and the associated Build-to-Rent (BTR) sector which have experienced significant market growth in recent years. This edition specifically reviews construction/development opportunities in the PRS sector. Key issues covered in the report: Structure, size and value of the UK PRS sector. Analysis of PRS stock by tenure, property type and age. Future growth and prospects with forecasts to 2022. The BTR market, construction output estimates, volume estimates, key drivers in the market. Analysis of leading housing associations and local authorities involved in the PRS and BTR sectors. Key drivers - housing availability & supply issues, rising house prices, planning constraints, land availability, etc. Review of the key stakeholders and supply chain companies. Areas of particular interest: Value and ownership of the UK PRS sector. Smaller private landlords, institutional and large corporate investors. Analysis of the BTR market, scale of operation, growth factors, forecasts to 2022, changing structure of the UK housing industry. The largest volume of BTR is coming through in urban city centres with London, Manchester, Birmingham and Leeds accounting for a large proportion of the sector. Leading developers of BTR units in London. Government support for PRS and BTR - including the Homebuilding Fund and availability of finance. Detailed market data and insight on the private residential rental sector by AMA Research, a leading UK provider of construction market intelligence. Some of the companies included: Barratt Developments, Belgrave Neighbourhood Housing Co-operative (BNHC), Berkeley Homes, Bouygues, Bovis, Caddick
Construction, Cossington Housing Co-operative (CHC, Countryside Properties, Crest Nicolson, Gatehouse Bank, Glasgow Housing Association (GHA), Glenbrook Property, Graham Construction, Grainger plc, Keepmoat Homes, Kier Group, Linkcity, M&G Real, Mears Group, MITIE, Mulbury Homes, Peel Land & Property, Pinnacle PSG, Redrow, Rydon, SDL Group, Seddon, Sigma Capital, Telford Homes, Taylor Wimpey, The Guinness Partnership, Tower Hamlets, Uliving, Vesta, Vinci Facilities, Wates Living Space, Willmott Dixon, Winvic Construction. THE PRIVATE RESIDENTIAL RENTAL MARKET Overview of the PRS and BTR sectors in the UK. Overall size of the PRS. UK rental demand and future growth of the UK PRS. Analysis of PRS stock by type and age. Outline of the UK PRS market by region & key city, including London. Total construction output to 2022 - Construction output in the residential sector - Private Residential Construction; Private Residential RMI. The BTR market size, recent growth history, future prospects with forecasts to 2022. BTR market in terms of volumes and values. KEY ISSUES AND MARKET DRIVERS Housing supply - UK housebuilding progress and targets. UK housing starts and completions. Housing measures in the 2017 Autumn Budget and 2018 Spring Statement. Planning considerations in the PRS and in the BTR industry. Planning for BTR - changes to the National Planning Policy Framework (NPPF); changes to Permitted Development Rights (PDR); land availability - use of public sector land for PRS schemes; housing zones. House prices and affordability - PRS rental growth vs. house price growth; mortgage availability. Tax changes affecting Buy-to-Let. Government support and funding for PRS and Build-to-Rent Fund/Home Building Fund; Private Rented Sector Housing Guarantee; Affordable Homes Guarantee Programme (AHGP). Other sources of funding, use of offsite construction in the PRS and BTR industry. Ownership of the PRS market - leading investors/developers in the PRS; PRS developer/operator profiles; etc. Housing association PRS and BTR activity/local authorities/councils. KEY STAKEHOLDERS/SUPPLY CHAIN OPERATORS Review of the key stakeholders and supply chain companies in the industry including contractors, consultants, housebuilders and FM companies, activities and opportunities for construction, maintenance and refurbishment work in PRS/BTR schemes. Procurement in the industry - leading house-builders in the PRS. Leading construction contractors and FM companies in the industry. Report Summary
The number of households in the Private Rented Sector (PRS) has increased rapidly over the past decade, partly reflecting affordability barriers to home-ownership. Indeed, over the past decade (2006-2017) the PRS market has been one of the fastest growing sub-sectors of the property market, growing by over 100% across the regions and by around 90% in London. Since 2012-13, private rental has been the second largest housing tenure in England behind owner occupation, and overtaking social housing. One of the major drivers of PRS growth has been the lack of housing availability and supply, particularly for first-time buyers, exacerbated by rising house prices in London, the South-east and other major cities. The bulk of this rental demand has been driven by the 25-34 age-group, the so-called 'Generation Rent', with renters in this age group more than doubling since 2003. Population growth, net migration (increasing number of young adults) and a mobile younger workforce have all contributed to increased demand for homes in the PRS. Growth has also been driven by the combination of rising house prices, stagnant wages and tighter mortgage lending, which have made home ownership increasingly unaffordable, despite historically low interest rates. This growth looks set to continue in the medium term, with the rental market expected to expand by over 2m by 2030, driven primarily by the 'Generation Rent' (20-45 year olds) demographic and it is this sector of the rental market which sees appeal in lifestyle-branded homes. The Government is aiming to encourage private institutional investors into the PRS, which is likely to lead to an increased demand from both well-established residential investors and new entrants into the market including pension and insurance funds. List of Contents Contents Listing 1. INTRODUCTION 7 1.1 BACKGROUND 7 1.2 SOURCES OF INFORMATION 8 2. SUMMARY AND FUTURE PROSPECTS 9 2.1 SUMMARY 9 2.2 DRIVERS AND MARKET PROSPECTS FOR THE PRS & BTR 9 3. ECONOMIC ENVIRONMENT 14 3.1 GDP 14 3.2 INFLATION & INTEREST RATES 15 3.3 UNEMPLOYMENT 16 3.4 HOUSEHOLD CONSUMPTION 17 3.5 HOUSING & CONSTRUCTION 17 3.6 STERLING 18 3.7 POPULATION PROFILE 19
3.8 CONCLUSIONS 19 4. PRIVATE RESIDENTIAL RENTAL MARKET IN THE UK 20 4.1 MARKET SCOPE, DEFINITION AND OVERVIEW OF THE PRIVATE RESIDENTIAL RENTED SECTOR (PRS) 20 4.2 MARKET SIZE 22 4.2.1 Overall Size of the Residential Rental Market 22 4.2.2 Future Growth of the UK Private Residential Rental Market 25 4.2.3 Analysis of PRS Stock by Type and Age 26 4.3 VALUE AND OWNERSHIP OF THE UK RESIDENTIAL RENTAL MARKET 28 4.3.1 Overall Value of the UK Residential Rental Market 28 4.4 BUILDING AND CONSTRUCTION OUTPUT IN THE UK RESIDENTIAL RENTAL MARKET 30 4.4.1 Total Construction Output to 2022 30 4.4.2 Construction Output in the Residential Sector 32 4.4.3 Private Rented Sector Development - Build to Rent 36 4.5 UK RESIDENTIAL RENTAL MARKET - REGIONAL ANALYSIS 41 4.5.1 UK Residential Rental Market by Region 41 4.5.2 London Residential Rental Market 46 5. PRS - KEY ISSUES AND MARKET DRIVERS 49 5.1 HOUSING SUPPLY 49 5.1.1 UK Housebuilding Progress and Targets 49 5.1.2 UK Housing Starts and Completions 50 5.1.3 Planning Considerations in the PRS 52 5.1.4 Land Availability 55 5.1.5 Housing Zones 56 5.2 HOUSING AFFORDABILITY 58 5.2.1 House Prices and Affordability 58 5.2.2 Mortgage Availability 60
5.3 FINANCIAL SUPPORT FOR PRS 61 5.3.1 Government Support and Funding for PRS 61 5.3.2 Other Sources of Funding in the PRS Market 63 5.5.3 Use of Offsite Construction in the PRS Market 63 6. PRS - KEY END USE SECTORS 65 6.1 MARKET MIX 65 6.1.1 Ownership of the Private Residential Rental Market 65 6.2 SMALL SCALE PRS LANDLORDS 65 6.3 INSTITUTIONAL INVESTORS/DEVELOPERS 66 6.3.1 Leading Investors/Developers in the PRS 66 6.4 HOUSING ASSOCIATIONS 70 6.4.1 Housing Association PRS Activity 71 7. PRS - KEY STAKEHOLDERS/SUPPLY CHAIN OPERATORS 77 7.1 OVERVIEW 77 7.1.1 Procurement in the PRS 77 7.2 HOUSEBUILDERS 78 7.3 CONTRACTORS AND CONSULTANTS 80 7.4 FM COMPANIES 82 Tables & Charts CHART 1: GROWTH OF THE PRS SECTOR 2017-18 TO 2029-30 (NO. DWELLINGS) (M) 9 CHART 2: CONTRACTOR OUTPUT VALUE OF THE BUILD TO RENT MARKET 2013-2022 BY VALUE ( BN AT CURRENT PRICES) 12 TABLE 3: GDP DATA - 2015-2018 - KEY CONSTITUENT ELEMENTS 14 CHART 4: INTEREST RATES AND INFLATION (CPI) FROM 2000-2022 16 CHART 5: PDI & SAVINGS RATIO AT CURRENT PRICES 2000-2022 17 TABLE 6: EXCHANGE RATE FLUCTUATIONS 2014-2020 - STERLING TO THE DOLLAR, AND THE EURO, SPOT RATES 18
TABLE 7: DWELLING STOCK IN ENGLAND BY TENURE: 2007-08 TO 2016-17 ('000 DWELLINGS) 23 TABLE 8: PRS DWELLING STOCK IN ENGLAND: 2015-16 TO 2029-30 ('000 DWELLINGS & % OF ALL STOCK) 25 CHART 9: UK PRIVATE RENTED SECTOR BY PROPERTY TYPE (%) 2016-17 26 CHART 10: AGE OF PRS STOCK IN ENGLAND (%) 2016-17 27 CHART 11: % OF NON-DECENT HOMES BY TENURE 2006-07 TO 2016-17 28 CHART 12: TOTAL VALUE OF ESTABLISHED PRS STOCK IN THE UK: 2008-2017 ( BN) 29 CHART 13: VALUE OF PRS STOCK IN THE UK BY REGION 2016-17 (%) 30 CHART 14: VALUE OF TOTAL CONSTRUCTION OUTPUT 2013-2022 BY VALUE ( BN AT CURRENT PRICES) 31 TABLE 15: VALUE OF TOTAL RESIDENTIAL CONSTRUCTION OUTPUT 2013-2022 (PUBLIC AND PRIVATE) (NEW BUILD AND RMI) BY VALUE ( BN AT CURRENT PRICES) 32 TABLE 16: PRIVATE RESIDENTIAL CONSTRUCTION OUTPUT 2013-2022 (NEW BUILD AND RMI) BY VALUE ( BN AT CURRENT PRICES) 34 CHART 17: CONTRACTOR OUTPUT VALUE OF THE BUILD TO RENT MARKET 2013-2022 BY VALUE ( BN AT CURRENT PRICES) 36 CHART 18: VOLUME SHARE BTR FROM ALL NEW BUILD RESIDENTIAL 38 CHART 19: TYPES OF ORGANISATION COMPLETING PRS SCHEMES BY 2017 39 TABLE 20: ENGLAND - REGIONAL CONCENTRATION OF PRS STOCK 41 TABLE 21: TOP REGIONAL PRS MARKETS (POPULATION/HOUSING TENURE/HOUSE PRICES AND PRS RENTS) 43 TABLE 22: LONDON BOROUGHS - PRS DATA (POPULATION/HOUSING TENURE/HOUSE PRICES AND PRS RENTS) 47 CHART 23: NEW HOUSING STARTS IN THE UK 2013-2022 BY VOLUME OF DWELLINGS 50 CHART 24: NEW HOUSING COMPLETIONS IN THE UK 2013-2022 BY VOLUME OF DWELLINGS 51 TABLE 25: HOUSING ZONES IN THE UK BY REGION - EST. NO. OF HOMES AND FUNDING ( M) 57 TABLE 26: LONDON HOUSING ZONES BY BOROUGH - EST. NO. OF HOMES BY ZONE 58 TABLE 27: AFFORDABILITY FACTORS UK - AVERAGE DWELLING PRICE AND EARNINGS RATIO: 2007-2017 YEAR TO DECEMBER 2017 59 CHART 28: RENTAL GROWTH VS. HOUSE PRICE GROWTH (% CHANGE) 2006-2017 60 CHART 29: VOLUME AND VALUE OF BUY-TO-LET MORTGAGE ADVANCES 2009-2018 ( BN) 61
CHART 30: ESTIMATED OWNERSHIP OF PRS STOCK IN THE UK TYPE OF OWNER: 2016-17 ( BN) AND (%) 65 TABLE 31: LEADING OWNERS OF PRS STOCK: UNITS COMPLETED AND PLANNED 67 CHART 32: FORWARD PLANS OF PRS UNITS BY KEY OPERATOR 70 TABLE 33: LEADING HOUSING ASSOCIATIONS IN THE PRS/BUILD-TO-RENT SECTOR 71 TABLE 34: LONDON BOROUGHS - COUNCIL-OWNED DEVELOPMENT COMPANIES DELIVERING PRS 76 The 'Private Residential Rental Market Report - UK 2018-2022' costs 845+VAT (if applicable) for a PDF version. Other formats are available - click here for a information about available report formats. All AMA reports are sold with a single user licence as standard. For more information about AMA licences click here. About AMA Research Established in 1989, AMA Research is widely recognised as the leading specialist provider of market research to the UK building and construction industries. AMA s research and analysis goes beyond the more commonly available range of statistical and company information to provide expert, informed commentary and in-depth market analysis, making the reports a valuable and relevant resource for understanding the UK s construction and associated markets. We offer the following: Consultancy and bespoke research projects Published research reports - 150+ high quality, detailed research reviews covering a wide range of environmental, building and construction products. Our extensive experience and in-house research database enables us to offer specialised and flexible bespoke research services, as well as giving excellent value for money. Our experienced in-house team of researchers are experts in their fields and adept in conducting original and relevant research for reports or bespoke projects, and key decision makers across the building and construction industries, both in the UK and abroad, frequently use our high-quality reports as their primary source of market data. To find out more about AMA Research, visit: www.amaresearch.co.uk or call us on +44 1242 235724