Property News

40% of UK Housing Stock is Private Rental, Report Shows

Em Morley - January 22, 2019

In the last quarter (Q4) of 2018, 40% of the UK housing stock was private rental, increasing to 50% in cities such as Newcastle upon Tyne and Manchester, according to a new report from TwentyCi.

The marketing consultancy’s Property & Homemover Report for Q4 reveals a steady increase in the percentage of rental properties available over the previous 12 months.

However, the study confirmed an overall property market slowdown in 2018.

Despite a 4% rise in new instructions year-on-year in Q4, there was a 1.2% decline in exchanges, with 20% of property sales falling through, which might explain why rental stock has increased.

Overall, the data suggests that the north-south divide is very much still in existence, despite higher salaries in the south. For example, the 25% of highest earners in London will be spending between 40-60% of their take-home pay on their mortgage to buy a home of equal standing with a 40% deposit.

Meanwhile, the 25% of lowest earners in the capital would not be able to afford to buy a property of equal standing, as it would mean spending between 70-131% of their take-home earnings on their mortgages.

For the lowest earners, the cost of renting a property of equal standing would be between 57-90% of their take-home pay.

However, the figures show that there are many locations in the Midlands and north of England where the 25% of lowest earners can afford to rent or buy.

In Nottingham, for instance, to rent a home of equal standing would cost 35% of take-home pay, while buying with a mortgage would eat up 37% of take-home earnings.

Colin Bradshaw, the Chief Customer Officer at TwentyCi, says: “Q1 2019 and the outcome of the Brexit process will determine the outturn for the next 12 months.”

With such a high proportion of private rental properties in the UK housing stock, demand from tenants looks set to remain high.