Knight Frank’s new Tenant 2015-16 Survey shows that large scale investment into the private rented sector (PRS) by funds and other institutions is set to treble over the next five years across the UK.
According to the survey, investment by large-scale investors in Build-to-Rent is set to triple by 2020, with Knight Frank estimating that total investment will rise to £50 billion over the next five years. Large-scale investors are operating an average gross to net yield of 26% for new Build-to-Rent developments.
Some of the other key findings of the survey;
The majority (53%) of tenants favour a six month or one year tenancy for rented accommodation.More than half (52%) of tenants said living close to work or their place of study is a key priority, and the main reason (30%) for moving between rented properties was to ‘upgrade’ to a nicer or larger property.
More than a third (38%) of tenants have lived in five or more rental properties. While the majority of respondents had moved within a mile of their previous property, around a sixth (19%) had moved more than 60
miles, indicating a relocation for work or study, highlighting the flexibility of PRS as a tenure.
Nearly a quarter (24%) of Londoners are prepared to pay 50% as a maximum amount of their gross annual income on rent, up from 22% last year.
A quarter of those living in the PRS do not want to, or don’t know if they want to buy a home in the future.
Of those that express a desire to eventually buy a home using a mortgage, less than half are currently
saving towards a deposit.