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Population Projections have repercussions for Private Rental Sector

The Government quietly announced population projections towards the end of January that could have major implications for the types of homes we need going forward and, in particular, the private rental sector (PRS). 

According to the Office for National Statistics (ONS), the UK population is projected to grow by 9.9% to 73.7 million between 2021 and 2036. That’s an extra 6.6 million people that will need a roof over their heads. The overwhelming majority of the increase – 92% - is forecast to be driven by net international migration.

Immigration has long been a hotly debated issue, dividing opinion in the pub as much as in Parliament. It is now widely acknowledged that a migrant workforce is a vital component in the UK economy, so is as important now as ever before, but critics point to the impact that this has on our overstretched infrastructure.


Whatever your politics on this issue, this surge in international migration poses issues for UK policymakers and the housing market. Immigrants typically seek short-term housing solutions when they move to the country, either in the form of living with resident family or privately rented accommodation. 

Now look at the ONS’ household formation projections for England. These figures date back to 2020 and we expect an update from the Government next year, but they still highlight the direction of travel, which is that new households will be older and more people will live alone. This again has major implications for housing provision and demand for rented homes. 

Nearly two thirds, 64%, of the projected growth in households is where the household reference person (the head of the household in ONS terms) is aged 75 years or older. Meanwhile, 95% of the increase is attributable to one-person households and multiple adult households without dependent children. Again, one of the fastest-growing tenant groups in the PRS over the decade has been older people. 

Finally, let's consider the type of homes we’re building. According to the Department for Levelling Up, Housing and Communities (DLUHC), just 7% of homes completed in England in the year to April 2023 were one-bedroom houses or flats, a figure that falls to just 5% by those built by private enterprises rather than housing associations. Just under two thirds of housing completions were three or four-bed properties. 

So, what does this mean for the housing market? Put bluntly, not only are we not building enough homes, we aren’t producing the right type of homes to cater for future housing needs. 

Frustratingly, we aren’t just sleepwalking into a deeper housing crisis, we are striding towards it with eyes wide open. 

Government and policymakers know we aren’t building enough homes, but there is an apparent lack of desire or political bravery to tackle the underlying problem to address it. There have been so many Housing Ministers in recent years that they should install a revolving door into the holder’s office at DLUHC.  

Our housebuilders have raised concerns about the planning system being slow and burdensome, mired in local politics and interests, for years. Yet nothing of any substance has been done and the removal of the 300,000 housing target has exacerbated the problem. 

Looking at the PRS specifically, the brakes applied to the sector by the Government policies implemented in the latter half of the last decade worked. The rate of growth of the PRS has been curtailed and the number of owner-occupied homes, mortgaged or owned outright, has hit a record level according to the latest English Housing Survey. 

That’s great, but owner-occupation will not be the only game in town for our future housing needs. We need to be clear with policymakers and politicians – rented homes will be an important part of the mix and those policies need to be reconsidered in the light of our shifting population demographics.  

Policies need to be developed that encourage continued investment in the sector from private landlords who can quickly and efficiently react to local market needs. 

Build-to-Rent will undoubtedly be part of the solution, but it will continue to complement rather than replace private landlords. I have said it before, but there is competition for capital; private landlords need a stable and fair regulatory and fiscal environment in which to operate. 

As we look towards a new Government in the coming months, we urgently need a radical, holistic, realistic and deliverable plan to meet our future housing needs. We will be working with whichever Government is in place to stress this point.

Anything else is storing up major problems for future generations. 

* Richard Rowntree is Managing Director of Mortgages at Paragon Bank *

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  • Jaeger  Von Toogood

    Fantastic news for the landlord! Successive governments failure to control our borders has resulted in massive population growth, way beyond the current housing supply and it seems nothing will change over the next decade at least!


    Its only 'good news' if we are enabled to provide rented housing free of damaging interference from Gov and politicised so called charities. In that repect, i am not optimistic!
    In our current position as private landlords, few would now think its a business worth all the agro.

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    We are about to lose our country and our identity, our so call leaders of the present and past should hang their heads in shame. 🫣. Given I am on my last few properties to sell, I can watch from the sidelines 😱😱So avoidable. I refer you to the example of 🇸🇪 Sweden 😬😬.

  • Ian Deaugustine

    I wonder what the priorities of government politicians are, considering that clearly, they have no whatsoever interest in the well-being of their people.


    Their priorities are number one, themselves only

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    He's quite right on most points.
    There is a complete lack of availability of one bedroom self contained properties. However, that's largely because a one bed only costs fractionally less than a 2 bed to either build, buy or rent. A 2 bed does give a lot more choices (lodger, live in carer, office space, etc).

    The government needs to reassess how it regards the PRS. Right now it seems to feel we are an evil presence that should be eliminated. In reality almost everyone will be a PRS tenant at some point in their lives.
    When they're at university, when they graduate and realise the job they want is nowhere near where their parents live, when they want to try living with a partner to see if they are compatible, if they get a fixed term work contract in a different area, if the house they own needs major building work, when they get divorced, etc.
    The PRS is a quick solution to all those housing needs. Social housing was never intended for any of those situations.

    It's a simple fact that some people want and can afford the stability and certainty of homeownership. That's great if they are rooted enough in an area and have a stable enough income to make a long term commitment to a property.

    Other people want Social Housing and are willing to jump through the necessary hoops to obtain it. Years on a waiting list, constantly bidding for houses in a geographically large area, maybe months in a hostel or hotel room with no cooking facilities while waiting to be allocated somewhere.

    The PRS is the middle ground. Far more accessible than either homeownership or Social Housing. As such it should be nurtured and allowed to florish. It would be incredibly simple to boost the supply of PRS housing with a few tweaks to taxation and regulation.
    Reinstate taper relief or indexation relief on CGT. (Without an exit route why would anyone enter the industry)?
    Abolish Section 24. Tax us in the same way as every other business. Stop all the nonsense about classifying BTL as a business for some purposes and a passive investment for others.
    Refund the extra 3% SDLT after a property has been let as a standard BTL for 3 years.
    That would give a lot of us the ability to go out and buy more properties ASAP.

    That last sentence assumes regulations are culled to something sensible. The RRB needs to be scrapped. Evictions need to be far quicker for rogue tenants. More needs to be done to help the very few genuinely good tenants who face eviction.
    Licensing schemes need to be closely examined and a cap of £500 needs to be put on the fees. Have licensing schemes actually achieved anything other than increasing rents? The Councils already had numerous ways to improve standards or close down substandard rentals.


    Interestingly when we ran our agency we found 1 bed rentals or sales were much slower to move.


    Like ur comments- but I don’t think we are going to get anything from this gov or the next one- A labour one. We will continue to be beaten with a stick.


    Excellent well thought comments from you Jo. If only the Politicians could see sense. Because they are failing with all their other policies they use the landlords as a political football to appease an ever increasing unhappy electorate. They should stop listening to the activists and adopt some of the ideas you suggest. The country needs the PRS whether they care to admit it or not. The other elephant in the room is immigration which also needs to well managed.

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    The statisticians are presuming that single person households want a 1 bed property. A 2 bed provides a better lifestyle. Enabling house guests to stay and providing much needed storage space. Modern builds often lack storage space.


    Not to mention a possible home office,

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    But all too many migrants are here for the free ride I don't want them in my properties, if they are in full time useful work they are welcome as often I find they make better tenants than white British


    I must admit I have always found foreign tenants to be excellent. Fifty percent of my portfolio is let to foreign nationals.


    Andrew, pleased that you have had some good overseas tenants.

    I've always refused to be an immigration officer for the government, as If I get it wrong there's a huge fine coming my way, so why should I risk it?

    Normally do not accept them as tenants as I don't need to, I have so many other people applying at the same time, I just pick the best 1.

    Recently had a tenant (worked for the police) that was married to someone from overseas, a nationality where I work with and respect as they are very hard working.

    After a few months there were rent arrears and 2 families living in the house and other breaches of contract. Rooms repainted and unauthorized pets... So after my first visit, I recommended that they find a better landlord that would accept their total lack of respect for the tenancy agreement.

    Luckily for me they broke up a few months later and left without a fight, but with unpaid rent, which they told me to take from the deposit.

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    The idea that we need immigrants to do our jobs is wrong. Why can't our people do the work? The answer is because there are a group of people who would rather live on benefits then go out to work. The council should offer jobs to the unemployed who are capable of working, either advertised jobs or supply work themselves. Then if they do not take up the job offer stop their benefits. Why should hard working tax payers pay for the lives of lazy people?


    It used to be the case that is, after you were sent for three job interviews, you did not find work, your benefits were stopped. Too easy these days to claim mental health etc or ADHD etc.


    You're right to a point but there are other issues.
    Recruitment based on diversity box ticking is a major problem.
    I work for a company that has been an integral part of the UK for 500 years. It was standard working class employment for the indigenous population (especially men) for about 490 years. Now it's all about ticking diversity boxes. Never mind if they can do the job or not. Just make them a manager if they can't do anything useful. Productivity has dropped off a cliff. Morale is rock bottom. It's like watching something in slow motion a lot of the time.
    I see a lot of people who are very enthusiastic when they first start on a ZHC and are deluded enough to think if they work hard and impress the managers they will get a proper contract. They are bottom of the recruitment heap no matter how competent they are simply because they don't tick the diversity boxes.


    100% John. 👍


    This is spot on John, coupled with the fact that benefits often pays better than entry level/low skilled jobs, so it's financially better for them to stay on benefits rather than get a job - utter madness.

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    In the MAil today, "Hard-working British families have slammed 'Wall Street landlords' for 'pricing them out of the housing market' by buying up new builds to line their pockets. There was £1.3billion of private investment in British new builds last year and almost two fifths came from American funds."

    Not a peep from Shelter, the Housing Advice Charity that houses nobody.


    It's an open market place, every one has the same chance to buy, if these people don;t have the money that's their fault

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    Do you know what?.... I'm at the point where I couldn't give a monkeys any more about the housing crisis etc. Once I sell my portfolio its not my concern. That may sound harsh but why should I care, the way I've been kicked around as a landlord in Scotland?
    I'm sorted, have my own home paid for by the years of graft I've put in. I used to want to make a difference whilst at the same time, making a living from the rental game but now I don't give a sh*t....enough is enough.
    Now where to invest what's left after capital gains....?

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    Jo Westlake
    Yiu are correct. I have seen this for the last 30 years.

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    Richard Roundtree is on form with his facts, figures and general prognostication of the housing problem.

    However, as England gets poorer I'd favour tiny two bed EPC C flats in city centres and industrial estates. Tiny flats and small bills = affordability.

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    It makes little difference who comes in with unpalatable Regulations so unless they scrap Licensing Schemes and reinstate fully Section 21 otherwise not much point.
    In the 70’s / 80’s the Tenants were mainly working Class with real jobs not Academic pretend jobs working from home that used to be knitting.
    When someone came looking for Accommodation there was as no paper or references. The Landlord just looked him up and down and if he was wearing working Boots he was-in, if he was wearing trainers not a chance.


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