One component of the housing crisis in the UK is the private rental sector. As house prices rise across the UK, there is a not-unrelated increase in tenants and private rental costs.
On 20 March 2024, the Office for National Statistics (ONS) released the most recent update to the Private rent and house prices, UK. This, confirmed the staggering increase in private rent across the UK, which rose by 9%. The graph below shows the private index percentage change of private rents in the UK in recent years.
The ONS update, together with other publications from the RICS and Rightmove, provide the following key points:
The average UK private rent increased 9% in the 12 months up to February 2024.
Rightmove reported a 1.5% monthly price rise in March 2024, notably higher than the 22-year average of 1%.
In the February 2024 UK Residential Market Survey, the RICS reported rising tenant demand and continue to expect rents to rise in the coming months.
Clearly, therefore, there is significant flux in the housing market and this is having residual impacts on the private rental sector.
Housing Affordability is a key component within development and has a significant role within the viability and deliverability of a scheme. Of course, the private rental sector is one factor to consider within any evaluation of an area's affordability.
Viable Placemaking are a town planning consultancy with a specialism in development economic and viability. We frequently support developers and applicants with these matters are part of a wider submission.
In addition, Viable Placemaking conduct Housing Benefits Statements, Housing Needs Assessments, and Affordability Statements which review the housing market in an area, including the private rental sector, to evaluate how a proposed development will contribute to the local community. These reports have proved indispensable in demonstrating how a scheme contributes to the social and economic sustainability objectives.
Recently, Viable Placemaking provided an Affordability Statement to support a planning application for new flats in Reading which was later approved. You can read more about this project here.
If you would like to find out more about how flux in house prices and the private rental sector can impact your development, or how Viable Placemaking can support your scheme from a development economics perspective, please don't hesitate to get in touch.