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Is renting becoming more popular than buying?

Posted on Wednesday, 07 August 2013 10:37AM by Artful Lodger
Owning your own home has long been the ultimate ambition of many Britons. However, an increasing number of people are now choosing to rent rather than buy. While the recession and tough economic climate has undoubtedly played a part in this, it may also signify a cultural change is taking place in the way individuals view home ownership.
Whatever the reasons behind this shift are, it certainly presents both opportunities and challenges for letting agents and property managers.
The growth of generation rent
To put it simply the private rental sector (PRS) is booming. Earlier this year, the Office for National Statistics released data from the 2011 government census, which showed the number of rented households in the UK has grown to 8.3 million, meaning an extra 1.6 million people have entered the PRS since 2001.
Furthermore, the level of individuals renting from a private landlord or letting agent has more than doubled, rising from 1.7 million to 3.6 million. The increasing popularity of the PRS was a common trend across all regions of the UK, although it was most pronounced in London, where over half of all households were rented.
Earlier this year, Lucy Jones of LSL Property Services - the firm behind companies such as Right Move and Reeds Rains estate agency - predicted that a fifth of the population, which is roughly 12.6 million people, will be living in rental accommodation by the middle of the decade.
"Renting was the future before the recession, it cushioned many during and it’s still the future for millions," she stated.
Taking advantage
With so many people opting to rent rather than buy, this naturally presents excellent opportunities for letting agents and property management firms. There is a huge market of potential customers to draw on and the rewards can be very lucrative.
Indeed, as the popularity of the PRS continues to grow, so does the cost of renting. According to recent figures from Homelet, the average price of a rented home now stands at £811 per month, which is the highest figure the organisation has ever recorded and an increase of more than five per cent on 2012 alone.
The latest Buy-to-Let Index from LSL Property Services, claimed the typical rental cost is somewhat lower at £737 per month, but also found rates have risen significantly in the past 12 months.
Furthermore, property management firms stand to benefit from the increased number of landlords who will buy property to take advantage of the booming rental market. Many of these individuals will invest in more than one home and will need professional help to run them.
Overcoming challenges
While catering to the needs of generation rent provides plenty of opportunities, it also throws up several challenges. With such a high level of demand, it can be easy for companies to bite off more than they can chew and then find themselves struggling to cope with an unmanageable number of tenants.
However, one of the best ways of ensuring this doesn't happen is by using specialist PRS software. By drawing on a system that is specifically designed for the rental industry, companies can simplify the many processes required in the day-to-day running of a property management company, allowing them to use their time and resources more effectively.
To find out more about the benefits of letting agent software, click here .