Nearly half of housing benefit recipients in private rented sector

The private rented sector now accounts for 70% of new household formation.

It is one of two startling new demographic changes in the sector claimed to have been uncovered in new research from property group CBRE.

It also says that nearly half of all people who get housing benefit now live in the private rented sector.

CBRE said that in the light of the Government’s new housing strategy, the Government’s focus on owner occupation is questionable.

The property group is calling for action to support PRS investment.

CBRE has also earmarked six UK cities with gross yields over 6% that it says could prove attractive to investors. They are Leicester, Sheffield, Coventry, Stoke-on-Trent, Reading and Birmingham.

Jennet Siebrits, head of residential research at CBRE, said: “Whilst the Government may wish to focus on owner occupation because it is what people want and aspire to, we cannot lose sight of what people actually need.

“Demand is especially high in the private rented sector at present with first-time buyers priced out of the owner-occupation market, and immigrants and increasing student numbers all looking for rented housing.

“We consider the private rented sector to be a critical plank in the provision of housing supply and the UK is currently suffering from an absolute shortage of places for people to live.

“There have already been a number of independent reviews to analyse the barriers to large-scale investment in the private rented sector, which could deliver the homes to meet demand, and what we need now is action.”