Landlords in the UK are increasingly housing young families for longer periods, as the number of children living in privately rented homes has more than tripled since 2000. Recent data from the Resolution Foundation highlights significant shifts in the private rented sector (PRS), with implications for landlords, tenants, and housing policy.

Rising Numbers of Children in the Private Rented Sector

The Resolution Foundation’s latest Housing Outlook report reveals that 3.2 million children were living in privately rented homes in 2024-25, compared with just 1.1 million in 2000-01. This means that one in four children under 11 now reside in the PRS, marking a substantial demographic change over the past two decades.

The report also notes that the PRS accommodates 12.9 million people across 5.2 million households, more than double the figures from 2000-01, when 5.1 million people lived in 2.5 million privately rented households. This growth reflects broader trends in housing demand and tenure preferences.

No Large-Scale Landlord Exodus Expected Despite EPC Challenges

Despite concerns over energy efficiency regulations, the Resolution Foundation does not anticipate a mass departure of landlords due to the costs of improving properties to meet EPC C standards by 2030. Currently, 2.3 million PRS properties in England fall short of this requirement, representing 47% of the sector’s stock.

Improving a property to EPC C typically costs around £9,000, which equates to approximately 75% of the median annual rent income for landlords with a single property. The Foundation acknowledges that some landlords operating on tight margins might exit the market, but large-scale exits are unlikely, as similar regulations in the past did not trigger widespread withdrawals.

Moreover, while policy changes over the last decade have increased landlords’ tax burdens, there is no evidence that the overall stock of privately rented homes is decreasing.

Changing Demographics of Private Renters

The proportion of the UK population living in the PRS has risen from 9% in 2000-01 to 20% in 2024-25. This increase is partly due to reduced affordability for first-time buyers and limited availability of social housing. Notably, the share of people in their 30s renting privately has nearly tripled, from 10% to 28%, the largest rise among age groups.

Infants under one year old are particularly likely to live in the PRS, with 27% residing in rented homes. Children overall are slightly more likely than adults to be in the sector, at 23% versus 22%. The Foundation emphasises the importance of effective policy in this area, stating, “Today, children are more likely to be living in the PRS than working-age adults. Getting policy right in this space is now more important than ever.”

Longer Tenancies and Affordability Pressures

Tenants are staying in privately rented homes for longer periods, with the average tenancy length increasing from 3.7 years in 2010-11 to 4.7 years in 2024-25. However, this remains significantly shorter than the average durations for social tenants (12.2 years) and mortgagors (8.9 years).

Private renters spend an average of 35% of their income on housing costs, exceeding the commonly used affordability threshold of 30% and surpassing the proportions seen among mortgagors and social tenants. The Resolution Foundation highlights the urgent need for policy intervention, noting that Local Housing Allowance rates have been frozen in cash terms, widening the gap between housing support and actual rents.

Looking ahead, the proportion of over-65s living in the PRS is projected to rise from 4% in 2022 to 13% by 2040, indicating an ageing tenant population within the sector.

What this means for landlords

Landlords should be prepared for a continued demand from families and longer-term tenants in the PRS. The growing presence of children and older tenants highlights the need for properties that accommodate diverse household needs. While energy efficiency improvements present upfront costs, the likelihood of a large-scale exit from the sector remains low, suggesting ongoing opportunities for landlords who can adapt to regulatory requirements.

Affordability pressures on tenants may require landlords to engage with housing support mechanisms and consider the financial challenges faced by renters. Understanding these dynamics will be crucial for maintaining sustainable tenancies and meeting evolving market demands.

Source: Based on reporting from Property118

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