Review: The Private Rented Sector Hiring Market
With Student Accommodation reaching saturation point, after ten years of significant and expansive activity, the gulf in development demand looks set to be filled by Build to Rent (BTR) which represents new development projects for private rented sector (PRS).
The Private Rented Sector has continued to grow. The number of PRS households in the UK has increased from 2.8 million in 2007 to 4.5 million in 2017, an increase of 1.7 million (63%) households (Jan 2019, Office for National Statistics).
It is estimated that by 2030 around 1.75 million UK households out of a total of 5.0 million within the private rented sector will be occupied by tenants living in new build-to-rent developments. Alongside this, there is the inevitable increase in Affordable Housing, thus ensuring that the demand for high calibre building in the residential sector will be considerable.
As a result, the BTR sector will rise in value from its current level of around £9.5 billion in 2019 to over £500 billion at maturity, approximately a third of the PRS’s £1.5 trillion potential value.
Currently it’s difficult to see that the Build to Sell house builders will all want a piece of this market. But given that the majority of their schemes now include around 20% of Affordable Housing, there is every chance they may create a different business model to service the BTR market.
This huge surge in investment and building is driven in part by the exit of individual landlords from the Private Rented Sector, 100,000 of whom have quit since recent tax changes were introduced. Institutions, developers and private equity see it as the perfect time to get involved. That said, the market remains ill-formed and significant supply remains elusive.
The overall PRS market is yet to really define itself but the signs are that it will make progress and become a fully fledged sub-sector of the wider real estate sector. Get Living London schemes at Elephant & Castle and Stratford have set the bar high. EcoWorld‘s scheme in Barking is substantial and others will follow.
The Private Rented Sector job market
In the 2019 psd and Building Magazine Salary Survey*, which targeted approximately 5,500 property & construction individuals at senior management to director level, 18% responded that growth in the residential development sector will come from the private rented sector – second to RP (register providers).
Results also suggest that there is a correlation between the growth of the PRS sector and the increase in basic salaries, for example Projects Directors.
In 2018 the average basic salary for a Project Director was £107,000, however this increased by 11% to £120,000 in 2019.
Much of the demand for PRS professionals lies in two areas: those who have the capacity to set up new lettings and management functions on a large scale; and those who have the all-round capability to develop a brand and acquire appropriate sites, while getting the operational aspects right.
In 2019, we have placed candidates into asset management, investment, acquisition, development and project roles, as well as senior finance positions, in the PRS sector. In respect of operational recruitment, our Hospitality & Leisure team provide an invaluable source of candidates.
psd have a long history of working in partnership with many PRS associated markets including, Real Estate Fund and Investment Managers, Residential Developers and Asset Manager and Developing Registered Providers.
We have assisted many organisations in recruiting PRS professionals to bolster their existing and growing operations as well as supporting new businesses who are looking to establish new PRS division. For Managers looking for their next career move, now is the time to connect with a recruitment specialist who keeps in touch with what is going on, understands the market, and has the industry contacts to connect the best talent with the best opportunities.
* There were two elements to the research: an attitudinal survey that targeted approximately 5,500 individuals at senior management to director level across the residential sector and data from placements made by psd over this period. The salary guide will be published in October 2019. For your copy, please contact firstname.lastname@example.org
Peter leads psd‘s work in the Property & Construction sector. He recruits senior and board level positions in development, construction, fund management, private equity, property services, PRS and affordable housing.
He is also Head of psd‘s global HR practice, recruiting senior and board level positions across all sectors.