The Private Rented Sector (PRS) continued to grow apace in 2014 and according to a report by economicvoice.com and research carried out by Kent Reliance* the sector grew by nearly 150,000 households in the year to March 2015.
The research also shows that rented accommodation accounting for 77.4% of new households created across all tenures. Based on their research, Kent Reliance are now forecasting that on present trends, the sector will increase from 4.8 million households in Great Britain today, to 5.5 million by 2020.
More figures emerging from this research show that by the end of March 2015 the total value of property owned by landlords in Great Britain stood at £990.7bn, an increase of 11.0% in the last year. The sector’s value would be the equivalent of 43.1% of the value of the UK’s Stock Market, up from just 12.2% fifteen years ago. British landlords have seen total returns of £112bn in last year as private rented sector grew.
A summary of the main findings:
• 77% of new households created in last year housed in private rented sector (PRS)
• Nearly 150,000 households added to the PRS in the year to March
• As size of sector grows, and house price growth remains robust, total value of PRS has increased 11% to £990.7bn
• PRS now worth 43% of value of UK’s Stock Market, up from 12% in 2000
• Landlords generate £111.5bn nationwide in total annual returns, up £5.8bn in last year
Andy Golding, Chief Executive of OneSavings Bank, which trades under the Kent Reliance and InterBay brands in Buy to let, comments:
“Buy to let has come of age, moving from a niche asset class to one big enough to rival the stock market. Landlords are seeing the benefit of a structural change in Britain’s housing market, with tenant demand ever strengthening.
“Yes, house prices are showing signs of steadying somewhat, but growth remains brisk. Long-term price inflation is not in danger, given the gaping chasm between growing demand for housing and the number of houses being built each year. Combined with the dearth of high LTV lending to first time buyers, this will continue to buoy demand for rental accommodation, as well as landlords’ returns, and the sector will continue to expand.
“Supporting the growth in the number of experienced landlords with growing portfolios is crucial to providing the investment necessary in the sector to match demand. The mortgage market is playing its part, with re-mortgaging vibrant, and an increasing array of second charge options to suit landlords’ needs.”
Kent Reliance’s research team analysed ONS census data to establish the size and growth of the private rented sector. Rental property prices are based on the average differential between rental property and house price data from Land Registry and Registers of Scotland. Rental data incorporates figures taken from Citylets and yield data from LSL Property Services. All rental and property value data has been weighted to account for the changing regional composition of the private rented sector. Buy-to-let mortgage data is based on analysis of figures from the CML and ARLA. Rental data is limited to the period between 2007 and the first quarter of 2015.
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The PRS Now Rivals the Stock Market: The Sector’s Value Equivalent to 43.1% of the Value of the UK’s Stock Market – http://t.co/dBIjtOyeHf
— LandlordZONE® (@LandlordZONE) May 29, 2015