The private rental sector (PRS) is forecast to grow by 700,000 households, to 5.5m, by 2020, accounting for 20% of all housing stock.
Kent Reliance has released a new report on the buy-to-let sector, stating that almost 150,000 new households were added to the PRS in the year to March 2015. The PRS now makes up 18% of the total housing stock.
The research also found that in the last 12 months, the PRS accounted for 77.4% of all new households.
In the last year, the value of PRS property increased by 11%, or £97.8 billion, to £990.7 billion. London accounted for most of this, at £406.5 billion, followed by the South East, at £147.6 billion. Wales made up the least, at just £23.9 billion.
It is expected that the whole sector will be worth over £1 trillion soon and £1.45 trillion by 2020. Read more: /value-of-buy-to-let-could-reach-1-trillion/.
Average rents have risen by 3.9% annually, to £832 per month in the first quarter (Q1) of the year. The total rental income earned by landlords has reached £4 billion a month.
Landlords now receive £111.5 billion in gross annual returns, £67.2 billion in capital gains and £44.3 billion in rents, the report revealed. This has grown by £5.8 billion in the past year.
Chief Executive of Kent Reliance, Andy Golding, says: “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 [loan-to-value] 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.”1