According to a report in the Guardian newspaper, private landlords are expected to own £1tn worth of properties by spring 2015, even though property price growth is beginning to slow down.
PRS in London Booming
The private rental sector is now 3.5 times larger than it was back in 2001 and landlords now own a staggering £930.7 billion worth of property in the UK. Much of the growth in the rental market is centred in London and the South East – London currently accounts for 41% of the rental sector’s value.
Buy to let lending is also on the rise once again. Around 40% of lending last year was to landlords and with interest rates set to stay low for a while longer, this figure is likely to increase. Figures released by one mortgage lender indicate that one in five homes will be rented by 2015.
Rising Property Prices Fuels Rental Sector
Much of the boom in the rental market is as a result of rising property prices and increasing interest from investors. First time buyers can no longer afford to buy cheaper homes so landlords are snapping them up instead. Landlords in the UK currently receive nearly £4 billion per month in rental income.
“Landlords have benefited from the recovery in house prices since 2009, which has pushed their wealth to within touching distance of £1tn. But as the sector’s value marches upwards, the main impetus has come from the growth in the number of households as demand from tenants continues to climb,” says Andy Golding, CEO of OneSavings Bank.
