Taylor Scott International News
The value of property owned by landlords in Great Britain is set to break the £1 trillion pound barrier next year, according to new research. The inaugural Buy to let Britain report from Kent Reliance shows that the total value of property in the private rented sector has now reached £930.7 billion, climbing by £109.5 billion in the last year alone, a rise of 13.3%. From its recent trough in 2009, the sector has gained £302.5 billion and the financial crisis had little impact on the sector. Even since the 2007 peak of the property boom, it has risen by more than quarter of a trillion pounds. The longer term growth is even more impressive, with the value of landlords’ assets now more three and a half times its level at the start of 2001 when it was £262.1 billion. The report suggests that resurgent property prices have been a key driver in the increasing value of the private rented sector but long term growth has been underpinned by very strong demand from tenants wanting rented homes. Since 2001, the PRS has expanded by nearly two million households, increasing by 71.4% since the start of 2001. There are now more than 4.6 million households in the British private rented sector due to a combination of individuals and families choosing to be flexible, ongoing net immigration, falling real wages, greater indebtedness among younger households, rising property prices and difficulty in securing mortgage finance. The report also suggests that a serious shortfall in house building and regulations requiring developers to build social housing are both pushing up the price of would be starter homes too. While there are signs that the rapid house price growth may be slowing, Kent Reliance’s analysis of current market trends suggests the PRS will break through the £1 trillion barrier in the second quarter of 2015. London currently accounts for 41% of the sector’s value at £377.3 billion while the South East is the next biggest component with its value of £137 billion or 15%. The South East alone has a greater value than that of the four smallest in monetary terms in the North East, Wales, Yorkshire and the Humber and the West Midlands. The disproportionate size of the PRS by tenure inside London’s population, where over a quarter live in privately rented homes, compared to 18% in Great Britain overall, is a major factor in the pace of growth in the overall sector's value, the report says. Rapid London house price growth has much a bigger effect on the private rented sector than it does in the wider housing market. The amount of rent tenants are paying each month across the UK has increased with the PRS. Landlords earned £44.8 billion in the 12 months to June, equivalent to nearly half the UK’s total annual household expenditure on food, and up by £2.3 billion or 5.5% compared to a year ago. However, the increase in rents themselves… Taylor Scott International
Taylor Scott International, Taylor Scott
