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Rapid Growth of Private Rented Sector

June 2, 2015 | Landlord News  

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According to a new buy-to-let report from Kent Reliance, property investors saw total annual returns of £111.5 billion in the last year, divided between capital gains (£67.2 billion) and rents (£44.3 billion). This is an increase of £5.8 billion from March 2014. However, it has declined from the September 2014 peak of £137.5 billion, when capital gains reached their highest level in at least seven years.

The PRS was shown to have grown by nearly 150,000 households in the year to March. Rented accommodation accounted for 77.4% of new households created across all tenures. Based on present trends, the firm estimates that the sector will grow from 4.8 million households to 5.5 million by 2020.

The value of the sector has likewise increased. The total value of property owned by landlords stood at £990.7 billion in March 2015 – an 11% increase from March 2014. The total value of the sector was thus shown to be equivalent to 43.1% of the value of the UK Stock Market, compared to just 12.2% in 2000.

From an analysis of the data, the firm predicts that the total value of the private rented sector will surpass £1 trillion in the next four weeks, and may climb to 1.07 trillion by March 2016.

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