With private landlords putting an estimated £20 billion into providing homes in the UK (according to Carolyn Uphill, chairman of the NLA) the private rented sector is officially the fastest growing segment of the housing market to date.
With the current crisis of a housing shortage in the UK, the market is desperate for the growth that buy-to-let landlords can generate. Regardless of whether one is a full or part time landlord, all additions to portfolios will increase the provision of property for a wide range of renters including commuting professionals and families.
New figures from the NLA reveal that part time landlords now make up more than 70% of the UK housing sector. More than this, 20% of these landlords are encouraged by the current rental market.
Carolyn Uphill went on to state that the data has also revealed that “a typical part time landlord has, on average, four properties and generates an annual gross rental income of £31,000”.
These figures now confirm that the private rented sector itself has doubled in size over the past 20 years, and, when extrapolated into the future, they also suggest that the market will do the same over the next 20 years. Further findings from the NLA found that ‘40% of all landlords feel it is now easier to access buy-to-let mortgages, whilst four in 10 have used buy-to-let finance to expand their portfolio”
This encouraging news, combined with government schemes aimed at supporting the sector such as the £1 billion build-to-rent fund, will only add to the growing strength and prosperity of the private rented sector.
Moreover, further investment would help create a more dynamic market as well as boost the economy through the generation of jobs in residential projects, and in turn fuel the construction industry through increasing the number of properties on the rental market.
The private rented sector may be the fastest growing segment of the housing market but it is also undergoing dramatic changes as a result of a series of factors.
Firstly, the range, as well as the number, of property investors is expanding. This can primarily be put down to that fact that buy-to-let is an obvious and appealing long term investment. However, it is also likely that because of new pension rules more retirees are considering buy-to-let as a means of supplementing their income in a more risk-averse yet effective way. Consequently, the profile of landlords is changing as, amongst other things, their average age is likely to be rising.
This changing profile of landlords will, in turn, place new demands on letting agents, thus forcing the industry to adapt and re-shape in order to make room for slightly different services that are likely to be commoditised, value-added and more concierge-style.
However, the market, as a whole, must learn to embrace new technology for transparency as well as efficiency, responsiveness and speed of service.
For more information click on the links below: