The Growing Market of The Private Rented Sector in the UK.
Last updated: 11.31am, Sunday 29th August 2021
We look at the growing market of rented properties in the UK, especially in Glasgow and how we can help you create wealth and income in this sector.
By Gordon Campbell
The value of the Private Rented Sector (PRS) in England, Wales and Scotland grew by 5.8% to £1.4 trillion in the last year according to a new report, The Changing Face of Buy-to-Let from Shawbrook Bank.
Since the first national lockdown, house prices have rebounded at pace.
March 2021 saw house price growth of 9.9% year on year, as the Stamp Duty holiday boosted confidence and demand. Buy-to-let properties have also seen marked price increases, with the value of the average buy-to let property across the UK rising by 5.6% to December 2020 to approximately £258,900.
Has the Last 18 Months Changed The Market?
The past eighteen months have been a period of substantial consequence for the PRS, which had already been impacted in recent years by taxation and regulatory changes.
Some landlords chose to leave the market and the PRS actually contracted in size over the last year.
Separately, many tenants made a change, opting to return to their family homes during the pandemic, to leave cities in search of more space, or to make the most of the Stamp Duty holiday and become homeowners themselves.
This reduction in the size of the PRS therefore isn’t surprising after the last year.
The outlook however points to growth.
What About Tenant Demand?
Demand from tenants has been growing. In total, 42% of landlords report that they have seen demand increase for their properties in the past 12 months.
In addition, two thirds (67%) of landlords said that they were confident about the future of the property market over the next twelve months, with a third (34%) of all landlords planning to buy a property in the coming year.
Is There a Long Term Demand?
There always has and always be and with continued growth in the rented sector.
As house prices continue to grow, an increasing number of people are renting for longer.
Half (49%) of renters say they expect to be renting for the rest of their life.
Affordability is one reason behind these figures.
Against the backdrop of the pandemic, the PRS has once again shown its strength and the important role it plays.
Landlords are looking to expand their portfolios due to a combination of rising house prices, attractive yields and growing demand from tenants.
Borrowing to help fund this expansion is an attractive option, with landlords presented with great choice and historically low mortgage costs.
“While more first-time buyers have stepped onto the property ladder in the last year, the reality is that rising house prices mean more will continue to be locked out of home-ownership.
This, coupled with disruption to employment and lagging wage inflation, will make it difficult for some to buy their own home.
In addition, with more choosing to rent for the flexibility and freedom it offers, there is a clear need for professional landlords who can offer high quality accommodation.”
The rental market is particularly buoyant in Scotland as the level of demand from tenants has spiked across the country in the last couple of years.
Rental demand in Scotland is up a staggering 71 per cent, while the supply of new homes to let has only increased by 12 per cent over the same time period.
House price growth is as equally strong.
House Prices in Scotland are rising faster at 10.6% than the UK average of 10.2%.
Our main focus investment area, Inverclyde, the annual increase was 3rd highest at 13.9%.
Glasgow City Council area was 12.8%.
Despite a very strong market in Glasgow and surrounding areas, Alliance Property Group gives you a unique offering:
Our properties are all:
- Off market and exclusive to you.
- below market value
- high yield and cash flow
- the right properties in the right area with right demand for rent or eventual resale
- properties in a high capital growth area.
- One Stop Solution for you
If you wish to discuss your investment strategy or find out more in how we can help you achieve wealth and income in property, please contact us and we would be delighted to help in any way we can.
Thank you for reading
Gordon and James.
Alliance Property Group. Making a Difference