More investment needed in private rental sector for the future

30 March 2012 Categories: News

More investment needed in private rental sector for the future

A joint report commissioned by Rightmove and Savills has predicted that within the next 4 years (by the end of 2016) over 1/5th of all UK households will be in privately rented accommodation. The report, which was published on Tuesday, also estimated that in order to house the predicted influx of private renters an additional 1.1million properties would need to become available.

At the present time there are estimated to be 4.8million private rental properties in Britain, an increase of nearly 50% since 2002. It is also estimated that 27% of properties in London are private rental properties, with another 24% being social renting.

The report then goes on to speculate that nearly £200billion of investment will be required to provide the 1.1million extra rental properties, but only £50billion is forecast to come from the buy to let industry…a possible problem in the making.

The director of Savills residential research, Lucian Cook, commented on the report saying; “The dynamics of supply and demand make a great case for investment in this sector, and rising rents and lower capital values have begun to attract private investors back into the market. Investment returns relative to other asset classes will dictate the pace of investor entry to this sector”.