Expansion of the private rented sector is likely to accelerate
The UK private rented sector has grown by 47.9% since 2007, according to the latest market report from Jones Lang LaSalle.
With high prices, unrealistic deposit requirements and mortgage constraints making home ownership unattainable, the expansion of the private rented sector (PRS) looks likely to accelerate with UK landlords looking to benefit from increasing rental demand.
The report suggests that 1.7 million additional privately rented homes will be needed over the next four years to meet demand. And according to James Davis, chief executive officer of online lettings agent, Upad, as a result of growing tenant demand, there is strong motivation for landlords to increase their portfolios and take advantage of the market.
The latest Private Rental Sector Trends survey from specialist buy to let lender Paragon Mortgages, indicates that 91% of landlords believe that demand was fixed or had increased between July and September this.
The survey also found that while 68% of landlords said that their rental income had remained the same during the third quarter of 2012, some 7% said that it had actually increased, another reason for landlords to feel positive about the performance of the sector.
With this positive news in mind, it seems UK landlords plan to increase their portfolios with the survey research revealing that the average holding is set to increase from 12.5% to 12.9 properties within a year. Of those surveyed, 16% plan to buy more property to rent out over the next 12 months.
‘The UK’s private rented sector is not only stable, it is increasing. There is more incentive than ever for UK landlords to invest in rental properties with the likelihood that we will see a significant increase in the number of accidental landlord’s entering the market over the next year,’ said Davis.
Landlords have also welcomed a change to the law which makes squatting a criminal offence in England and Wales. Until now, police could not evict squatters as soon as they moved in, so a home owner’s main option to get them out was through a civil court order which could be time consuming, expensive and stressful.
Now people who squat in a residential building face a Ł5,000 fine and six months in jail. The new offence will protect home owners or legitimate tenants who have been excluded from their homes as well as those who own residential buildings that they don’t live in, such as landlords, local authorities or second home owners.