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Residential buy-to-Let

British private rental sector providing good investment returns

Author: Staff

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The UK’s private rental sector has been providing investors with a strong level of return for a few years now, and, according to the latest report, this has continued into 2015 so far.

The sector grew by some 150,000 houses in the year to the end of March 2015, as the ever increasing average rental income and strong yields enticed new landlords into the market and saw more people who already owned stock increasing their portfolios.

According to Kent Reliance, the last year has seen the private rental sector account for more than three-quarters (77.4 per cent) of new households created across the property market as a whole.

This strength, and the continued level of demand from private tenants across the nation meant that landlords saw a total return amounting to some £111.5 billion over the course of the 12 months to the end of March 2015.

Andy Golding, chief executive of OneSavings Bank, a part of Kent Reliance, said the latest figures regarding the sheer volume of purchases by landlords, and the fact that returns are performing so strongly, shows just how the market has improved.

He said that it is indicative of a sector that has made the leap from being something of a niche asset to one that is among the strongest and most mainstream as it matures and becomes ever more popular.

“Landlords are seeing the benefit of a structural change in Britain’s housing market, with tenant demand ever strengthening. Yes, house prices are showing signs of steadying somewhat, but growth [in the rental market] remains brisk,” he added.

“Supporting the growth in the number of experienced landlords with growing portfolios is crucial to providing the investment necessary in the sector to match demand,” Mr Golding said.

Looking forward, predictions from the company also show that the swell in demand and supply is not likely to slow its growth any time soon. At the moment, some 4.8 million households exist in the private rental sector, but this is likely to grow to 5.5 million in the next five years as landlords continue to expand their portfolios.

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