17 Nov

Landlords set to own £1tn of property

Landlords set to own £1tn of property

Private landlords are on course to own around £1 trillion of property by next year, according to a new study.

Figures from mortgage lender Kent Reliance show the private landlord sector has increased substantially in recent years - it is now worth around 3.5 times more than in 2001.

Increased house prices and strong returns have encouraged more people to consider buy-to-let as a key investment, which has had a dramatic impact on the market.

It is estimated around two million households have been added to the private rental sector since 2001 and Kent Reliance forecasts that by 2016 the total will have grown to five million - equal to just under one in five households.

Office for National Statistics and Land Registry data show buy-to-let landlords currently own properties worth a total of £930.7 billion and this could rise to £1 trillion worth by late spring 2015.

Andy Golding, the chief executive of OneSavings Bank, which owns Kent Reliance, explained landlords have enjoyed substantial success in recent years due to a number of factors.

He added: "Private renting isn’t a flash in the pan, and 80 per cent of new households since 2001 have been accounted for in rental properties. While for many it is a lifestyle choice, the ongoing squeeze on wages, rising house prices, not to mention difficulty in obtaining sufficient mortgage finance is accentuating this shift in tenure from owner occupation to long term renting.

"In many ways, Britain is becoming a more normal nation, much more like its continental neighbours as a result."

The strongest increase in buy-to-let ownership has come in the South East and London. The capital accounts for 41 per cent of the sector’s value. This has been matched with a rise in overall buy-to-let lending - a 34 per cent increase over the past 12 months.

Kent Reliance estimate the average landlord has seen a return of 15 per cent over the last year- equal to £27,475 per property.

Changes in the current rules regarding pensions could also lead to more people considering becoming landlords to provide an income during their retirement.ADNFCR-1222-ID-801760438-ADNFCR

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