The private rented sector is expected to grow by 700,000 households to 5.5 million by 2020, accounting for 20 per cent of the total housing stock.

A new report on the buy-to-let sector by Kent Reliance claims nearly 150,000 new households were added to the PRS in the year to March, meaning the PRS now accounts for 18 per cent of all housing stock. The report says that in the past 12 months, the PRS accounted for 77.4 per cent of all new households created.

Buy-to-let has come of age, moving from a niche asset class to one big enough to rival the stock market. 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 remains brisk.

Long-term price inflation is not in danger, given the gaping chasm between growing demand for housing and the number of houses being built each year. Combined with the dearth of high LTV lending to first-time buyers, this will continue to buoy demand for rental accommodation, as well as landlords’ returns, and the sector will continue to expand.

Mortgage Strategy 28th May 2015

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