News: Private Rented Sector Continues to Grow
According to a senior economist at NatWest, in 8 years time there will be more people renting than there will be people owning their homes – ensuring the continued growth of the private rented sector (PRS) for years to come. As the gap between wages and house prices continues to widen, it is predicted that fewer people will be taking out mortgages, turning instead to the PRS for their housing needs.
This prediction is supported by figures from the Department of Communities and Local Government, which show that 4.7 million households in England are already in privately rented accommodation, with numbers significantly growing year-on-year (YoY).
Although reports are claiming that the national average asking price for rental properties has suffered a 0.2% YoY drop, this has been skewed by the South East and London, where asking prices have dropped by 2.3% and 3.7% respectively. In contrast to this drop, the North West, North East, West Midlands and East Midlands areas have all shown YoY increases, suggesting that investors are moving their money away from the capital.
Landlords across the country earned £54 billion in the year from June 2016 to June 2017 – twice the total figure of interest paid by homeowners – proving that the PRS is a secure investment choice, with no signs of slowing down, despite recent news stating otherwise.
Thanks to the continued growth of ‘generation rent’ – those who see renting as a lifelong alternative to a property market they have been priced out of – investors can look forward to plenty of demand for their properties.
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