Monday, 20 September 2021

Landlords make record profit in last five years

LANDLORDS have collectively made a £177billion profit in the past five years

LANDLORDS have collectively made a £177billion profit in the past five years as a result of soaring house prices, research shows.

Estate agents Savills said private sector landlords have been among the biggest beneficiaries of the recent property market boom.

It said the total value of privately rented property in Britain had soared by 57 per cent since 2009, to top £1trillion this year, as a result of a combination of rising house prices and increased investment in the sector.

It estimates landlords have collectively made a £177bn profit on the rental portfolios since 2009 through house price growth, before income from rent is factored in.

Lucian Cook, director of residential research at Savills, said: “The benefit of recent house price growth has become increasingly concentrated in the hands of private investors. In a housing market that is expensive, relative to people’s income, it is difficult to see how this will change, particularly given increased mortgage regulation.”

Savills expects strong demand for rental homes to continue going forward.

It is forecasting the number of homes rented through the private sector will increase by 1.2 million during the next five years, with renters aged over 35 accounting for more than half of this growth.

As a result of the increasing age of tenants, it thinks demand for rented family homes will grow at a faster pace than demand for smaller properties.

The company forecasts rents in the mainstream market to grow “a little ahead of expected wage growth”, rising by 20.5 per cent across Britain in the coming five years.

In terms of other trends, it anticipates tenants will either pay more of their income to secure properties in locations with good amenities and transport links, or live in shared properties to maximise what they can get for their budget.

Strong house price growth has lifted the price of the average UK property to £267,650, according to one well-known property portal.

But there are growing  signs the market has  slowed, with house price growth of just three to five per cent forecast for the  year ahead.

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