Savills and rightmove have teamed up to produce a special “Rental Britain” report. Here we provide a summary of the findings.
The total value of private rented stock in the UK reached £840 billion at the end of 2011, a rise of 42% in only 5 years. That equates to in the region of 4.8 million households in the private rented sector.
It is estimated that £48 billion was paid in rent during 2011, and this is forecast to rise to £70 billion within the next five years
Rents vary across the country, but in terms of an individual’s affordability, the average rent in London for a 2 bed property forms 53% of a single person’s salary, where in the North East, it is just 25%.
In terms of rental yields, smaller properties outperform larger ones, with an average gross income yield of a one bed property at 6.7% compared to just 5.2% for a three bed property.
An estimated £200 billion of investment in the PR sector will be required to meet the demand from renters.
As for supply and demand, rightmove research has shown that search activity has more than doubled over the last two years, while available stock for rent is down by nearly 10%. The RICS reported letting activity outstripping new supply for 11 successive quarters to January 2012. As for our own experience, good housing stock certainly rents fast and demand doesn’t show any sign of slowing.