London driving rental market growth with largest uplift in PRS property availability
Research from specialist property lending experts, Octane Capital, has revealed which areas of the British rental market are driving growth in rental stock availability, as well as the areas where tenants have seen availability decline.
Despite the government’s attempts to deter buy-to-let investment, previous research by Octane Capital found that the total value of the sector has increased by £239bn since 2017, with the nation’s landlords benefitting from a strong level of capital appreciation.
Octane Capital’s latest research also shows that across Britain, the level of private rental homes has actually increased by 18,610 in the last five years, suggesting an exodus of landlords has yet to materialise in the wake of legislative changes to tax relief, stamp duty and tenant fees.
London is leading the private rental market charge and is not only home to the largest rental sector with over one million PRS homes, but it’s seen a 6.4% increase in stock levels in the last five years – that’s 63,000 more rental homes to meet tenant demand.
In the West Midlands, PRS stock levels have climbed by 4.4%, closely followed by the East Midlands with a 3.9% jump.
The South West (3.2%), Wales (2.2%) and East of England (2.1%) have also seen an increase in the number of private rental properties within the sector.
But not all regions have benefited from an uplift in rental stock levels.
The North West has been hit hardest by a reduction in private rental availability, currently home to 556,005 PRS homes, 34,000 less than just five years ago – a drop of -5.8%.
In the South East, the level of privately rented homes has fallen by -5.2% during the same timeframe, meaning there are 36,500 fewer properties for tenants to fight it out over.
Yorkshire and the Humber has also seen a notable drop at -4.6%, with Scotland (-2.9%) and the North East (-1.6%) also seeing a decline.
CEO of Octane Capital, Jonathan Samuels, commented: “Much has been made about the government’s intentions to deter landlords via a string of legislative changes designed to reduce buy-to-let profitability, but as it stands, we’re yet to see any top line decline in private rental stock levels as a result of these changes.
That said, some areas of the British rental market have fared far better than others and while stock levels have increased across the majority, there have also been some notable declines.
The private rental market remains vital to so many across Britain and it’s crucial that the government recognises this and does its best to nurture the sector in order to encourage landlords, not deter them.”
Private rental stock data sourced from Gov.uk, Gov.wales, Gov.scot and ni.gov.uk – 2015 to 2020 (latest available data).
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