Spectacular growth for private rental sector

The private rental sector could grow an additional 6.5 per cent in just three years, it’s been forecast.

This would bring the total number of privately rented dwellings to just shy of 5.8m.

Octane Capital analysed PRS stock levels across each region of Britain since 2005, looking at how they have changed and, based on these trends, how they could change over the coming years.

The latest data shows there are almost 5.5m PRS dwellings across Britain today, 2.4m more than in 2005 - a 79 per cent increase.

While London remains by far the largest private rental market in Britain, it’s the West Midlands that has seen the most market growth, with the size of the sector increasing in that region by 113 per cent since 2005. The North West (up 98 per cent), Wales and East Midlands (both up 86 per cent) have also enjoyed some of the largest market growth since 2005.

The South East has seen the lowest rate of growth during this timeframe, but has still rising 62 per cent.

Octane Capital estimates that stock levels could climb by over six per cent in the coming years, hitting almost 5.8m.

London is forecast to remain the predominant force where total volume is concerned, but it’s Wales that is expected to post the strongest growth, with the privately rented sector increasing in size by nine per cent.

The South East is the only region that Octane Capital predicts will see a decline in total stock levels, with a two per cent dip.

“The performance of the private rental sector has been somewhat mixed of late, with growth stagnating in some regions, even declining in some cases” explains Octane’s chief executive, Jonathan Samuels.

“This is hardly surprising, with a raft of legislative changes designed to deter landlords from the private rented sector complemented by a severe drop in demand during the pandemic.

“Despite this, the market remains substantially larger than it was back in 2005 and looks set for a return to form over the coming years, growing in size across all but one area of Britain.”