Reflecting on a decade in the Private Rented Sector

We’ve ticked over into not just a new year but a new decade, and perhaps it’s time to look back 10 years and share some good news about the private rented sector in Britain.

There’s a lot of pessimism about the private rented sector – and sometimes landlords themselves join the chorus. But a look at trends over the last decade, rather than the last month or year, show there’s been a period of expansion, growth and profit for Britain’s vital private rented sector.

The recent perception is that disgruntled landlords are getting out of renting. Not true – at least when you take the longer view.

According to HM Revenue and Customs, the number of landlords has increased from 1.97million at the start of the decade to 2.5 million now. It’s a remarkable increase of almost 27%.

The number of private tenant household in Britain has also shot up, according to the governmental Office for National Statistics (ONS).

In 2010, 16% of households were in the private rented sector. By 2020 that figure is now more than 20%.

Monthly rents have also gone up significantly, especially in London, according to tenant and landlord insurance firm HomeLet.

Outside the capital, the average monthly rent has gone up by more than 27%, from £619 at the start of the decade to £788 now.

In London, we’re talking a rent rise across the decade of a massive 77%, from an average monthly rent of £940 10 years ago to £1,665 now.

Meanwhile house prices have risen across Britain since 2010 says the ONS, from an average £167,496 in 2010 to £235,000 today.

That’s an increase of 40%, which is significantly more than rental increases in most of Britain across the same period.

The result is that fewer young people can afford to buy their own home, and many of them are spending much more time in the rental sector than their parents did.

According to The English Housing Survey, 55% of 25-34-year-olds were homeowners in 2010. By 2020 that figure has plummeted to 38%.

With this new decade there will undoubtedly be fresh challenges for the private rented sector. But if we look back over the most recent decade, this sector is clearly a powerful and growing force; providing millions of homes to people who through choice or circumstance are just not ready for the expense, the permanence and the stress of a big, hamster-wheel mortgage.

The message from all this data is clear – the private rented sector can be a place of great opportunity and growth for both landlords and tenants when a reputable letting agent is used to minimise hassle for both.