Will big business help the rental sector?

Will big business help the rental sector?

With more and more big businesses such as banks and corporate investors getting involved in buy-to-let property, it begs the question, will big business help the rental sector?

The rental market in the UK has been growing hugely, not just over the past two years, during and following the pandemic, but over the past few decades.

There are many well understood and well argued reasons for this, with the most prominent being the constantly rising value of property in the UK and the failure of incomes to keep up with them, as well as the lack of supply of new housing, meaning that upward pressure is almost constantly applied to house prices.

Fundamentally, you can probably quite convincingly argue that a failure of wages and incomes to keep up with inflation in other areas has contributed quite a lot to the issue, but the fact remains that a significant addition of stock into the market would relieve an awful lot of the pressure too.

There is also the issue that these pressures tend to differ in severity depending on where you live. Unsurprisingly, more rural areas and places with a less dense population experience lower demand and bottlenecks on supply, meaning that rents are more affordable and the availability of property is better.

So, what’s the solution then? Could it be bigger business getting involved in the Private Rented Sector to add more stock?
It has been a common theme of a lot of the government white papers and proposals around the UK rental market, that they’d like to see it ‘professionalised’, and more regulated in order to cut out shady practices and substandard housing.

Renting in the UK

According to a report for This is Money, “one of the UK’s largest corporate investors into British homes, Legal & General, estimated the build to rent sector was worth £10billion in 2019 and claims it is set to grow by a further £200million.

This week, L&G launched a dedicated business focused on delivering 1,000 new homes for rent in suburban locations across the UK.

It is just the latest in a string of this type of announcement, illustrating companies’ convictions that tenant demand for purpose built rental accommodation is strong and will continue to grow.

But is build to rent the future of British renting and a game changer for those invested in traditional buy-to-rent?”
Ultimately, the consensus seems to be that a greater supply of rental properties to the market managed by professional businesses would be a positive thing for the rental sector.

Big business consensus

It’s hard to disagree with that assessment, and of course with the introduction of more legislation for private landlords, examples of rogue landlords are greatly reduced. As a business we stringently vet the landlords we work with, and know that the industry is seeing much less of shady practices.

If moving home is something that you’re considering then why not get in touch with one of our specialists today to run through what you’re looking for and we can help you find your ideal property in the area you’d like.

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