Number in Private rental sector set to grow for rest of decade
- 17th July 2017
- Landlord Property News
Landlords seeking inflation-beating returns should continue to see property as good option
The future looks bright for the private rental sector – a recent report predicts a circa twenty five percent growth in the number of people renting early into the next decade. That’s a pretty steep increase – so let’s drill down into the variety of factors at play which support such a robust forecast.
One is that investors are searching for investments that can outpace inflation. Buy-to-let ticks that box, producing yields of 3.5% to 4% - comfortably outstripping inflation at 2.9%.
And while performance varies by location, recent research by MSCI found that capital growth in inner and outer London culminated in total returns of around 7% last year. Indeed, property has outperformed equities and bonds over the long-term as well as other categories of property. Given such performance, property looks set to remain a top asset choice for investors looking forward.
However, landlords also need to know that their rental prospects will remain good. They want to know that their properties will be tenanted by young professionals and families who will look after their properties, preferably for a few years, with a minimum of void periods.
Again, the outlook appears positive. Generation Rent increasingly enjoys the flexibility and labour mobility that renting offers them. They want high quality accommodation that they can call home, without being tied long-term to a mortgage.
Stephen Ludlow, Chairman at ludlowthompson, comments: “As demand from tenants looks set to continue to increase, and landlords continue to see bricks and mortar as a good investment, the rental market looks set to go from strength to strength.”
As demand from tenants looks set to continue to increase, and landlords continue to see bricks and mortar as a good investment