At a time when rental demand is set to double over the next ten years, the private rented sector continues to fulfil an important function in the UK housing market, providing accommodation for those who choose to rent for flexibility or can’t afford to buy.
Richard Donnell, director of research at Hometrack, commented: “In reality, the private rented sector makes up only 8% or 9% of UK housing supply. There is a great demand for more private rented accommodation and the issue of supply needs to be addressed.”
While the consensus was that the 100% appreciation of the last 5-year period would not be repeated over the next 5 years, most panellists remained optimistic regarding the market outlook with supply-vs-demand being the key fundamental.
Seamus Nugent, group investor sales director of Dandara, commented: “The buy-to-let market is currently made up of serious long term investors, not speculators. Demand for properties has increased by 30% in the last two years whilst supply has dropped by 30%. The buy-to-let outlook has never been better.”
John Heron, managing director of Paragon Mortgages, added: “A really high tenant demand is driving the market. Private landlords provide accommodation for those needing affordable and flexible housing. Who else will supply homes to the students in debt, immigrants and those looking for flexibility.”
The basis for recent media assertions that properties are being left empty in new town centre developments as housebuilders sell a large proportion of units directly to speculative investors, who rely on capital growth, was questioned by the panel as being anecdotal but without foundation.
Seamus Nugent said: “Properties lying empty are the exception, not the rule. In a development in Manchester only four out of 1000 properties are empty. We simply aren’t seeing the ghost town city centres sometimes suggested.”
