Some of the biggest names in the trade, lending and advisory sectors have produced a report outlining the vast significance that private renting has for the UK economy.
The report says small and medium-sized private landlords - with 15 or fewer properties - support over 390,000 jobs, both directly and in the wider economy.
The research - from the National Residential Landlords Association, Paragon Bank and the PwC business consultancy - also shows how the private rental sector in England and Wales makes a gross value added (GVA) contribution of £45 billion to the UK economy.
The report’s conclusions indicate that the private rental sector across the two countries supports over 390,000 jobs throughout the sector’s supply chain and the wider economy – a figure which underlines the social as well as economic importance of the market.
The research, carried out by PwC, examines annual revenue for small and medium sized landlords using regional data on the overall size of the private rental sector, as well as estimated revenue per rental property.
The analysis of various scenarios reveals the likely scale of the impact of a contraction in the size of the private rented sector on landlords, tenants, and those whose jobs depend on a flourishing private rented sector.
According to the report’s findings, a 10% reduction in the size of the sector could deprive the UK economy of £4.5 billion of GVA. Moreover, a market contraction on this scale would mean that 39,000 jobs would need to be supported by alternative sources in order to prevent a rise in unemployment.
By contrast, should the sector grow by 10% it is estimated that the GVA supported by the private rental market could increase by £4.5 billion, whilst those whose employment is supported by the PRS would also rise by approximately 39,000.
A statement from the NRLA says that this report underlines how crucial it is that, at a time of chronic supply issues across the private rented sector, all stakeholder groups take into account the sector’s wider importance to landlords and tenants.
Responding to the conclusions, Ben Beadle - chief executive at the NRLA - says: “What this report makes clear is how the private rented sector plays a pivotal role in providing high-quality employment, as well as desperately needed private rented accommodation, across the UK. These findings also underline how further growth could help the PRS to underpin a significant number of additional jobs over the coming years.
“We hope that this report provides a platform for further discussion about what steps can be taken to make this happen.”
And Paragon Bank managing director of Mortgages Richard Rowntree - a regular contributor to Landlord Today - adds: “Landlords make a significant contribution to the economy and job creation directly, as this report highlights, but also through facilitating labour mobility. The PRS has the highest proportion of tenants in employment compared to other tenures and provides economic fluidity, enabling the workforce and companies to quickly adapt to changes in demand.”
Finally James Bailey, UK housing leader at PwC UK, notes: “Around 80% of the estimated 4.8 million properties in the private rented sector in England and Wales are provided by landlords with fewer than 15 properties. We estimate that this segment of the market contributes £45 billion of value to the wider economy each year. The scale of this footprint demonstrates the significance of the sector in the economy as a whole.”
Click here to access the report’s full conclusions and data.
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In view of the importance of the private rental sector, why are landlords , purchasing properties for permanent tenants to rent, classified, for tax purposes, at the same rate as someone purchasing a ‘second home’ for themselves or holiday lets? It seems illogical and unfair to me.
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