A reader of Industry Views is unlikely to need converting to the virtues of buy to let, but anyone involved in the business of letting out a property for investment purposes may be forgiven to having been a little quiet lately.
The reasons for being downcast are numerous and well-documented in my stories on Letting Agent Today – I’m talking Right To Rent, landlord licensing by councils, the removal of tax breaks, the likelihood of mortgage constraints, and the general demotion of landlords and the supporters of private renting from hero to zero in the past year or two.
How much more pain must a sector of Britain’s under-supplied housing market take?
But now there are three reasons to feel more confident, to have a spring in your step – you do, after all, have a promising future. Why? Well it’s all down to demographics.
As I write this the Office for National Statistics is holding a press conference and is inadvertently making the case for a healthy, growing and (whisper it quietly) respected private rental sector.
For the ONS forecast is that the UK population is to increase beyond 70 million in the next 12 years – an increase in population equivalent to the size of the entire Republic of Ireland.
Around two thirds of this growth is down directly and indirectly to inward migration (directly in the shape of those coming from other countries to the UK, and indirectly in terms of the children they in turn will have – who will of course be British).
The other third of the growth is down to an expanding birthrate and, more significantly, an ageing population.
By 2039 the ONS tells us that 29.5 per cent of people in the UK will be aged over 60 – up from 23.2 per cent this year.
Perhaps even more food for thought comes from the fact that one in 12 people by 2039 will be aged over 80.
So why is this heartening for landlords or others involved in buy to let? As I say, there are three reasons.
Firstly, the experience of recent years suggests that a migrant population tends to rent, at least at first, so expect a boom in the rental sector in or near major points of entry and the usual significant employment areas.
Secondly, recent research from Countrywide, Savills and others suggests that the renting population is in any case becoming increasing diverse – not just singletons in their 20s, but increasingly older singletons in their 40s or 50s, too, as well as a larger proportion of couple and families.
Thirdly—and as I’ve explored before – the swelling population of the UK will easily outpace the supply of purpose-built institutionally-funded homes, thus confirming that there is room for Build To Let without damaging Buy To Let. They can operate side-by-side.
Add those factors together and the truth that we know today – that the private rental sector offers a valuable public service – should become even more apparent as the UK becomes more densely populated at a speed that no new house-building programme can match.
That means that buy to let is here to stay: and those involved in providing such a valuable service should hold their heads up high.
*Editor of Estate Agent Today and Letting Agent Today, Graham can be found tweeting all things property @PropertyJourn