The future for UK residential investment performance
August 31, 2012
This article, by Neil Young, first appeared on the Money Observer Website
Investment returns from the UK’s private rented sector are inherently driven by supply and demand within the rental market. We’re seeing ever-increasing numbers unable or unwilling to get on the housing ladder who turn to the rental market, coupled with the continuing undersupply of housing stock, particularly in London and the South East.
It’s a story that we will all be familiar with and has resulted in the private rented sector swelling to account for 17 per cent of the UK’s homes (3.62 million households), and up to 24 per cent of property in the capital.
The role of the private rented sector in delivering a housing solution has never been more important. We’re at a time when population growth, the growth of single-person households and a population demographic that is marrying later and living longer are all acting to put additional pressure on our housing stock and the private rental market.
Certainly there will be a time when affordability issues come to the fore and we’re already seeing that the pace of year-on-year rent increases is tempering. But, as an asset class, the private rented sector continues to perform well. Investment performance in the sector is well documented by IPD with long-term performance data showing the sector strongly outperforming other investment classes…
To read Neil’s full article visit the Money Observer website