In the last 12 months average rents have increased by 3% across the UK, although figures vary between regions.
Scotland saw the biggest rent rises with the typical property bringing in monthly rental income of £631 during the first quarter of 2014. This represents an 8.8% rise on the same period last year where the typical rent was £580.
London saw the next biggest increases with the rents in the central part of the capital rising 5.1% year-on-year to reach £2,509. In outer boroughs the average rent grew 4.4% in the same period, reaching an average of £1,156.
Rent growth has also spread to northern areas with rents in the North of England rising 1.8% to hit £614 during the last 12 months.
Countrywide found the vast majority of the UK’s private rented housing stock to be owned by landlords with a single property, despite significant institutional investment in the sector in recent years.
It said 93% of landlords have a single rental property and, in total, account for 81% of privately rented stock. This figure is similar in all areas of England, Scotland and Wales.
“Landlords with small portfolios play a hugely important role in the UK’s private rented sector,” said Nick Dunning, group commercial director at Countrywide.
“The doubling in size of the private rented sector between 2000 and 2013 was almost entirely driven by landlords either expanding their portfolios or buying investment property for the first time.”
Just 0.7% of landlords have portfolios of more than five properties, providing 6.7% of privately rented housing stock in the UK.
Prospects for landlords are expected to remain strong in the coming years, Countrywide said, with the effect of the government’s Build to Rent fund reaching the market. The scheme, first announced in the 2013 Budget is expected to add more than 6,500 new rental properties to the market.
Countrywide said additional government investment could see the size of portfolios expanding plus new innovation across the market.
“The number of privately rented households is projected to continue growing as the number of homeowners and social renters continues to shrink,” Dunning added.
“Would-be homeowners are buying later in life and households, which in the past might have been housed in the social rented sector, now live in private rented accommodation. Build to Rent schemes will undoubtedly play an increasing role in meeting some of this new demand. However, while government backing for institutional investment in the private rented sector will increase the number of landlords with large portfolios, for the foreseeable future the UK will remain a nation of landlords with small portfolios.”
