Total rent collected by private sector at record high

The level of rent collected by private landlords in the UK has hit a record high, according to research.

It found tenants paid landlords £51.6 billion in 2017, which is more than double the £22.6 billion paid out in 2007. This figure compared with £49.7 billion in 2006.

The study indicated that this cost had been paid mostly by millennials – those born between 1977 and 1995. They accounted for £30 billion of this revenue, or 59 per cent.

However, this figure has actually fallen, having climbed as high as 64 per cent in 2015. That may suggest that while the overall amount being paid has risen – with inflation being one contributory factor – the base of renters has broadened more. Indeed, measures like help-to-buy will have enabled at least some millennials to get out of rental accommodation and into owner-occupancy.

Indeed, while the HomeLet retail index for January indicated that rents were 2.4 per cent up year-on-year, the total number renting has also increased.

Summing up the situation, research director Jonny Morris said: “The rental market grew in 2017. More people joined the rented sector and average rents increased, meaning 2017 saw the highest total rent bill so far.”

The contribution made by older people should not be underestimated. Baby boomers may be mainly owner-occupiers, but those born between 1946 and 1964 still pay around £5.5 billion in rent a year, or ten per cent of the total. Indeed, this group tends to rent larger and more expensive properties.

While the amount of rent paid was up overall along with the average cost, the survey confirmed the kind of regional variations found in other studies. The East Midlands is clearly a hotspot, with average rents up by six per cent, while London and the south east only saw 0.5 per cent increases. Rents in the north west and north east actually fell.

So while the overall picture is pointing upwards, landlords should note it is nether evenly nor universally so, while their target market may be more diverse than the ‘generation rent’ headlines would suggest.