With almost 400,000 UK jobs relying on the private rented sector it’s vital landlords get the support they need

New research shows smaller landlords in the UK’s private rented sector (PRS) contribute a huge £45 billion to the UK economy and are responsible for supporting 390,000 jobs. Here NRLA CEO Ben Beadle explains why it is vital the sector continues to grow.

Forty-five billion pounds. Almost 400,000 jobs. Let those figures sink in for a moment.

It’s easy to think that it’s simply landlords letting out homes – and the tenants they house – who are affected by movement in the rental market.

However, as figures from a new report show, the truth is much more complex than that.

From letting agents to tradespeople, mortgage brokers to builders, hundreds of thousands of families’ livelihoods rely on a thriving rented sector – which itself is responsible for pumping billions into the economy.

Therefore, the implications of any contraction in the number of homes to rent could have serious consequences on a macro and micro level.

The research report, commissioned by the NRLA and Paragon Bank and carried out by accountancy firm PwC, throws into stark relief the value of the sector in supporting the wider economy.

Supply crisis

The most recent data from property portal Rightmove shows there are now 11 tenants competing for each property advertised for rent.

Demand is only set to grow further, not least given forecasts of more students studying at universities and the difficulties many face affording a deposit for a home of their own.

Yet challenging economic conditions combined with the spectre of rental reform on the horizon, means many landlords are considering their future in the sector.

According to the report’s findings, a 10% reduction in the size of the PRS would not only make it even harder for tenants to find homes to rent, it also could deprive the UK economy of £4.5bn and put 39,000 jobs at risk.

This really brings home both the social and economic role of the sector and its landlords.

The implications of any contraction could be disastrous, yet it follows that if we can instead grow the sector to meet demand, we could offer the economy a much-needed shot in the arm, as well as boosting the number of jobs out there – surely a win/win for all involved.

More homes also make for a more mobile workforce and – as Richard Rowntree, Managing Director of Mortgages at Paragon Bank pointed out at the launch of this report – 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.

I now hope that this independent report can provide a springboard for further discussion with decision makers and others, about what steps can be taken to grow both the sector and the economy.    

More information

This report, entitled ‘Economic Contribution of the Private Rented Sector’ can be downloaded here.