The UK’s rental market is now the world’s fourth largest by total volumes of privately rented properties according to research from a lender.

Octane Capital says only the United States, Germany and Japan have more privately rented homes.

Octane analysed the size of the private rental market across OECD nations based on the total number of dwellings, the proportion of these attributed to private rentals and what this equates to in terms of the total number of rental homes in each market. 

Across the UK there are estimated to be over 29.5m homes within the current property market – of those, it claims 8.7m are now privately rented. 

In the United States, out of 139.7m homes, some 47m are privately rented. With just shy of 20m privately rented homes, Germany ranks second, with Japan next at 8.7m in total. 

Octane Capital chief executive Jonathan Samuels says: “The buy to let sector is a serious business and privately rented properties not only account for a third of all homes across the nation, but they also provide a home for many, many more tenants, who have been priced out of homeownership due to high house prices. 

“We could see the UK start to catch the other frontrunners as long term renting becomes more prevalent as a lifestyle choice. 

“This is already a commonplace occurrence in nations such as Germany where nearly half of all homes are privately rented in order to satisfy this demand. Should we see a similar trend emerge in the UK, there’s no doubt that the buy to let sector will continue to swell in size.”

Cost of Living Crisis Makes Rental Protection Vital

A player in the rental insurance field is warning landlords that the growing cost of living crisis makes it more important than ever to take out rent protection cover.

Andy Halstead, chief executive of HomeLet and Let Alliance, says: “The cost of living crisis is likely to intensify as the months tick over, due to inflation and rising energy prices, making it more important than ever for landlords to consider rent protection products to ensure that they are sufficiently protected against the unpredictable nature of the current situation.” 

His remarks come after his HomeLet brand released its latest rental index, this time for February.

It shows that the average rent in the UK reached another record high of £1,069, up 0.5 per cent on the January 2022 figures. 

When London is excluded the average rent in the UK is now £902, up 0.6 per cent on January. 

Average rents in London saw a slight dip, down 0.2 per cent to an average of £1,757 pcm. 

The capital was one of just two regions to see a rent dip – the East Midlands was down 0.1 per cent to an average price of £745 pcm. 

Northern Ireland saw the largest month-on-month rise of 1.8 per cent to a new average high of £718 pcm. 

Halstead says: “The second month of 2022 followed largely similar trends to the first, with the average rental price across the UK continuing to rise month-on-month. 

“The housing supply required to meet the demand sadly isn’t there, so as far as we can tell, this is a trend that will continue to appear throughout 2022, barring an unexpected change. 

“It is interesting to see Greater London record a small dip after a sustained period of resurgence, albeit the dip is a relatively small one.”