In 1996, the year buy-to-let was born, there were 2.4 million households in the PRS - 18 years later this has more than doubled to 4.9 million. At the same time the sector has seen the fastest rate of improvement in the quality of accommodation of all three major tenures, and tenant satisfaction in the PRS now exceeds those in the social rented sector.
The profile of tenants living in the PRS has also changed since 1996, with more families living in private rented homes. In 1996, 13% of tenants living in the PRS were families - this has now increased to 20%.
ARLA and a small select panel of lenders including Paragon Mortgages, were instrumental in recognising the growing demand from private landlords for specifically tailored mortgage finance to help meet the rapidly growing demand for private rented property.
John Heron, Managing Director of Paragon Mortgages, said:
“The buy-to-let market has been a force for good for the wider UK housing market. Before the development of buy-to-let landlords had few options when considering how best to finance a rented property. The finance that was available was expensive and poorly matched to the customer’s needs. It was particularly difficult for new landlords to start to build a portfolio.
“Buy-to-let has changed all this. It enabled landlords to access finance that was better designed to meet the specific needs of the rental market at much more competitive interest rates and thus helped expand quality and choice in the PRS.
“Whilst most people continue to aspire to home-ownership, and the mortgage industry plays a critical role in facilitating this, for many the PRS remains a housing choice out of both convenience and need. Mortgage lenders can and do work alongside landlords and the letting agency industry to make sure that renting privately provides safe, efficient and flexible housing for those that rely upon the sector for a home.”
Valerie Bannister, President of the Association of Residential Letting Agents, said:
“With the deregulation of the industry through the 1988 Housing Act, combined with the introduction of a suitable financing model through buy-to-let, the private rental sector has grown substantially since the 1990s.
“It’s now a thriving force in our housing market that’s growing year on year. Without a vibrant buy-to-let market, landlords couldn’t provide the much needed, good quality and affordable accommodation for tenants that they do.”
