By New research has revealed that the UK’s buy-to-let sector has grown substantially in value over the last five years, increasing by almost £240bn.
Octane Capital analysed the level of privately rented stock across each region of the UK in relation to current market values to find the total worth of the buy-to-let sector.
They then compared this buy-to-let bricks and mortar value to 2017 to reveal how it had changed over the last five years.
Current buy-to-let market value
Their research shows that there are an estimated 5.5m private rental properties within the UK rental sector and based on current market values it is estimated that the total value of the nation’s buy-to-let stock is £1.7trn.
With just over one million private rental homes, the London market accounts for 19% of the UK’s total buy-to-let properties.
With the capital also home to the highest property values, it sits top where the total worth of the buy-to-let sector is concerned at over £500bn in value.
The South East is home to the next most valuable buy-to-let market at £247bn, with buy-to-let values also exceeding £100bn in the East of England (£168bn), South West (£156bn), the North West (£110bn) and the West Midlands (£104bn).
Largest uplift in buy-to-let market value
While the level of privately rented homes has remained largely flat across the UK over the last five years, the total value of the buy-to-let sector has seen a significant boost due to strong house price growth.
It is estimated that the UK’s buy-to-let market has climbed by £239bn since 2017, a 16.8% increase.
While London house price growth has lagged behind the rest of the UK, the capital has still enjoyed the largest uplift in buy-to-let market value with a £57bn jump, followed by the South West (£34bn) and the East of England (£27bn).
CEO of Specialist Property Lending Experts, Octane Capital, Jonathan Samuels, commented:
“The government has tried its hardest to dampen investment into the private rental sector in recent years, with a string of legislative changes around tax relief, stamp duty and tenant fees reducing the profitability of buy-to-let investments.
The pandemic has also proved problematic for some landlords who have suffered lengthy void periods due to factors such as the tenant eviction ban and a reduction in rental demand across our major cities, in particular.
Despite all of this, the sector has stood tall and continues to provide the vital rental market backbone that so many are reliant on.
At the same time, the nation’s landlords have benefited from a considerable level of capital appreciation on their buy-to-let investment and the value of the sector as a whole has increased substantially.
Let’s just hope that whisperings of a higher rate of capital gains tax remain just that, as any further increase could spur a reduction in available stock, causing the total value of the market to decline in the process.”
| Table shows the total value of the buy-to-let sector and change since 2017 based on the number of private rental properties and current market values – Sorted by highest current estimated value | |||||
| Location | Total private rental sector estimated stock (latest) | Current average house price | Current estimated value of B2L sector | Change in current estimated value of B2L sector (£) | Change in current estimated value of B2L sector (%) |
| London | 1,042,130 | £519,934 | £541,839,558,519 | £56,914,371,748 | 11.7% |
| South East | 670,121 | £369,093 | £247,336,845,531 | £15,833,094,340 | 6.8% |
| East of England | 497,156 | £336,937 | £167,510,132,782 | £27,446,223,067 | 19.6% |
| South West | 506,248 | £308,497 | £156,175,827,233 | £34,015,293,422 | 27.8% |
| North West | 556,005 | £197,797 | £109,976,097,716 | £17,207,632,758 | 18.5% |
| West Midlands | 450,746 | £230,888 | £104,071,725,925 | £23,520,442,269 | 29.2% |
| Yorkshire and the Humber | 482,360 | £191,036 | £92,148,092,701 | £18,766,926,342 | 25.6% |
| East Midlands | 390,747 | £229,277 | £89,589,386,301 | £18,490,170,321 | 26.0% |
| Scotland | 370,845 | £182,755 | £67,773,737,256 | £10,281,520,850 | 17.9% |
| Wales | 204,995 | £199,877 | £40,973,714,338 | £9,549,916,076 | 30.4% |
| North East | 203,163 | £149,249 | £30,321,963,529 | £3,538,958,900 | 13.2% |
| Northern Ireland | 113,989 | £159,109 | £18,136,718,151 | £3,796,852,989 | 26.5% |
| United Kingdom | 5,488,506 | £270,708 | £1,665,853,799,982 | £239,361,403,080 | 16.8% |
Data on total number of private rental properties sourced from Gov.uk – Live tables on dwellings stock (England), Gov.wales – Dwellings stock estimates (Wales), Gov.scot – Housing statistics: stock by tenure and Communities-ni-gov.uk – Housing statistics (Northern Ireland).
Average UK house price data sourced from Gov.uk – UK House Price Index (November 2021 – latest available)
Total estimated sector value based on the total number of dwellings multiplied by the current average house price, with five year change compared to the same totals in 2017. Total UK value is based on a sum of all regional values.
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