Landlords In The UK Benefit From Increasing House Prices

The total value of rental properties has gone above the £1 trillion level with a rise of 57% being seen in the above period. Just in the last year, the total value of properties being rented out has risen by 17%.

This has produced an estimated profit of £177 billion in that 5-year period for landlords purely due to capital growth. Then, on top of that figure, landlords may have made further profits on rental income.

It is believed that this increase in values is due to two factors: –

1. Rising house prices.

It is estimated that the value of all UK homes now stands at £5.75 trillion. In the last 5 years, property values have risen by £966 billion. It probably does not come as a surprise to read that it is London and the South East that has witnessed the biggest increase in values. Of the £5.75 trillion mentioned above, in excess of £2.5 trillion is in these two locations. The average value of a home in London is now £428,988 and in the South East £282,168. The only places not to witness growth in residential property values in the last 5 years are in Northern Ireland, North East and the North West.

2. An increase in the numbers of private rental properties

You may be surprised to read that, since 2009, the number of homes rented out privately has risen by getting on for 1.2 million to 5.4 million. This is a significant increase by any standard.

With an increase in properties being rented out, we have seen a lot more people become landlords whether that is to rent out just one property or build up a portfolio of properties. It is perhaps just as well this has happened as we have seen an increasing number of people being unable to afford to enter the first time buyers market to buy their own home and have to revert to entering the private housing rental market.

It will be interesting to review the above in another 5 years time to see if private landlords have continued to benefit from rising house prices.

Here at AIB Insurance we are able to obtain competitive quotes for Landlord Insurance so why not give us a call on 02380 268 351 and speak with a member of our experienced team.