New research conducted by the property lending experts, Octane Capital, claims that over the last five years the buy-to-let sector has increased by around £239 billion.
By analysing the level of privately rented stock across all UK regions the lending experts were able to obtain the worth of the buy-to-let sector. This was then compared to values during 2017 to uncover changes over the past five years.
Current buy to let market value
The findings show that based on current market values within the UK rental sector, the current value of the UK’s buy-to-let stock is £1.7 trillion.
The capital of England makes up 19% of the UK buy-to-let properties as this has the highest total worth of the UK buy-to-let sector. It is estimated that around 1 million private rented homes are in London and these are worth more than £500 billion.
The second most valuable buy-to-let market is in the South East of England as the buy-to-let market has a value of £247 billion. This is then followed by the East of England which has a value of £168 billion, the South West is valued at £156 billion, and the North West is valued around £110 billion.
The property lending experts estimate that the UK’s buy-to-let market has increased by 16.8%. This means it has climbed by £239 billion since 2017.
Buy to let market uplift
The figures show that London had the largest uplift in buy-to-let market value as it jumped by £57 billion. The South West increased by £34 billion and the East of England jumped £27 billion.
While the level of privately rented homes has remained low across the UK over the last five years, the total value of the buy-to-let sector has risen sharply because of house price growth.
Chief executive officer of Octane Capital, Jonathan Samuels, concludes: “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.”