economy GVA landlords

Huge contribution landlords make to UK economy revealed

Removing landlords from the housing market would deprive the UK economy of around £45bn per year, says a new report looking at the importance of the private rented sector. 

Small and medium-sized landlords that own 15 rental properties or less make a significant contribution to the country’s gross value add, according to a new report produced by PwC, Paragon Bank and the National Residential Landlords Association (NRLA).

It looked at this particular landlord type (small and medium) because they own around 80% of all the privately rented properties in England and Wales, which amounts to around 3.8 million homes out of the total 4.8 million within the sector as a whole.

These landlords also support more than 390,000 jobs directly and in the wider economy, which includes 129,000 directly supported jobs and 260,000 jobs supported by the sector’s supply chain and through additional spending generated by the sector.

The benefits of landlords on the economy

Real estate, construction, building maintenance and landscaping are the main sectors with jobs linked to the private rented sector, says the report, which also points out that if the private rented sector was just 10% smaller, £4.5bn and 39,000 jobs would need to be provided alternatively.

At the same time, if the rental market were to expand by 10%, this could bring an estimated £4.5bn of additional GVA and create 39,000 more jobs linked to the sector.

The report set out a list of main benefits that can come from buy-to-let landlords and the private rented sector:

  1. Direct benefits: Captures the value and jobs that are created directly when landlords provide housing services. This captures the value that tenants receive in terms of shelter and household amenities in exchange for rent, and it relates to jobs such as own-management of rental portfolios.
  2. Supply chain benefits: Captures the value added down the supply chain, which is generated by demand from landlords as they spend on letting agents, plumbers, etc, to provide housing services. These are also known as indirect benefits.
  3. Spending benefits: By supporting employment in the economy (both directly and indirectly through supply chains), the sector helps support incomes. Workers spend this income, supporting further economic activity across the wider economy. These spending effects are also known as induced benefits.

“Pivotal role”

The total GVA generated by the UK private rented sector – £45bn – is roughly the same size as the total GVA of Kent, says the report. As Ben Beadle, chief executive at the NRLA, points out, the results demonstrate how the rental market plays a “pivotal role” in not only providing homes, but high-quality employment, too.

“These findings also underline how further growth could help the PRS to underpin a significant number of additional jobs over the coming years,” he added.

“We hope that this report provides a platform for further discussion about what steps can be taken to make this happen.”
Also commenting on the report, Richard Rowntree, managing director at Paragon Bank which also contributed, said: “Landlords make a significant contribution to the economy and job creation directly, as this report highlights, but also through facilitating labour mobility.”The PRS has the highest proportion of tenants in employment compared to other tenures and provides economic fluidity, enabling the workforce and companies to quickly adapt to changes in demand.”

James Bailey, UK housing leader at PwC UK, added: “The scale of this footprint demonstrates the significance of the sector in the economy as a whole.”

To read the full report, titled Economic Contribution of the Private Rented Sector, follow this link.

If you want to keep up to date with the latest news and changes in the UK property and rental market, see our property news page

Self-certified Sophisticated Investor

Please read

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of non-mainstream pooled investments. I understand that this means:

I am a self-certified sophisticated investor because at least one of the following applies:

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me seek advice from someone who specialises in advising on non-mainstream pooled investments.

High Net Worth Investor

Please read

I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-mainstream pooled investments. The exemption relates to certified high net worth investors and I declare that I qualify as such because at least one of the following applies to me:

aerial-view-uk-houses

STAY AHEAD OF THE MARKET

Sign-up for first access to new developments and exclusive property investment opportunities.

We send limited and targeted emails on new launches and exclusive deals which best fit your areas. We are trusted by over 30,000 active buyers as their source for new stock.

  • New property developments
  • Professional market reports
  • Property deal alerts
  • Development updates
UK holiday let

FIRST FOR NEWS AND KNOWLEDGE.

Receive trending news straight to your inbox and stay up to date on all of the property market trends and advice.

Established since 2005 we are a leading voice of authority and commentary on the UK property market. Our news is trusted by Apple News & Google News.

  • UK housing market
  • Mortgage & money
  • Buy-to-let landlords
  • Guides & advice

Talk to us

Speak to our UK property experts today:

 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

 

+852 6699 9008

Open from 9am-6pm HKT