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PRS market value climbs 30% to an estimated £1.5trn

PRS market value climbs 30% to an estimated £1.5trn

Research by debt advisory specialists Sirius Property Finance has shown that it’s not just the housing market that has benefited from the pandemic property market boom, with the estimated total value of the private rental sector (PRS) climbing by 30% since 2019. Sirius Property Finance analysed the current state of

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BDC 318 : Jul 2024

sirius property finance

PRS market value climbs 30% to an estimated £1.5trn

PRS market value climbs 30% to an estimated £1.5trn

Research by debt advisory specialists Sirius Property Finance has shown that it’s not just the housing market that has benefited from the pandemic property market boom, with the estimated total value of the private rental sector (PRS) climbing by 30% since 2019. Sirius Property Finance analysed the current state of the PRS, looking at the level of stock, the current market value of this stock, the average yield available and how this has changed since 2019.  The latest figures show that, despite the government’s best efforts, the overall size of the PRS has grown by 2.4% across England since 2019, with 4.876m properties helping to house the nation’s tenants.  The South East has driven this growth with a 9.1% increase, along with the South West (+7.4%) and the North West (+3.8%). However, the East Midlands (-9.9%), Yorkshire and the Humber (-0.4%) and East of England (-0.3%) have all seen a decline in PRS stock when compared to the pre-pandemic market.  What’s more, the analysis by Sirius Property Finance shows that the current total value of PRS stock is estimated to sit at a staggering £1.536 trillion across England, having seen a 30% increase since 2019 alone.  At an estimated £575.7bn, London remains home to by far the most valuable PRS where total stock value is concerned. However, when compared to the pre-pandemic market, the capital has seen the smallest increase in this total value at 16%.  The South West has driven PRS market performance in terms of the increase in total value, up 41% when compared to 2019. The total value of PRS stock has also increased by more than 30% across the North West (+39%), South East (+37%) and West Midlands (+31%). Finally, the analysis by Sirius Property Finance shows that of the 4.876m rental homes across England, just 130,272 are currently listed online as available to rent, equating to just 2.7% of all PRS stock, highlighting the pivotal role the sector plays in today’s society. Managing Director of Sirius Property Finance, Nicholas Christofi, commented:  “Despite the government’s sustained attempts to dampen the enthusiasm of buy-to-let investors, the private rental sector has continued to grow in size over the last few years.  This growth, combined with the high rates of house price appreciation seen throughout the pandemic, have pushed the total value of the sector to a quite remarkable level.  However, previous whisperings of a hike in capital gains tax will remain a worry for those who have benefited from an increase in the value of their buy-to-let portfolio. Should these changes come to fruition in the future, we may well see many landlords scramble for the exit to avoid the government’s latest cash grab.”View full data tables online here.

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Brownfield regeneration sorely needed as vacant land plots account for just 1.4% of residential listings

Real estate debt advisory specialists, Sirius Property Finance, has revealed that land plots account for just 1.4% of current for sale stock listed on the market and demand is high, with 55% of these already being snapped up by developers. As part of the most recent Budget statement, Chancellor Rishi Sunak announced £1.8 billion of government money to help fund the regeneration of brownfield land up and down the country as part of a mission to satisfy the ever-intensifying need for new homes. The research by Sirius Property Finance shows that the need for these additional land plots is clear, as current levels account for a very small proportion of overall residential sales listings. The research shows that across Britain there are some 677,533 residential property opportunities listed on the current market, with just shy of 10,000 of these coming in the form of land plots available for development – just 1.4% of the total market. What’s more, 55% of these plots have already gone under offer or sold subject to contract. Swansea is home to the highest level of land plot availability, accounting for 1.9% of current residential listings. Aberdeen (1%) and Bradford (1%) are the only other major cities where land plots account for at least one per cent of the current market. While land plot availability may be scarce, demand is high. In Bournemouth, 77% of all land plots listed on the market have already been marked as under offer or sold subject to contract, while Bristol (68%), Newcastle (67%), Cardiff (60%), Edinburgh (57%) and Nottingham (57%), are also home to above average levels of demand. Managing Director of Sirius Property Finance, Nicholas Christofi, commented: “Land plots currently account for a minute proportion of available property purchasing opportunities but the appetite for these plots is clear, with more than half of those listed already being snapped up across the nation. We need more homes and we need them quickly. Opening up the nation’s brownfield is just one step in addressing this shortage and while it will utilise land that has otherwise been overlooked for quite some time, it certainly won’t solve the problem in its entirety.” Table shows the availability of land plots as a percentage of all for sale stock in each area, as well as demand based on the percentage of land plots that are already sold subject to contract or under offer Location Land Plot Availability Land Plot Buyer Demand Swansea 1.9% 30.0% Aberdeen 1.0% 14.3% Bradford 1.0% 41.7% Nottingham 0.9% 56.9% Glasgow 0.7% 46.7% Plymouth 0.6% 52.6% Liverpool 0.5% 37.5% Sheffield 0.5% 40.9% Cardiff 0.4% 60.0% Sunderland 0.4% 33.3% Bristol 0.4% 67.9% Southampton 0.4% 41.7% Bournemouth 0.4% 76.9% Cambridge 0.3% 25.0% Leeds 0.3% 50.0% Oxford 0.3% 50.0% Newcastle 0.3% 66.7% Edinburgh 0.2% 57.1% Leicester 0.2% 37.5% Birmingham 0.2% 53.3% Manchester 0.2% 50.0% London 0.1% 34.0% Portsmouth 0.0% 0.0% Great Britain 1.4% 55.2% Source – Rightmove      

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