Landlords, often the unsung heroes of the UK economy, are frequently misunderstood, underestimated, and under-appreciated. Despite their significant role, they remain largely unloved and unrecognised.
In England alone, one in five households reside in the private rented sector, making landlords the second biggest housing provider in the UK. Moreover, they are a substantial contributor to the public purse, the labour market, and the broader economy.
A recent study conducted by PwC, commissioned by us and the NRLA, delved into the economic contribution of small-to-medium sized landlords, those owning up to 15 properties. The findings were astounding. These landlords contribute an estimated £45 billion per year to the UK economy, roughly equivalent to the economic contribution of Kent, and double the gross value added of the advertising and marketing sector.
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Moreover, these landlords support approximately 390,000 jobs directly or indirectly, through the supply chain serving the sector, such as managing agents and maintenance workers.
However, despite their economic importance, progressive policies, both regulatory and fiscal, to encourage investment into the private rented sector (PRS) are lacking. The introduction of the Renters Reform Bill and the removal of mortgage interest relief, coupled with a 3% Stamp Duty surcharge, has slowed new investment.
A 10% reduction in the size of the PRS could deprive the UK economy of £4.5bn of gross value added and risk 39,000 jobs. Furthermore, it would mean fewer homes to rent, a concerning prospect considering the estimated 10% population growth over the next decade.
In contrast, an expansion of the sector, supported by policies encouraging increased housing supply, would result in a stronger economy, more jobs, and additional homes to rent. It's high time we stop demonising landlords and start recognising their importance, implementing policies that encourage sector growth.
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