New Research Highlights Landlords' Integral Contribution to the UK Economy

Ross McColl
4 min read
May 15, 2024
Updated: May 15, 2024

In recent years, the significance of the private rental sector (PRS) to the UK economy has become increasingly apparent. A collaborative report released by the National Residential Landlords Association, Paragon Bank, and PwC highlights the critical contributions made by small to medium-sized landlords in bolstering the national economy. This in-depth analysis sheds light on the myriad ways in which these landlords not only contribute to economic output but also support countless jobs and provide essential housing solutions during pressing times.

The research conducted by PwC meticulously gathered and analyzed data pertaining to the annual revenues of small to medium landlords. Utilizing regional statistics regarding the overall magnitude of the PRS and the estimated earnings per rental property, the study provided a comprehensive overview of the sector's economic footprint. The findings pointed to a substantial ripple effect—a contraction in the sector could have dire consequences for landlords, tenants, and the numerous individuals whose employment depends on the vitality of the PRS.

As of now, the data reveals that the private rental sector in England and Wales contributes a staggering £45 million in Gross Value Added (GVA) to the UK economy annually. This sector is not only a cornerstone of the housing market but also a substantial economic engine, supporting approximately 390,000 jobs. These include direct employment opportunities within the sector, jobs in dependent supply chains, and other roles that benefit indirectly through the economic activity generated by the PRS. 

The implications of a potential 10% reduction in the sector are particularly concerning. Such a decrease would necessitate the reallocation of roughly 39,000 jobs to other sectors to prevent an uptick in unemployment rates. Moreover, this contraction could result in a loss of £4.5 billion in GVA, underscoring the sector's significant impact on the national economy. The robustness of the private rental market is thus crucial not only for housing stability but also for the economic health of the nation.

Richard Rowntree, Managing Director at Paragon Bank, emphasized the economic dynamism of the PRS, stating, “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.” This flexibility is essential for the agility of the UK economy, allowing it to respond swiftly to shifts in the economic landscape and ensuring a resilient employment market.

Moreover, the report clarifies the essential role that landlords play in providing high-quality employment and housing. In times of economic uncertainty or housing shortages, the PRS offers much-needed stability and accommodation options. With the appropriate support and recognition, this sector can continue to grow, potentially providing a significant boost to the economy through new job creation and increased economic activity.

In recognition of these contributions, Link Property is actively engaging with landlords to foster a deeper understanding of the benefits associated with the PRS. We offer landlords a unique opportunity to impact the social housing crisis positively. By choosing an alternative to traditional letting, landlords can enjoy a hassle-free experience while ensuring a steady rental income. This approach not only benefits landlords financially but also contributes to alleviating housing pressures in more vulnerable communities.

At Link Property, we encourage landlords to consider the broader impact of their investment choices. By participating in programs that offer guaranteed rent, landlords can secure their income streams and contribute to a more stable and dynamic housing market. Such initiatives are vital for sustaining the PRS's role as a pillar of economic and social stability in the UK.

We invite all interested landlords to contact us to explore how they can benefit from guaranteed rent schemes. These programs are designed to maximize the positive impacts landlords can have on both the economy and the community, providing a win-win solution for economic growth and social welfare.

In conclusion, the recent report from the National Residential Landlords Association, Paragon Bank, and PwC is a clarion call to recognize and support the invaluable role that the private rental sector plays in the UK economy. By fostering a healthy and vibrant PRS, we can ensure continued economic resilience and growth, substantial job creation, and the provision of essential housing needs. For landlords, engaging with forward-thinking programs like those offered by Link Property can amplify their impact, helping to shape a more robust and equitable housing market for the future.