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Written by Conor Shilling

The UK’s Private Rented Sector (PRS) needs £1.4 trillion of investment in the next twenty years to meet demand, a specialist buy-to-let lender has forecasted. 
 
Landbay says its projection is based on the assumption that the rental sector will grow at the average yearly rate of 4.4% with house prices remaining broadly static. 
 
If house prices do grow at their average rate since 1990 (+5.1% per annum) the sector would require investment of £4.0 trillion by 2035, says Landbay.
 
The firm highlights that London and the South East account for a significant share of total cumulative investment needed, with £455 billion of investment by 2035 essential to maintaining the region’s rental sector. 
 
John Goodall, co-founder and CEO of Landbay, commented: “The UK’s housing stock is under significant pressure because not enough new houses are being built, the population is growing and people increasingly prefer to live in smaller, high quality dwellings. The scale of the investment needed to ensure the sufficient supply of high quality properties means that multiple solutions are needed – from build-to-let by pension funds, the government’s own ‘Build to Rent’ scheme, further housing debt guarantees from the UK government, through to continued investment by private landlords themselves and an active and vocal private rented sector taskforce.”
 
“We are gradually moving towards a more European model of housing – where home ownership sits comfortably alongside an equally aspirational population of tenants. In countries such as Germany, where more than half the population live in private rented accommodation, this has been entirely consistent with improving living standards,” he added.
 

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