Private rented sector essential to jobs across the UK

A new report has revealed small and medium landlords in the private rented sector (PRS) support over 390,000 jobs, both directly and in the wider economy.

The research, by the National Residential Landlords Association and Paragon, produced by PwC, also shows how the PRS in England and Wales makes a gross value added (GVA) contribution of £45bn to the UK economy.

The report’s conclusions indicate that the PRS across the two countries supports over 390,000 jobs throughout the sector’s supply chain and the wider economy – a figure that underlines the social as well as economic importance of the market.

The research examines annual revenue for small and medium-sized landlords using regional data on the overall size of the PRS, as well as estimated revenue per rental property.

The analysis of various scenarios reveals the likely scale of the impact of a contraction in the size of the PRS on landlords, tenants, and those whose jobs depend on a flourishing PRS sector.

According to the report’s findings, a 10 per cent reduction in the size of the sector could deprive the UK economy of £4.5bn of GVA.

Moreover, a market contraction on this scale would mean that 39,000 jobs would need to be supported by alternative sources in order to prevent a rise in unemployment.

By contrast, should the sector grow by 10 per cent it is estimated that the GVA supported by the PRS could increase by £4.5bn, while those whose employment is supported by the PRS would also rise by approximately 39,000.

This report underlines how crucial it is that, at a time of chronic supply issues across the PRS, all stakeholder groups take into account the sector’s wider importance to landlords and tenants.

Ben Beadle, chief executive at the NRLA, says: “What this report makes clear is how the private rented sector plays a pivotal role in providing high-quality employment, as well as desperately needed private rented accommodation, across the UK.

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

“We hope that this report provides a platform for further discussion about what steps can be taken to make this happen.” 

Paragon Bank managing director of mortgages Richard Rowntree adds: “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.”