Buy-to-let Britain: renting has doubled since 2000

In London the proportion of households renting privately has more than doubled from below 10pc in 2001 to over 20pc in 2011, the latest date for which data is presented. In the three years since the proportion will have grown further thanks to the capital's explosive price rises.

The increase in private renting appears to have accelerated since the onset of the financial crisis in 2008 (see graph, below). Knight Frank attributes this to "clampdown in mortgage lending" but also to "a mix of the scrapping of rent controls, the proliferation of buy-to-let mortgages and rising prices in relation to earnings."

Knight Frank added: "Those with high levels of equity or cash were much less affected by the credit crunch and as such were in a position to invest in rental property, underlining the role that equity has played in the expansion of the sector."

There is also evidence of a stark decline in renting from local authorities (green line) as housing stock controlled by councils continued to dwindle.

Elsewhere in the report, which focused on the major urban centres of Leeds, Bristol, Birmingham, Glasgow, Manchester and London, Knight Frank analysed total returns to landlords, which it put - in the first of what it says will become an ongoing index - at an average 11.3pc for the year ending December 2013.

This was based on flats within blocks, and comprised both rental returns and an increase in value.

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