Franchise firm Martin & Co has forecast that the private rented sector will continue to grow over the next 30 years, with eventually 30% of households renting from a private landlord.

The forecast emerged in a breakfast briefing yesterday, held to mark the 30 years since Martin & Co let its first property.

CEO Ian Wilson said that forthcoming changes on tax and Stamp Duty Land Tax changes will not stop landlords making profits.

He said that the staged reduction in mortgage tax relief on buy-to-let mortgages will leave many landlords unaffected.

He said: “A current income after tax of £1,789 per annum would fall to £894 if rents remain unchanged.

“However, a 5% per annum increase in rents would take income (after tax) to £1,858 per annum in 2020.”

On the more imminent Stamp Duty surcharge, he said it was possible that landlords would pull out of the market, leading to lower rental stock levels.

However, this would push up rents, making monthly yield figures more attracting to existing landlords while encouraging investors to return to the market.

Michael Stoop, managing director of Martin & Co, also predicted that the market would adapt to provide for the increase in larger families renting homes.

He said investors would diversify their portfolios by buying larger properties in less affluent areas – for example, three and four-bedroom homes with gardens.

The firm told journalists at yesterday’s briefing that as a group, it manages 45,000 tenanted properties, equivalent to the size of Winchester.

The group has almost 300 offices trading under five different brands.