Buy-to-let lender Landbay said this level of investment would be required even if house prices stay the same.

The rental market has grown at around 4.4% each year since 1991 and if this trend continues £1.4trn will be required before 2035. If house prices continue to rise at current rates that figure could balloon to over £4trn.

The firm expects the private rented sector to grow to over 13 million properties in the next two decades. London and South East alone will require £4bn billion in fresh investment during this period.

Landbay’s report said the UK’s ageing population and a deficit of new homes being built was likely to increase demand in the rental sector.

John Goodall, co-founder and CEO of Landbay, said: “A substantial amount of new investment is needed to provide homes that will be needed over the next two decades, particularly if those homes are to be high quality homes that people want to live in.

“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.”