14:36 PM, 18th May 2012, About 9 years ago 1
The government is failing low income householders as buy to let rents rise, despite cutting housing benefits to try to stem the increases.
A private rental market analysis by a housing groups is warning the government that rents are unaffordable in some areas for poorer families – and propose building more homes and supporting landlords to invest as the solution.
The housing groups – National Housing Federation, Shelter and The Chartered Institute of Housing – is behind the government’s dual policy of encouraging build to let funded by institutional lenders while urging councils to tackle dangerous and poorly maintained homes.
The Housing Report has tracked rents since 2009 – while rents have gone up 3% from £133 per week to £137 per week, the cost is less than inflation of 4.5% recorded over the same period.
The report also notes average figures mask local rises – 6.8% in the case of London.
Kay Boycott, Shelter’s director of communications, policy and campaigns, said: “Every day Shelter sees families up and down the country whose lives are being torn apart by the shortage of affordable homes.
“This government has had two years to start delivering on housing, yet this report paints a pretty bleak picture of its current record on housing in all its forms.
“We must now see progress made on the commitments outlined in November’s Housing Strategy and bolder action taken to make sure families across the country can find a decent place to call home.”
Meanwhile, another report from property consultants Hamptons International also supports build to let initiatives for institutional investors.
The survey of leading banks and fund managers concluded low yields and too few quality homes to buy are the biggest barriers to institutional investors entering buy to let.
Fund managers perceive residential buy to let yields are an average 20% less than those offered by commercial property and the business model discourages economies of scale and reverses their optimum strategy of high income and low capital appreciation.
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