Government fuelling rental demand and supply crisis

Government fuelling rental demand and supply crisis

10:41 AM, 5th May 2022, About 2 years ago 5

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The NRLA is warning that government efforts to dampen investment in rental housing are fuelling a supply crisis, hiking rents and making homeownership more difficult to afford. All at the same time data shows demand for rental property is at a record high.

Since 2015 the Government has embarked on a deliberate effort to reduce investment in rental housing. This includes taxing the supply of new homes to rent through a three per cent stamp duty levy. Moreover, the decision to restrict mortgage interest relief to the basic rate of income tax means that, unlike any other business, landlords are taxed on turnover rather than profits.

The NRLA is warning that these tax measures are fuelling a supply crisis in the sector. According to new data from research consultancy, BVA/BDRC for the NRLA, 62% of private landlords in England and Wales report heightened tenant demand in Q1 2022 – a record high.

Over the same quarter, more landlords (11%) sold property than purchased new property (8%), making the supply crisis even more acute.

Given that renting privately is the first housing tenure most young people enter when they leave home or university, demand will only increase. This is because the 15-24 cohort in the population is forecast to grow between now and 2030 by 866,000 (11%).

Amidst the supply crisis, official data shows that private rents across the UK increased by 2.4% during the first quarter of 2022. This was the largest annual growth in rents since July 2016, although still much less than inflation which stood at 6.2 per cent over the same period.

The NRLA is calling on the Government to scrap the stamp duty levy on the purchase of additional properties. According to Capital Economics, removing this would see almost 900,000 new private rented homes made available across the UK over the next ten years.

As a result of increases in income and corporation tax receipts, the modelling suggests this would lead to a £10 billion boost to Treasury revenue over the same period.

Ben Beadle, Chief Executive of the National Residential Landlords Association said:

“Ministers have been repeatedly warned of the damage that would be caused if they continued to attack the private rented sector.

“The supply crisis is completely counterproductive to the Government’s mission to turn renters into homeowners. By suppressing supply whilst demand increases, with rents going up as a result, they continue to make it harder for tenants to save for a home of their own.

“The Chancellor needs to wake up to a crisis of the Government’s own making, scrap the tax on new homes to rent and review other measures which add to a landlord’s costs.”

  • BVA-BDRC conducted 729 interviews with members of the NRLA online between 6th and 24th March 2022.
  • Office for National Statistics data, Principal projection – UK population in age groups, can be accessed at: Download here. The figures show that between 2022 and 2030, the number of people across the UK aged 15-24 will increase from 7,861,000 in 2022 to 8,727,000 in 2030 – an increase of 866,000 (11%).
  • The Office for National Statistics’ Index of Private Housing Rental Prices for March 2022 can be accessed at: It notes that: “Private rental prices paid by tenants in the UK increased by 2.4% in the 12 months to March 2022, representing the largest annual growth rate since July 2016.”
  • Inflation, as measured by CPI(H) in the year to March 2022 was 6.2%.

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Mick Roberts

8:06 AM, 6th May 2022, About 2 years ago

They never go and ask the hundreds of thousands of Benefit tenants why they can't get a house.

If they did and found out why by coming to ask us the Landlords, they would actually be relaxing the rules to increase supply which will reduce rents and improve conditions. How can they keep getting it so wrong.

Cause they in a cycle of Ooh must protect that naughty tenant who's being evicted, we'll worry about the thousand other tenants who now can't get a house cause we've stopped this landlord having his house back.


8:17 AM, 6th May 2022, About 2 years ago

The housing crisis has not got so bad that it's hurting the Government, and I don't see it getting to that point in the near future.

They'll then go into consultation mode for a year, and then legislative mode for another year or two. Only then will the supertanker start to change direction. By that time many Landlords will have left the PRS and invested elsewhere never to return to the PRS.

The BTR businesses (aka big Tory donors) will be given an ipen goal to step in and clean up. Despite the current private Landlord bashing, the BTR haven't stepped up to the plate.


8:22 AM, 6th May 2022, About 2 years ago

Reply to the comment left by Mick Roberts at 06/05/2022 - 08:06The Government have a different agenda i.e. replace private Landlords with big BTR businesses (aka big Tory donors)
To the Tories the sufffering of the homeless & those on Universal Credit is just collateral damage, and besides these people don't vote Conservative anyway,cso no loss there then.

Mick Roberts

8:32 AM, 6th May 2022, About 2 years ago

Reply to the comment left by Gromit at 06/05/2022 - 08:22
Yes u right.
All these BTR Legal & General pension funds and tower blocks certainly won't be taking Benefit tenants. We won't cause of the Anti landlord rules, yet we get the blame.

Luke P

8:53 AM, 6th May 2022, About 2 years ago

Whisper-quiet, timid & ever late from the wet lettuce that is Ben Beadle. WE CAN’T HEAR YOU…SPEAK UP, MAN!

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