9:23 AM, 1st December 2023, About 3 months ago 1
The covid pandemic has fuelled a record high demand for private rental properties, while the supply of available homes dwindles, a new survey reveals.
The findings from the National Residential Landlords Association (NRLA) warns that this imbalance will erode the purchasing power of tenants and make it harder for them to challenge criminal landlords.
The survey found that 71% of landlords reported increased tenant demand in Q3 2023, a record high.
This is up from 65% the same time last year, and 22% in Q3 2019 before covid lockdown measures were introduced by the Government.
The NRLA’s chief executive, Ben Beadle, said: “Would-be renters face a desperate situation as ever-growing numbers seek to access a dwindling number of available homes.
“The Government needs to accept the folly of a tax system that makes investment in holiday lets more sustainable than long term homes to rent.”
He added: “We need pro-growth tax measures. This should include ending the stamp duty levy on the purchase of homes to rent out, as well as reversing mortgage interest relief changes which have hit the sector hard.”
The NRLA says that tenant demand is strongest in the West Midlands, where 76% of landlords reported an increase, followed by 75% saying the same in Wales and 74% in the South East (excluding London).
Despite the surge in demand, more than one in 10 (12%) landlords said they sold property in Q3 2023.
This is more than double the 5% of landlords who confirmed they purchased property in the same period.
Similarly, 28% of respondents said they plan to cut the number of properties they rent out over the next 12 months.
This contrasts with the 8% of landlords who plan to increase the number they let over the coming year.
The NRLA warns that the ongoing imbalance between the demand for, and supply of, private rented housing will put any gains which result from the Chancellor’s decision to unfreeze housing benefit rates at risk.
In addition, without measures from the Government to support the supply of private rented housing, tenants will continue to struggle to hold criminal landlords to account given the shortage of alternative accommodation across the sector.
Research by Capital Economics for the NRLA found that removing the 3% stamp duty levy on the purchase of additional homes would see nearly 900,000 new private rented homes made available across the UK over the next 10 years.
As a result of increases in income and corporation tax receipts, the firm’s modelling suggests this would lead to a £10 billion boost to Treasury revenue over the same period.