PRS housing shortage ‘threatens Chancellor’s economic vision’

A coalition of property experts is highlighting the lack of homes to rent in the UK could derail ambitious government plans to lure top-tier international talent.

Organisations representing landlords, individual property owners and letting agents have united in their call for swift measures to increase the availability of homes for tenants.

The Chancellor Rachel Reeves, speaking at the World Economic Forum in Davos earlier this year, outlined her goal to attract the ‘highest skilled’ talent to Britain to fuel economic prosperity.

Yet, a collaborative letter from the British Property Federation (BPF), the National Residential Landlords Association (NRLA) and Propertymark warns this aspiration hinges on resolving the shortage of rental accommodation.

Boost the supply of homes

The chief executives of the BPF, NRLA and Propertymark said: “We support the government’s ambition to grow the economy and welcome international expertise to the UK.

“However, policy needs to back up the rhetoric.”

They add: “Without substantial support to boost the supply of new, high-quality homes to rent, the Chancellor’s efforts to attract global talent will fail.

“We urge the government to engage with the sector to develop forward-thinking policies that provide the homes to rent the country desperately needs.”

Rely on a PRS home

Data from Oxford University’s Migration Observatory reveals that 42% of the UK’s foreign-born residents – compared to just 16% of native Brits – rely on the private rented sector for a home.

For those hailing from the European Union, that figure climbs to 52%.

Without enough properties to house newcomers, the government’s recruitment drive risks stalling, the coalition warns.

Estate agency Savills projects a need for one million extra rental homes by 2031 to meet escalating demand.

The letter flags concerns over the Autumn Budget’s stamp duty increase, which the Institute for Fiscal Studies’ chief has warned will shrink the pool of available properties.

Fewer homes for rent

The letter also points to Zoopla data which shows that, compared to before the pandemic, the typical estate agent now lists 18% fewer homes for rent.

Agents also say that interest from potential renters has surged by 31%.

And the English Private Landlord Survey (2024), recently released by the Government, indicates that 31% of landlords intend to cut back on their rented properties over the next two years, a rise from 22% in 2021.

Meanwhile, just 7% of landlords plan to expand their holdings, down from 11% in 2021.

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