Tenants face squeeze as PRS homes fall to 10-year low

Tenants face squeeze as PRS homes fall to 10-year low

0:02 AM, 6th March 2024, About 5 months ago

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Despite an increase in the overall number of private rented sector (PRS) properties, the proportion of these homes in England has fallen to its lowest level in a decade, research reveals.

The findings from Zero Deposit highlight the decline is attributed to the government’s focus on supporting homeownership, leaving the rental sector under-resourced and leading to a surge in rent costs.

The research reveals that while the number of available rental properties has risen from 4.5 million in 2013 to 4.9 million in 2024, this growth hasn’t kept pace with the increasing demand.

In comparison, the number of owner-occupied homes has seen a more significant rise, highlighting the government’s prioritisation of homeownership initiatives.

‘Consistent increase in the volume of privately rented homes’

The firm’s chief executive, Sam Reynolds, said: “We may have seen a consistent increase in the volume of privately rented homes reaching the market over the last two decades, but today’s market is dominated by a chronic undersupply of rental properties despite an overwhelming level of tenant demand.

“This market imbalance has been one of the key factors that have caused rents to spiral beyond the realms of affordability and it’s a clear indictment of multiple cabinets that this issue has continued to worsen.”

He adds: “Over the last five years, in particular, the supply of owner-occupied homes has increased at a far greater rate than privately rented properties and renters will be forgiven for thinking that the Government is more focussed on homeowners than the real issues facing tenants today.

“The sad reality is that we expect it will be more of the same in the Budget, as we prepare for yet more ill-advised initiatives aimed at short-term benefits to win votes as we approach an election, rather than address the root causes for those struggling within the rental market who continue to be left out in the cold.”

Lack of investment in the PRS

The lack of investment in the PRS has had a significant impact on tenants, the research reveals, with the average rent in England reaching £994 per month.

This figure represents a 5% increase in the last year alone and a 37% rise over the past decade.

Looking ahead, experts predict a further 16% increase by 2030.

The research also identified regional disparities, with some areas experiencing a more acute shortage of rental properties.

The lowest proportions of privately rented homes

Yorkshire and the Humber, the South West, the East of England, and the North West all reported the lowest proportions of privately rented homes in over a decade.

While London boasts the highest number of rental properties (29.5% of the total housing stock), it also has the most expensive rents in the country.

However, the North East, despite having a lower proportion of rental properties (17.8%), offers the most affordable rents in England.

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