"The next administration needs to reset its plans for the sector"
The National Residential Landlords Association (NRLA) is making an appeal to the next UK prime minister to “end hostility to landlords and take steps to encourage investment to meet the rising demand.”
The association lamented that since the government began to restrict mortgage interest relief for landlords, the number of private rented homes in England has fallen by over a quarter of a million. It noted that in stark contrast, those providing holiday lets continue to enjoy full mortgage interest relief - creating a distortion in favour of short-term housing over longer term rentals.
According to the NRLA, 76% of the councils surveyed by the District Councils Network have warned that a rise in landlords leaving the sector or converting properties to holiday lets has led to longer waits for council housing.
This trend, the NRLA said, is a direct result of government policy and punitive tax increases since 2015, which have shrunk the private rented sector.
“We need a strong and vibrant private rental market that meets the needs of those who rely on the flexibility it provides, those who need somewhere to live before becoming homeowners and those for whom the promise of social housing tomorrow provides cold comfort today,” Ben Beadle, chief executive of the National Residential Landlords Association, said.
“The next administration needs to reset its plans for the sector,” he added.
Read more: Government publishes details of rental reform white paper.
Citing the results of research by Capital Economics, the NRLA pointed out that just removing the stamp duty levy on additional properties would see almost 900,000 new private rented homes made available across the UK over the next 10 years, netting the government an additional £10 billion in revenue through increased tax receipts.
The NRLA said this move can potentially alleviate the supply crisis in the private rented sector too, which the next Prime Minister must also address if homeownership ambitions are to become a reality.
New survey data has shown that the supply of homes to rent is likely to keep falling over the next year while demand continues to increase.
In the survey, conducted by market researcher BVA BDRC, 23% of landlords said they plan to cut the number of properties they let in the next 12 months, up from 20% a year ago.
Of the more than 700 NRLA members interviewed for the survey, just 14% said they plan to increase the number of properties they let, unchanged since last year, but down four percentage points since the first quarter of 2022.
Read more: Rental yields drop again in Q2.
While the volume of supply is projected to shrink, 60% of landlords in England and Wales said demand for rental housing increased in the second quarter of the year. This represents a large increase on the 39% of landlords who reported increased demand a year ago.
With the demand for rental housing outstripping supply, private rents across the UK rose by 2.8% in the year to May 2022, the largest annual growth since January 2016.
“The last six years prove that it was a nonsense to think that cutting the supply of rental housing when demand is so strong would make it easier for those saving for a home of their own,” Beadle said. “Driving rents up just leaves tenants with less cash to save for a deposit.”
