"The government's strategy for the private rented sector lies in tatters"
An association of landlords has pinned the blame on the government for allegedly causing the shrinking of the rental market despite a substantial spike in demand for private rented properties.
Official figures show that the number of households in the private rented sector has fallen by over a quarter of a million over the past five years. However, demand from prospective tenants continues to soar, with students among those scrambling to access a dwindling number of properties.
According to Zoopla, so far this year, the demand for private rented housing in the UK is up 142% compared with the five-year average, while the supply of such homes has fallen by 46%. A similar trend has been reported by Rightmove which stated that, in Q3 2022, tenant demand increased by 20% compared with Q3 2021.
Read more: Rents continue to rise – ONS.
Government policy has broken the private rented sector, the National Residential Landlords Association (NRLA) said, claiming that since 2015, the government has embarked on a deliberate effort to discourage investment in private rented housing.
The group said this has included measures to restrict mortgage interest relief and imposing a 3% stamp duty levy on the purchase of homes to rent out. The NRLA added that they have received reports that suggest the chancellor may impose further tax hikes on rented housing ahead of the Autumn statement.
With the demand for rental housing set to grow further as mortgages become more expensive, the NRLA is warning that further tax hikes will serve only to exacerbate the crisis facing many tenants trying to find housing.
“The Government’s strategy for the private rented sector lies in tatters,” Ben Beadle, chief executive at the National Residential Landlords Association, said. “The fact that the supply of homes to rent is falling despite an increase in demand is a damning indictment of tax decisions which serve only to increase rents and make homeownership more difficult to achieve.
“Further tax hikes on the sector risk making an already bad situation worse. Ministers need to recognise that a healthy and vibrant private rental market needs to sit alongside, rather than be in competition with, efforts to support homeownership.”
