Close to 85,000 new private rented homes are needed annually to meet housing demand in London, a new report has found.
The report, authored by economics consultancy Capital Economics and commissioned by the National Residential Landlords Association (NRLA), reveals the stark shortage in the supply of rented homes across the capital.
These conclusions are based on government targets which state that 340,000 homes a year must be built across the UK by the middle of this decade to meet future demand.
Capital Economics reports that, if owner occupied and social rented homes in the UK continue at their ten-year average rate of growth, private rented sector supply would have to increase by 227,000 properties per year to meet government targets.
Growth on this level is also needed if supply is to meet the needs of an anticipated 1.8 million new households over the next ten years. In the case of London, the capital would require approximately 83,000 new rental properties a year over the next decade.
The projections come as government figures show that the supply of private rented housing in London has fallen by 85,000 over the past five years.
Given that renting privately is often the first step young people take when they need to leave home or university, demand will only increase. The 15-24 cohort in London is forecast to grow between now and 2030 by over 120,000 (almost 12%).
Additional survey data by the research consultancy BVA-BDRC suggests that, in Central London, 74 per cent of private landlords saw an increase in the demand for homes to rent in Q4 2021. This was up from the 54 per cent figure revealed by BVA/BDRC’s Q3 2021 research.
Capital Economics sets out how, in order to meet targets for housing supply, the Treasury needs to encourage investment in the sector.
Greater investment would, it argues, support the provision of new housing in a number of ways. This includes, increasing the rate of new builds and switching commercial property to residential use. Likewise, the report points to the contribution the sector can make in moving stock from short term to long term lets and bringing empty homes back into use.
Ben Beadle, chief executive of the NRLA, said: “As the demand for private rental properties picks up following the pandemic, renters across the capital will struggle to find the homes they need and want. For all the efforts to support homeownership, the private rented sector has a vital role to play in housing so many Londoners.
“Today’s analysis demonstrates the folly of the mayor’s calls for rent controls in the capital, a policy which would serve only to freeze investment in the very homes renters need.”
The Government and Shelter need to re-set their approach to the PRS and stop the landloord bashing. Stop the abolition of S21 and start to see what they are doing to the PRS by driving away landlords OR start providing the housing needed themselves. As for the Mayor of London and his political amibitions to bring in rent control only the poorest will suffer and those who need bottom end housing. Indeed, the Mayor seems intent on expanding the ULEZ to outer London (which I do not recall being in his manifesto) whilst not adressing housing shortages, crime and the many other problems London’s mayor should be concentrating his efforts on. The Labour party always say they are for working people – well that is not what it seems like by reducing housing supply and taking away their cars (bearing in mind the poor people have the older cars that will be targeted).
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Couldn’t have put it better! The government and the mayor seem to have it completely backwards.
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So London needs 85000 new rental homes a year, eh? I’d say the best way to achieve this is extreme taxation, legislation and a range of preventative measures to force up rents and homelessness. So don’t worry, the govt are already on to it!
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…..and Sadiq Khan’s answer to this is ……….rent controls – duh!
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This is like a stuck record …… how many times over the decades have we got to hear we need more housing?
Action is required is build, build and build. Simple answer but not simple to implement.
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