The latest research by The National Residential Landlords Association (NRLA) suggests that the number of tenants fighting it out per rental property in London is growing as the supply-demand balance in the capital continues to widen.
The NRLA is warning that, without action to tackle the supply crisis, renters will see their housing choices eroded even further.
It points to government data that shows the number of homes in the private rented sector in London fell by 6% between 2023 and 2024.
An analysis for London Councils and Trust for London has warned that properties are leaving the rental market at a much faster rate in the most affordable locations in the capital.
The slump in supply comes despite an average of eight people enquiring about every available home to rent in London, according to Rightmove.
Demand is only set to remain strong for the limited private rented housing available. Official data shows that waiting lists for social housing in London are at their highest for a decade. Meanwhile, the capital is now the only region across the country where the number of first-time buyers has fallen over the past ten years according to Halifax.
The supply-demand imbalance in London’s rental market is driving up rents and reducing tenant choice, particularly for low-income renters. Just 5% of private rented homes in the capital are affordable for those in receipt of housing benefits according to the data produced for London Councils and Trust for London. The lack of alternative housing options is also making it harder for tenants to hold rogue and criminal landlords to account.
London needs more homes for social rent and homeownership. But the NRLA warns that the city’s housing crisis will not be solved without a significant boost to the supply of new, high quality private rented accommodation.
The NRLA is calling for:
+ Tax reform to encourage the supply of new homes to rent that add to London’s overall housing stock. This could include scrapping the five per cent stamp duty levy on homes to rent where a landlord brings one of the over 38,000 long-term empty homes in the capital back into use.
+ A quicker justice system. When Section 21 repossessions are abolished, responsible landlords need assurance that the courts will process, and enforce, legitimate possession cases more swiftly than at present. Official data shows it takes an average of over half a year from the point a legitimate possession claim by a private landlord is accepted for consideration by the courts through to it being enforced. This includes cases related to serious rent arrears or tenant anti-social behaviour causing misery for neighbours and fellow tenants alike.
+ A financial package to support investment in energy efficiency upgrades as the Government considers new minimum energy efficiency standards for the private rental market.
Ben Beadle, chief executive of the NRLA, said: “Private renters across London are facing the brunt of the housing crisis. The shortage of homes to rent is a one-way street toward higher rents and even less choice for tenants.
“London needs more of all types of housing, and that has to include homes for private rent. It’s high time for policies that support investment in the homes renters desperately need.”
Demand will continue to grow as Young people keep joining the housing market who have no hope of buying a property. Rental will become the default as it is in places like Germany. Eventually prices will be led more by yield, if the government do something to make btl more attractive it will keep rents more affordable, that in turn will cap prices. If the government allowed investors to hold rental property in a SIPP it would grow the rental market. In the early 2000’s they very nearly did it when Pension Simplification legislation was proposed allowing Self-Invested Personal Pensions to invest in residential property from April 2006. We all attended lots of seminars and got very exited but this was reversed in late 2005 by Gordon Brown!
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The Government were warned time and time again that if they continued to assault Landlords then the private Landlords would be forced to sell and rents would increase and there would be a supply crisis.
As always, they decided that they knew best!
I don’t think there is an agent in the Country that doesn’t agree that rental properties should be in a habitable condition and tenants should be protected, however in trying to protect the tenants, the Government have actually disadvantaged them
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We had a tenant only this week very upset that the landlord will not offer them a fixed term contract for a further period as they want security of tenure, but, we had to explain that with the RRB coming all tenancies will be periodic and that a LL will be able to give 4 months’ notice if wishing to sell.
Most of the tenants we speak to really cannot understand why the government are championing something they feel they do not want, nor need.
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We know the Gov. hate private landlords and want to encourage build to rent to replace social housing. Developers are only interested in taking advantage of our high rents and are also only interested in high yield areas. If Serco can offer fixed term leases as a tenant why can’t other tenants not also offer the same now that Shorthold Tenancy Agreements will be abolished. I live in an area with many holiday lets where the owners rented for 6 months during the winter months. This will now not be possible and the properties will remain empty. This was a stop gap for many while they found a more permanent home and also gave them a landlord’s reference. I see nothing in this new bill for landlords especially where anti social behaviour is concerned and rent arrears will be the end of the road for many landlords who could see their properties repossessed. I cannot understand why NRLA insist the bill will be good for landlords?
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