They say that unless the government acts, there will be an exodus of landlords from the private rental market, thus reducing the number of properties available to rent.
The existing supply-demand imbalance in the PRS is already making it tough for many tenants to find a decent place to live – and driving up the cost of renting, and yet two thirds of landlords say the demand for private rented housing is continuing to increase.
According to new research commissioned by the NRLA, in the final quarter of last year 63% of landlords reported increased demand from tenants according to data compiled by research consultancy BVA-BDRC. This is a substantially higher proportion than prior to the pandemic. In Q4 2019 25 per cent of landlords reported increased demand.
The release of these findings follows the NRLA’s warning that the demand for private rented housing is set to increase substantially. In its Budget submission to the Treasury, the NRLA highlights:
+ Projections from UCAS which show there could be a million applicants for higher education in a single year in 2030, almost a third higher than in 2022.
+ The number of those aged 15-29 is set to increase by over 6 per cent over the next decade according to the Office for National Statistics.
+ Net migration flows are likely to settle at 245,000 annually by 2026/27 according to the Office for Budget Responsibility. Data shows that migrants are three times more likely to be in private rented accommodation than the UK-born population.
+ Continued difficulties for many who aim to become homeowners. Hamptons forecasts a repeat of the situation which followed the 2008-09 financial crisis, which saw an extra one million potential homeowners unable to afford higher mortgage payments and instead turn to the rental market for accommodation.
Despite the growing demand, the NRLA’s survey data shows that landlords are far more likely to sell rather than invest in new properties to rent. Whilst 11% plan to increase the number of homes they let, 30% plan to cut the number they rent.
Amidst a chronic shortage of homes to rent to meet demand, the NRLA is calling on the chancellor to scrap tax hikes.
It wants the Treasury needs to end the 3% stamp duty levy on the purchase of homes to let. This it estimates could see almost 900,000 new private rented homes made available across the UK over the next ten years according to Capital Economics. It would also lead to a £10bn boost to Treasury revenue through increased income and corporation tax receipts.
Ben Beadle, chief executive of the NRLA, said: “The demand for private rented housing is only set to grow. As it does, would-be tenants will face the reality that there are not enough homes to meet their needs. This is a result of deliberate efforts using the tax system to dampen supply.
“The country needs more of every type of housing, and that has to include new homes for private rent. The quicker the Government takes this into account, the sooner we can relieve the struggles renters face when finding a place to call home.”