National report highlights severe rental home shortage
Agents and renters are well aware there is a real shortage of rented accommodation locally but the whole UK will fail to meet rising targets for new private rented homes without more investment in the rental sector. According to the latest research the shortfall is set to hit 540,000 unless action is taken.
A report by the economics consultancy Capital Economics, commissioned by the National Residential Landlords Association (NRLA), reveals that if owner-occupation and social housing continue at their 10-year average growth rate, the Private Rented Sector supply would have to increase by 227,000 homes every year to meet government targets and an anticipated 1.8 million new households over the next decade.
However, it suggests that without changes in tax or other policies, private rented sector stock will drop by a further 540,000 properties during that time.
The projections come as government figures show that the supply of private rented housing in England has fallen by almost 260,000 during the past five years.
The Capital Economics report explains that demand will only increase as the 15-24-year-old cohort in the population is forecast to grow by 866,000 (11%) by 2030.
It says that in order to meet targets for housing supply the Treasury needs to encourage investment in the sector to encourage and support an increased rate of new builds, the switching of commercial property to residential use, the switching of stock from short-term to long-term lets and bringing empty homes back into use.
Ben Beadle of the NRLA says: “Today’s report highlights in stark detail the supply crisis now engulfing the sector. Without urgent action, the increasing number of people looking for affordable housing will be the ones to struggle as they face less choice and higher rents as supply dries up.”
Even with increased provision of affordable housing and higher rates of owner-occupation, both of which are very important, significant additional investment is needed by landlords in the private rented sector to provide much needed accommodation.”