Call for action on supply as property listings plummet in capital
As new data shows property listings in London have plummeted by 40%, the NRLA is calling for positive action to stimulate the supply of homes to let.
The research comes from a report by the London School of Economics and Savills, and includes data collected from NRLA members letting property in London.
The findings highlight a chronic lack of supply in the capital, with those properties that do hit the rental market becoming more and more unaffordable, with the authors describing the housing pressure as going from ‘bad to disastrous’.
The report also lays out practical recommendations for changes that could be made to Government policy to turn things round, such as introducing financial incentives for landlords to provide affordable homes and a move to reverse the freeze on Local Housing Allowance rates.
The findings
The report finds that:
- Advertised listings are down significantly on pre-COVID averages, with a 40% decline in availability of one to four-bed properties.)
- Rental turnover is decreasing – reduced choice means tenants are staying put and rising interest rates mean fewer are moving into homeownership.
- Just 2.3% of listings were affordable to LHA claimants in 2022/23, down to 1.9% in the first quarter of 2023.
In terms of landlords:
• 40% of properties listed for sale had previously been listed to rent, suggesting landlords are selling.
• Four times more landlords are looking to sell than acquire property in the next year.
• Those who indicate they intend to sell are re-investing in other, non-property assets.
• Fewer properties are being made available to local authorities for temporary accommodation/homelessness prevention – this is likely due to cost pressures and landlords looking to let property at higher rents to cover rising costs or because those homes have been sold from the PRS. They may also have been let through other bodies e.g. Home Office.
All these factors combine to create a perfect storm for renters searching for somewhere to live.
Landlords said they were making the decision to exit the market as a result of:
• Increasing costs
• Concerns about the benefits system
• Changing regulatory/fiscal context – licensing/energy performance requirements and MIR cited.
What needs to happen?
The report includes a list of practical recommendations to boost the chronic shortage of homes to let in London, including:
- An urgent cross-departmental review of PRS supply and national long-term strategy.
- Financial incentives for landlords to participate in the lower end of the market.
- Supporting lower income households by increasing the LHA rate.
- An investigation into the way regulatory costs fall on different types of landlords
The NRLA has been campaigning tirelessly on the issue of supply and has called for the Government to launch a full review of taxes affecting the private rented sector to determine what pro-growth measures should be introduced to resolve the supply crisis. It is also calling on Government to reinstate Mortgage Interest Relief, which it believes would encourage landlords to remain in the sector and continue to invest.
