Minister agrees rental supply crisis is forcing rents up
Treasury Minister Emma Reynolds has recognised rising rents have come about due to the mismatch between supply and demand in the private rented sector.
Responding to a parliamentary written question from Labour MP Bell Ribeiro-Addy, the Minister said:"Rental prices are ultimately determined by the total supply of housing, relative to demand.
"Affordability of housing has fallen drastically, particularly in major cities, as too few homes have been built.”
Her comment comes as figures from the property portal Zoopla show that there are an average of 12 renters chasing each home for rent, double the level seen before the pandemic.
And with Government data suggesting a third (31 per cent) of landlords say they are planning to cut the number of properties they rent out, up from 22 per cent in 2021, the NRLA is warning of more pain for tenants unless the Government does more to support landords through the dramatic - and potentially expensive - impact of the widespread legislation change on the horizon.
NRLA Chief Executive Ben Beadle said: "The Minister is right. Rents are going up because there are simply not enough properties to meet demand, and measures proposed by the Government are going to worsen an already dire situation.”
“Changes such as the hike to stamp duty on the purchase of homes to rent that was announced in the Budget will only further dampen supply.
"Likewise, the lack of preparation for the increased pressures on the courts due to the Renters’ Rights Bill will deter investment in new homes to rent.
“It is also of serious concern that proposals to improve the energy efficiency of private rented housing contain no detail of the financial package needed to support investment in the required works.
"Without such support, these changes will pile yet more cost pressures onto the sector.
“The Government needs to address the shortage of homes for private rent as the only viable route for improving affordability in the sector.
"Until it does so, it will be tenants that continue to suffer the consequence of the rental housing supply crisis.”
More information
The NRLA has joined forces with the British Property Federation (BPF) and Propertymark to write to Chancellor Rachael Reeves warning that the supply crisis could scupper her plans to attract world class talent to the UK. To find out more, and read the letter click here.
Research carried out on behalf of the NRLA found almost eight out of 10 landlords reported high demand for properties in the final quarter of 2024, despite 20 per cent saying they had sold off homes in the last 12 months. To read more click here.
