Regional data reveals extent of supply crisis in central London and North East England
Renters across central London and North East England face a deepening crisis, as the squeeze on the supply of rented homes continues unabated.
According to new data released by the National Residential Landlords Association (NRLA), in Q4 2022 90 per cent of private landlords in central London reported rising demand for rented housing. This was up from the 74 per cent of respondents who witnessed the same trend in Q4 2021. Likewise, 82 per cent of private landlords in the North East reported rising demand for rented housing during the same period.
Despite strong demand the figures, compiled by research consultancy BVA-BDRC, found that just five per cent of landlords in the North East plan to increase the number of properties they rent out in 2023. In contrast four in ten (41 per cent) said they planned to cut the number they let. In the final quarter of 2021 just over a third of landlords (36 per cent) in the North East planned to cut the number of properties they rented out.
Likewise, just five per cent of landlords in central London plan to increase the number of properties they rent out in 2023. In contrast almost a third (30 per cent) said they planned to cut the number they let. In Q4 2021 just over one in five landlords (22 per cent) in central London said they planned to cut the number of properties they rented out.
A similar picture can be seen in outer London where 78 per cent of landlords reported that the demand for rented housing had increased in the final quarter of 2022, up from 62 per cent the year before.
Despite this, just six per cent of outer London landlords plan to increase the number of properties they rent out, compared to 28 per cent saying they plan to cut the number they let. This is up from the almost one in four landlords (23 per cent) in outer London who said they planned to cut the number of properties they rented out.
According to the Bank of England the mismatch between the demand for, and supply of rented housing, is in part a consequence of higher borrowing costs and tax hikes on the sector.
The Bank forecasts that by the end of this year, monthly mortgage repayments for buy-to-let landlords will likely rise on average by around £175. It has warned that a fifth of landlords with such a mortgage will face increases of over £300.
Ahead of the Budget, the NRLA is calling on the Government to undertake a full review of the impact of tax rises on the sector. This has been supported by the cross-party Levelling Up, Housing and Communities Select Committee, which has concluded that “landlords with small portfolios are currently critical to the provision of private rented accommodation.” It argues that a tax review of this kind should make the sector “more financially attractive to smaller landlords.”
Commenting on the data relating to central London Richard Blanco, London spokesperson for the National Residential Landlords Association, said:
“Londoners need more homes for private rent. Without them renters across the capital face a bleak future as they struggle to find anywhere to call home.
“Sadly, this crisis was all too predictable. It has been caused by successive Chancellors’ discouraging investment in the sector through the introduction of ever more punitive tax hikes.
“It is time the Government reversed course and accepted calls by the NRLA, the LUHC Select Committee and others for tax measures which encourage the supply of homes to rent.”
