Regional data reveals extent of supply crisis in the East and South East of England
Renters across the East and the South East of 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, 76 per cent of private landlords in the East of England reported rising demand for rented housing. This was up from the 66 per cent of respondents who reported seeing the same trend in Q4 2021. Likewise, 81 per cent of private landlords in the South East of England reported rising demand for rented housing during the same period.
Despite strong demand the figures, compiled by research consultancy BVA-BDRC, found that just six per cent of landlords in the East plan to increase the number of properties they rent out in 2023. In contrast almost four in ten (39 per cent) said they planned to cut the number they let. In Q4 2021, a quarter of landlords (24 per cent) in the region planned to cut the number of properties they rented out.
Likewise,BVA-BDRC, found that just seven per cent of landlords in the South East plan to increase the number of properties they rent out in 2023.In contrast over a third (37 per cent) said they planned to cut the number they let. In Q4 2021, a quarter of landlords (24 per cent) in the region 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 also issued a warning setting out how 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.”
Joanne Dron, East of England spokesperson for the National Residential Landlords Association, said:
“The East of England needs more homes for private rent. Without them renters across the region 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.”