Rental housing crisis will undermine Chanellor's growth plans

The Government’s efforts to attract “global talent” to the UK will be undermined unless urgent action is taken to boost the supply of homes to rent.

That’s the warning by organisations representing institutional and individual landlords along with letting agents. 

Speaking at the World Economic Forum in Davos earlier this year, the Chancellor spoke of wanting to attract the “highest skilled” people to the UK as part of her efforts to boost economic growth. 

However, in a joint letter, the British Property Federation (BPF), the National Residential Landlords Association (NRLA) and Propertymark warn that this will be impossible unless the chronic shortage of homes to rent is addressed urgently.

According to data from Oxford University’s Migration Observatory, 42 per cent of the foreign-born population in the UK live in the private rented sector, compared to 16 per cent of those born in the UK. Among those born in the European Union, 52 per cent live in private rented accommodation. 

Without sufficient rented housing, those the Government seeks to attract will struggle to find a place to live. This is supported by data from Savills which suggests that up to one million new homes for private rent will be needed by 2031 to accommodate growing demand.

The letter expresses concern about the impact the stamp duty hike set out in the Autumn Budget has had on the provision of rented housing. The head of the Institute for Fiscal Studies has warned it will lead to “fewer properties” being made available.

The Chief Executives of the BPF, NRLA and Propertymark said: 

“We support the Government’s ambition to grow the economy and welcome international expertise to the UK. However, policy needs to back up the rhetoric.

“Without substantial support to boost the supply of new, high-quality homes to rent, the Chancellor’s efforts to attract global talent will fail.

“We urge the Government to engage with the sector to develop forward-thinking policies that provide the homes to rent the country desperately needs.”  

-ENDS-
 
Notes:

•    A full copy of the joint letter to the Chancellor can be accessed here. 

•    At the World Economic Forum, Chancellor spoke of her desire to attract “global talent” to the UK. See here.

•    Data from the University of Oxford’s Migration Observatory demonstrates that those coming to the UK from overseas are far more reliant on the private rented sector than those who are not. According to the Census data analysed by the Observatory, whilst 16% of the UK-born population live in the sector, this rises to 42% among the foreign-born population, and 53% for those born in the European Union. See here. 

•    Research by Savills suggests that up to one million new homes for private rent will be needed by 2031 to accommodate growing demand. See here.

•    Responding to the Budget last year Paul Johnson, Director of the Institute for Fiscal Studies, said on X: “I have long said stamp duty is among our worst taxes. So what do we have? An increase for those buying second properties. You might think fine: a tax on rich people and landlords. But those looking to rent will pay part of the cost as fewer properties made available. I despair...”. See here.

•    Further information about the NRLA can be found at www.nrla.org.uk.  It posts on X @NRLAssociation.

•    The NRLA’s press office can be contacted by emailing [email protected] or by calling 0300 131 6363.