UK Facing a Shortage of 1.8 million Rental Properties
With house prices continuing to rise exponentially, making home ownership increasingly unaffordable for many people in the UK, RICS has predicted that by 2025, 1.8 million more households will be looking to rent property, rather than buy. New figures show an ailing rental sector that can't keep up with demand, and 58% of RICS estate agents have reported a drop in buy-to-let sales since May. In addition to this, it is reported that 86% of private landlords have no plans to increase their rental portfolios in 2016, with this trend set to continue for the next five years.
The total number of UK households renting property doubled from 2.3m in 2001 to 5.4m in 2014 and latest figures show that there has been a 15% drop in house sales to first time buyers over the past six months. Earlier this year, the Government took measures to dampen demand for buy-to-let investments by making changes to the Stamp Duty threshold. This has further reduced supply, arguably making a rental supply crisis look much more likely. And the problem is only expected to get worse next year when landlords’ right to deduct mortgage interest from their income tax bill is removed.
Talking about the current state of the rental market, Jeremy Blackburn, RICS head of UK policy said, 'It's time for Theresa May to get out her hard hat. We are facing a critical rental shortage and need to get Britain building in a way that benefits a cross section of society, not just the fortunate few.
'The Private Rented Sector became a scapegoat under the previous Prime Minister, and because of that it has suffered. Yet with increasingly unaffordable house prices, the majority of British households will be relying on the rental sector in the future. We must ensure that it is fit for purpose, and the Government must put in place the measures that will allow the rental sector to thrive. Any restrictions on supply will push up rents, marginalising those members of society who are already struggling.'