UK’s 1.8m shortage of rental homes

The UK is facing a shortfall of 1.8m rental homes over the next decade, according to statistics from the RICS. It says there are expected to be a further 1.8m renters by 2025, but the vast majority of new buy-to-let supply has dried up. Sales of buy-to-let properties have dropped sharply since stamp duty changes, which have seen additional costs added to buy to let landlords. The RICS says 86% of landlords say they have no plans to increase rental portfolio this year. The problem is expected to be exasperated when landlords’ right to deduct their mortgage interest from their income tax bill is removed. The RICS is urging the government to reverse its home ownership focus and repeal April’s stamp duty changes to address short-term supply issues. In the long term, it is advocating a greater focus on the build-to-rent sector. It would like to see pension funds incentivised with tax breaks to build large-scale rental properties with affordable elements. Additionally, local authorities holding brownfield sites should be encouraged to release land for such properties. Jeremy Blackburn, RICS head of policy, said: “The private rented sector became a scapegoat under the previous prime minister, and because of that, it suffered. Yet with increasingly unaffordable house prices, the majority of British households will be relying on the rental sector in the future.” Grainger is the UK’s largest residential property owner with a portfolio of 9,000 existing rental homes across the UK. Earlier this year, it set out plans to invest a further £1bn into the rental housing market through build-to-rent. Helen Gordon, chief executive of Grainger plc, said: “Build-to-rent can help the government in five simple ways: by increasing housing supply; by delivering more quickly than other traditional housebuilding models; through creating new jobs and contributing to town centre regeneration; by providing a better deal to customers including more stability; and by supporting greater flexibility in the labour market.” • To send feedback, e-mail alex.peace@estatesgazette.com or tweet @EGAlexPeace or @estatesgazette