Recent research commissioned by the National Residential Landlords Association sheds light on a prevailing trend among landlords, with two-thirds affirming a continual surge in demand for private rented housing. As reported by research consultancy BVA-BDRC, the final quarter of the previous year saw a substantial increase, with 63% of landlords noting heightened demand from tenants. This starkly contrasts the situation pre-pandemic, as Q4 2019 witnessed only 25% of landlords reporting an escalation in demand.
The data underscores a noteworthy shift in the rental landscape, indicating a sustained and significant uptick in demand. Landlords, as key players in the housing market, are evidently experiencing increased interest in private rental properties. The findings provide valuable insights into the evolving dynamics of the rental sector, showcasing a heightened demand that surpasses pre-pandemic levels and prompts a closer examination of the factors influencing this trend.
These findings are disclosed following the NRLA’s alert about the anticipated significant surge in demand for private rented housing. In their Budget submission to the Treasury, the NRLA emphasizes:
– Projections from education body UCAS indicate a potential surge in higher education applicants, reaching a million in a single year by 2030, nearly a third higher than the figures recorded in 2022.
– The Office for National Statistics predicts a 6% or more increase in the population of individuals aged 15 to 29 over the next decade.
– The Office for Budget Responsibility estimates that net migration flows are likely to stabilize at 245,000 annually by 2026/27. Additionally, data reveals that migrants are three times more likely to reside in private rented accommodation compared to the UK-born population.
– Challenges persist for individuals aspiring to own homes. Hamptons anticipates a scenario reminiscent of the aftermath of the 2008-09 financial crisis, where an additional one million potential homeowners, unable to afford higher mortgage payments, turned to the rental market for accommodation.
Despite the increasing demand, data from the NRLA’s survey reveals that landlords are more inclined to sell properties rather than invest in new rental properties. While 11% of landlords plan to augment the number of homes they let, a significant 30% intend to reduce the number of properties they rent out.
In the midst of a persistent shortage of rental homes to meet the surging demand, the NRLA is urging the Chancellor to eliminate detrimental tax hikes that adversely affect tenants. Specifically, the NRLA calls for the abolishment of the three per cent stamp duty levy on home purchases for letting purposes.
Taking such a step could potentially result in the availability of almost 900,000 new private rental homes across the UK over the next decade, according to estimates by Capital Economics. Additionally, this move is anticipated to generate a £10 billion increase in Treasury revenue through heightened income and corporation tax receipts.
Association chief executive Ben Beadle says: “The demand for private rented housing is only set to grow. As it does, would-be tenants will face the reality that there are not enough homes to meet their needs. This is a result of deliberate efforts using the tax system to dampen supply.
“The country needs more of every type of housing, and that has to include new homes for private rent. The quicker the Government takes this into account, the sooner we can relieve the struggles renters face when finding a place to call home.”