1.8m new rental homes needed urgently
RICS says the sale of buy to let properties dropped sharply when the additional homes stamp duty surcharge was imposed on April 1, on top of which 86 per cent of landlords say they have no plans to increase rental portfolio this year – and possibly for the next five years.
RICS claims that by 2025 there will be 1.8m more households will be looking to rent. This follows more than a doubling in the number of UK households renting property from 2.3m in 2001 to 5.4m in 2014.
“We urge the Prime Minister to abandon David Cameron’s previous home ownership focus and reverse April’s stamp duty measures in order to address short term rental supply issues” says a statement from RICS.
The association says that in addition to those measures to help individual buy to let landlords, the government should encourage institutional build to rent too, with pension funds incentivised with tax breaks to build large scale rental properties with affordable elements. Additionally, local authorities holding brownfields sites should be encouraged to release land for such properties, RICS says.
“Our latest figures show that there has been a 15 per cent decline in house sales to first time buyers over recent months. That tells us that for all the rhetoric, David Cameron and George Osborne’s Starter Homes Strategy failed to get off the ground” says Jeremy Blackburn, RICS’ UK head of policy.
“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. 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” he claims.
Fenn Wright’s, lettings expert Joe Hall says: “This recent report highlights the pressure on the private rented sector to provide more accommodation in the coming years. Changes to income tax, stamp-duty and post-Brexit uncertainties have plagued landlords this year, but at Fenn Wright we believe the long term forecast is that the demand from tenants for property will continue to remain strong – and this belief is widely supported.”