Rental reform undermined by chronic shortage of homes to rent

rental-reform-undermined-by-chronic-shortage-of-homes-to-rent

A lack of choice for private renters about where they can live will undermine plans set out by many of the UK’s major political parties to reform the rental market.

That is the warning from the National Residential Landlords Association (NRLA) as the Conservatives, Labour, Liberal Democrats and Green Party all propose ending section 21 evictions.

According to the NRLA, none of the parties properly address the most pressing and basic problem for tenants – namely the chronic shortage of homes for private rent. According to recent research on average 15 renters are chasing each available property, which has caused rents to rise across the market.

The Royal Institution of Chartered Surveyors (RICS) has spoken of a “huge mismatch” between supply and demand in the sector, with renters facing “ever-rising living costs and plummeting affordability levels.”

The NRLA says that without bold measures by the next government the situation is set to worsen for tenants. The trade body’s concerns come as Savills warns that up to one million new homes for private rent will be needed across England and Wales by 2031 to meet demand.

Uncertainty over regulation of the sector, coupled with the ongoing problem of growing costs, are the key drivers of the supply crisis. This includes tax hikes since 2015 which the Institute for Fiscal Studies notes have stunted growth in the market and led to higher rents.

The NRLA is calling for certainty over the regulation of the rental market. When section 21 repossessions end, it needs to be replaced with a system which makes good on the Shadow Housing Minister’s belief that: “Landlords need robust grounds for possessions in legitimate circumstances, and they need the system to operate quickly when they do.”

Separately, research by Capital Economics suggests that scrapping the three per cent stamp duty levy on the purchase of additional homes would see almost 900,000 new long-term homes to rent made available over the next decade. This would lead to a £10 billion boost to Treasury revenue due to increased income and corporation tax receipts.

The NRLA is alos urging the next government to scrap the stamp duty levy where landlords bring one of the more than a quarter of a million long term empty homes back into use.

Ben Beadle, chief executive of the NRLA, commented: “Renters are being let down by a repeated failure to address the rental housing supply crisis.

“The lack of choice serves only to drive up rents and, given the shortage of alternative accommodation for them to move to, makes it harder for renters to hold rogue and criminal landlords to account.

“We will work with the next government to ensure the replacement for section 21 works for the sector as a whole. However, greater security for renters will mean nothing if they cannot find homes to rent in the first place.”

Labour vows to improve conditions for renters – but campaigners demand more detail

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