Surveyors in plea to government over shortage of homes to rent
Britain is facing a "critical" shortage of rental homes and must ramp up house-building to meet a surge in demand from those priced out of the property market, according to a surveyors' group.
The Royal Institution of Chartered Surveyors (Rics) said at least 1.8 million more households will be looking to rent rather than buy by 2025 as house prices continue to surge higher.
But it warned the UK was heading for a “rental supply crisis” after recent government changes to increase buy-to-let stamp duty.
It claimed 86% of landlords have no plans to increase their rental portfolio this year, with supply set to fall further after changes due next year will remove a landlord’s right to deduct mortgage interest from their income tax bill.
Rics wants ministers to reverse April’s stamp duty increase and is also calling on the Government to pioneer a new rent-to-buy programme.
Jeremy Blackburn, head of policy at Rics, 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 number of UK households renting property more than doubled from 2.3 million in 2001 to 5.4 million in 2014, according to Rics.
But it said figures show a marked decline in the buy-to-let market, with a net balance of 58% of estate agents reporting a drop in sales in the sector since May.
In April, the Government increased the stamp duty to 3% for anyone buying a home that is not their main residence.
The Rics warning comes as the Government continues a push to increase home ownership, with Communities Secretary Sajid Javid announcing schemes on Monday totalling £5bn to help build new homes.
Mr Javid said the Government will create a new Home Building Fund which will use £3bn of previously announced cash to help build more than 225,000 new homes and create thousands of jobs.
He told the Conservative Party conference in Birmingham that tackling the housing shortage would be his “number-one priority”.
But Mr Blackburn 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.
“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.”