HomeLatest NewsPrivate Rented Sector Could Lose More Than 100,000 Homes
Private Rented Sector Could Lose More Than 100,000 Homes
Posted on 01/08/2018 by Sulgrave Estates
The UK private rental sector could lose more than 100,000 homes over the next 12 months according to the latest research.
RLA’s research group PEARL surveyed 2,600 landlords. In its analysis, it attributed the potential fall in the supply of rental homes to landlords leaving the sector due to tax and regulatory changes.
Whilst tenant needs show no sign of slowing down – with 84% of landlords reporting tenant demand to be increasing or remaining stable – the findings suggest that rising costs are already forcing property-owners to sell up. As well as losing a forecasted 133,000 homes, the report states that an estimated 46,000 private rented homes have already been lost.
RLA Policy Director David Smith said “The demand for private rental homes shows no signs of slowing up, despite efforts to encourage home ownership. The Government was always mistaken to place homes to own and to rent in opposition to each other rather than seeking to supply more homes in all tenures”.
Landlord concerns centre on the decision to restrict mortgage interest relief to the basic rate of income tax and the additional 3% on stamp duty for the purchase of subsequent homes.
According to the research, just 2% of all private tenant households in the UK are in homes developed by corporate investors, with the vast majority of landlords made up of individuals and small businesses. As a result, tax changes are making it unviable to operate.
Earlier research found that 62% of landlords believed that the profitability of their investments would be reduced by at least 20%. While 67% said that they were considering minimising their investment due to tax changes. Dr Tom Simcock, Senior Researcher for the RLA, commented “These changes make it easier for those who are wealthier and cash-rich to invest in the private rented sector, over those middle income earners that may look to purchase a property with finance while also limiting the access of the sector for the more vulnerable tenants and those who can’t afford to buy or can’t access social housing”.
To stop a landlord exodus, the RLA is calling for “smart taxation policies that support private landlords to provide long-term homes. We need to move to a broader but fair reform of private renting; with improved access to justice for landlords and tenants, expanded options for the security of tenure, and a reformed taxation policy that supports not penalises private landlords.”