The National Residential Landlords Association (NRLA) has highlighted a concerning trend in the UK rental market, with a significant rise in demand for rental properties and a corresponding decrease in available homes. Independent research conducted by BVA-BDRC for the NRLA reveals a dramatic increase in tenant demand, with 71% of landlords reporting a surge in Q3 2023, a notable rise from 65% in the previous year and a stark contrast to the 22% seen in Q3 2019 before the pandemic.
The West Midlands leads in tenant demand, with 76% of landlords reporting increased interest, followed closely by Wales and the South East (excluding London). Despite this record demand, the survey indicates a worrying trend among landlords, with 12% stating they sold property in Q3 2023, more than double the 5% who purchased property in the same period. Furthermore, 28% plan to reduce their rental property portfolio over the next year, compared to just 8% looking to expand.
Ben Beadle, chief executive of the NRLA, warns of the dire consequences for renters, stating, “Would-be renters face a desperate situation as ever-growing numbers seek to access a dwindling number of available homes.” He criticizes the government’s tax policies, which he believes discourage investment in long-term rental properties compared to holiday lets.
Beadle calls for “pro-growth tax measures,” including the removal of the stamp duty levy on the purchase of homes for rent and the reversal of mortgage interest relief changes. According to research by Capital Economics for the NRLA, eliminating the 3% stamp duty levy could result in nearly 900,000 new private rented homes in the UK over the next decade and potentially boost Treasury revenue by £10bn in the same period.
This situation poses a significant challenge for tenants, particularly with the chancellor’s decision to unfreeze housing benefit rates potentially being undermined by the ongoing supply-demand imbalance. The shortage of alternative accommodation makes it harder for tenants to hold rogue and criminal landlords accountable. The NRLA’s findings suggest an urgent need for government action to support the private rental sector and address the escalating housing crisis.