Housing market unprepared for growing numbers of 'life-long' renters
The housing market is not geared to meet growing demand from life-long renters, a property management firm claims.
DJ Alexander also points out that buy-to-let landlords are contemplating leaving the sector thanks to recent tax and regulatory changes, and this trend is also hitting rental supply.
If the private rented market shrinks while social housing growth remains relatively flat, the company warns there is a risk that the much larger number of life-long renters may find their options limited by a lack of housing stock.
David Alexander, managing director of DJ Alexander Ltd, said: “The buy-to-let market has become much tougher in recent years with changes to affordability, access to finance, and a reduction in the tax benefits of property investment.
“All of this has led to a softening of the market and the option for many landlords of either leaving or contemplating leaving the marketplace.
“The result is potentially a fall in the number of private rental properties available although this will be different across the UK with some rental markets stronger than others.
“Therefore, many life-long renters, of whom there are a growing number in their thirties and forties, may find their choice limited by a smaller marketplace.
“The government and local authorities need to work together with the private sector to ensure that we have a sufficient housing stock to serve the changing needs of the UK population.
“This means the freeing up of more land in areas where demand is high for property development, a steady and continuing programme of social house building, the encouragement of the private sector to build more homes in areas of greatest need, and the encouragement of a strong and vibrant private rented sector.”
The latest figures from ARLA Propertymark show that the supply of homes available to rent dropped last month, while demand from renters hit a near 12-month high, and this trend looks set to continue.
Owner occupiers in the 35-44 age group, for instance, have fallen from 71.6 per cent to 52.4 per cent over the last 11 years, while private renters have increased from 11.4 per cent to 28.5 per cent over the same period.
Earlier in the year the Residential Landlords Association (RLA) commented on similar research conducted by the BBC calling the government to help the lettings industry to do more for older renters.
RLA policy director David Smith says that “the growth in the number of older tenants is one factor behind an increase in demand for rented housing at a time when an increasing number of landlords are not investing in more properties or are selling off homes because of government tax rises on the sector.”
Social renters in this age group have risen slightly over the same period from 17.0 per cent to 19.1 per cent.