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Savills attacks ministers over clampdown on private rented sector
Original Author: Rosalind Renshaw
Demand for rented homes will rise by more than 1m households over the next five years, Savills has claimed.
It says that demand will continue to grow, despite government measures to clamp down on private landlords and help ‘generation rent’ become ‘generation buy’.
The Government has a target of building 400,000 new affordable homes for sale over the course of this parliament, but Savills claimed that the UK will still require an additional 220,000 homes for rent a year.
Policy will curb some of the demand for rented homes, but demand is such that researchers at Savills forecast that the sector will grow by 1.1m households by 2021, even assuming the 400,000 homes target is reached.
In a new report, Rental Britain, Savills says the economic recovery and ongoing low interest rate environment have done little to reverse the growing need for rented housing.
Instead, house price inflation has pushed home ownership further out of reach for many, while rental stock in the social sector has shrunk.
According to the English Housing Survey, the private rented sector grew by 17,500 households per month on average over the ten years to 2014.
Government housing policy, including Starter Homes, a greater number of Shared Ownership homes and access to larger equity loans through Help to Buy London, seeks to reverse this trend by helping people access the property ladder.
However, Savills director of residential research Susan Emmett said: “Demand for rented homes could rise more sharply than we have forecast.”
She said that the introduction of a Stamp Duty surcharge of 3% on buy-to-let properties and the restriction on tax relief on mortgage interest payments are likely to limit the ability of private investors to expand their portfolios.
This, she said, presents a major opportunity for large scale institutional investors to step into the gap, with expectations that they will remain exempt from the tax changes and become increasingly attractive sources of bulk finance for developers.
