Private landlords are witnessing a more than threefold increase in demand for rental properties compared to pre-pandemic levels.
Research for the National Residential Landlords Association (NRLA) indicates that 71% of landlords experienced heightened tenant demand in Q3 2023, a record high.
This surge is up from 65% last year and a significant jump from 22% in Q3 2019, before COVID-19 measures were implemented.
The study, conducted by BVA-BDRC, reveals the strongest demand in the West Midlands, with 76% of landlords reporting increased tenant demand. Wales and the South East (excluding London) follow closely, with 75% and 74% respectively.
Despite this unprecedented demand, over 10% (12%) of landlords reported selling property in Q3 2023, contrasting starkly with the 5% who purchased property in the same period.
Additionally, 28% plan to reduce their rental property count over the next year, compared to only 8% intending to increase their portfolio.
The NRLA warns of a worsening imbalance between demand and supply in private rented housing, potentially undermining tenants’ purchasing power and the benefits of the Chancellor’s recent decision to unfreeze housing benefit rates.
The association also emphasises the need for Government intervention to support private rental housing supply. This, they argue, is crucial for tenant protection against rogue landlords, given the shortage of alternative rental options.
Ben Beadle, chief executive of the NRLA, commented on the situation: “Would-be renters face a desperate situation as ever-growing numbers seek to access a dwindling number of available homes.
“The Government needs to accept the folly of a tax system that makes investment in holiday lets more sustainable than long-term homes to rent. We need pro-growth tax measures.
“This should include ending the stamp duty levy on the purchase of homes to rent out, as well as reversing mortgage interest relief changes which have hit the sector hard.”
Research by Capital Economics for the NRLA suggests that removing the 3% Stamp Duty levy on additional home purchases could result in nearly 900,000 new private rented homes in the UK over the next decade. This move is projected to boost Treasury revenue by £10bn over the same period, owing to increases in income and corporation tax receipts.
