The National Residential Landlords Association (NRLA) has warned that a lack of available rental homes will undermine plans by the UK’s major political parties to reform the rental market.
The Conservatives, Labour, Liberal Democrats, and Green Party all propose ending section 21 ‘no explanation’ repossessions, but none adequately address the chronic shortage of homes for private rent.
Recent research indicates that an average of 15 renters are competing for each available property, driving up rents across the market. The Royal Institution of Chartered Surveyors has highlighted a “huge mismatch” between supply and demand, with renters facing “ever-rising living costs and plummeting affordability levels.”
Without bold measures from the next government, the situation for tenants is expected to worsen. Savills warns that up to one million new homes for private rent will be needed across England and Wales by 2031 to meet demand.
The NRLA attributes the supply crisis to uncertainty over sector regulation and rising costs, including tax hikes since 2015. The Institute for Fiscal Studies notes that these tax changes have stunted market growth and led to higher rents.
The NRLA is calling for clear regulation of the rental market. When section 21 repossessions end, it needs to be replaced with a system that provides landlords with robust grounds for possessions in legitimate circumstances and ensures a swift process.
Additionally, research by Capital Economics suggests that scrapping the 3% stamp duty levy on the purchase of additional homes could make nearly 900,000 new long-term rental homes available over the next decade, boosting Treasury revenue by £10bn due to increased income and corporation tax receipts.
The NRLA is also advocating for the stamp duty levy to be scrapped for landlords who bring long-term empty homes back into use.
Ben Beadle, chief executive of the NRLA, said: “Renters are being let down by a repeated failure to address the rental housing supply crisis.
“The lack of choice serves only to drive up rents and, given the shortage of alternative accommodation for them to move to, makes it harder for renters to hold rogue and criminal landlords to account.
“We will work with the next government to ensure the replacement for section 21 works for the sector as a whole. However, greater security for renters will mean nothing if they cannot find homes to rent in the first place.”
