A report, authored by economics consultancy Capital Economics and commissioned by the National Residential Landlords Association (NRLA), has shown the stark shortage in the supply of rented homes across the UK and its capital city.
Read more: Chestertons: Rental properties in London down 42%.
The government had earlier stated that 340,000 homes a year must be built in UK by the middle of this decade to meet future demand.
If owner occupied and social rented homes in the UK continue at their 10-year average rate of growth, private rented sector supply would have to increase by 227,000 properties per year to meet government targets, Capital Economics said.
Supply must be able to meet the needs of an anticipated 1.8 million new households over the next 10 years.
The report also considered in its projections government figures that show the supply of private rented housing in London has fallen by 85,000 over the past five years.
Read more: NRLA: Private sector tenants leaving London.
Considering that many private home renters are young people who left home or school, demand will continue to increase as the population group of those aged 15–24 is expected to grow by almost 12% between now and the year 2030.
Additional survey data by research consultancy BVA-BDRC suggests that, in Central London, 74% of private landlords saw an increase in demand for homes to rent in the fourth quarter of 2021. This was up from the 54% recorded in the previous quarter.
Capital Economics said that in order to meet targets for housing supply, the Treasury needs to encourage investment in the sector. This includes increasing the rate of new builds and switching commercial property to residential use.
The report also highlighted the contribution the sector can make in moving stock from short-term to long-term lets and bringing empty homes back into use.
“As the demand for private rental properties picks up following the pandemic, renters across the capital will struggle to find the homes they need and want. For all the efforts to support homeownership, the private rented sector has a vital role to play in housing so many Londoners,” Ben Beadle, NRLA chief executive, said.
“Today’s analysis demonstrates the folly of the mayor’s calls for rent controls in the capital, a policy which would serve only to freeze investment in the very homes renters need,” Beadle said.
