The UK faces a looming crisis in rental housing with a shortfall of 1.8m homes expected by 2025, according to a respected body.
The Royal Institute of Chartered Surveyors warned that increasingly unaffordable housing will mean almost 2 million more people looking to rent, whilst increases in taxes for landlords further squeeze supplies.
An increase in stamp duty in April worsened a shortage in supply by causing a sharp drop off in sales of buy-to-let properties, RICS said, reporting that 86 per cent of landlords now say they have no plans to expand their portfolios.
RICS slammed the Government’s housing policies, and said that problems will be further exasperated next year when landlords’ right to deduct mortgage interest from their income tax bill is removed.
The body called for a “much bolder, long-term approach”, including a reversal of the tax hike and a new focus on properties built specifically for residential letting.
This could be achieved by ensuring local authorities release brownfield land for such properties and offering incentives to private sector developers to build them, RICS said.
The recommendations are in stark contrast to David Cameron and George Osborne’s housing policies, which focused almost exclusively on encouraging home-ownership, through taxpayer-funded loans for deposits and so-called starter homes for first-time buyers.
Many analysts have said that the policies simply served to further pump up an already over-inflated bubble.
Jeremy Blackburn, RICS Head of Policy said: “It’s time for Theresa May to get out her hard hat. We are facing a critical rental shortage and need to get Britain building in a way that benefits a cross section of society, not just the fortunate few.”
The drop in sales to first-time buyers showed that Cameron and Osborne’s starter homes policy had “failed to get off the ground”, he said.
Helen Gordon, Chief Executive of Grainger plc, which plans to invest £1 billion in new rental hosing, said: “Build-to-rent can help the Government in five simple ways: by increasing housing supply; by delivering more quickly than other traditional house-building models; through creating new jobs and contributing to town centre regeneration; by providing a better deal to customers including more stability; and by supporting greater flexibility in the labour market.
