The proportion of private landlords who report increased demand for rental properties has more than tripled compared with demand for properties seen pre-Covid pandemic, according to independent research for the National Residential Landlords Association (NRLA).
The study, conducted by the research consultancy BVA-BDRC, found that 71% of landlords reported increased tenant demand in Q3 2023, a record high. This is up from 65% the same time last year, and 22% in Q3 2019 before Covid lockdown measures were introduced by the government.
The survey also revealed that demand from renters is strongest in the West Midlands, where 76% of landlords reported increased tenant demand, followed by 75% saying the same in Wales and 74% in the South East (excluding London).
Despite record demand, 12% of landlords surveyed said they sold property in Q3 2023. This is more than double the 5% of landlords who confirmed they purchased property in the same period.
Similarly, 28% of respondents said they plan to cut the number of properties they rent out over the next 12 months. This contrasts with the 8% of landlords who plan to increase the number they let over the coming year.
The NRLA warns that the ongoing supply-demand imbalance will continue to erode the purchasing power of tenants. Crucially, this will put any gains which result from the chancellor’s decision to unfreeze housing benefit rates at risk.
In addition, without measures from the government to support the supply of private rented housing, tenants will continue to struggle to hold rogue and criminal landlords to account given the shortage of alternative accommodation across the sector, according to Ben Beadle, chief executive of the NRLA.
He said: “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 found that removing the 3% stamp duty levy on the purchase of additional homes would see almost 900,000 new private rented homes made available across the UK over the next ten years. As a result of increases in income and corporation tax receipts, the modelling suggests this would lead to a £10bn boost to Treasury revenue over the same period.
