Warning over critical rental shortage in the UK

Thu, 06 Oct 2016

The Royal Institute of Chartered Surveyors (Rics) has warned that the UK faces a "critical rental shortage".

The body estimates that by 2025, there will be at least 1.8 million more households in the UK looking to rent, and called for more to be done to encourage the construction of new homes.

Rics said that in 2001, there were 2.3 million households renting property, with this rising to 5.4 million by 2014.

It blamed a range of factors, including changes to the stamp duty surcharge in April, which has caused a lack of sales of buy-to-let properties. People purchasing a home that is not their main place of residence have to pay a 3 per cent stamp duty tax, while the Lands and Buildings Transaction Tax (LBTT) - which is applied in Scotland - also increased, harming landlords.

Consequently, Rics is calling for the stamp duty changes to be reversed. In addition to this, it called for private house builders to receive greater encouragement to construct homes just for the rental sector.

Meanwhile, 86 per cent of landlords do not intend to increase the size of their rental portfolios in 2016, with Rics expecting this stance to remain for at least the next five years.

Jeremy Blackburn, head of policy at Rics, said: "The private rented sector became a scapegoat under the previous Prime Minister, and because of that it suffered. Yet with increasingly unaffordable house prices, the majority of British households will be relying on the rental sector in the future.

"We must ensure that it is fit for purpose, and the Government must put in place the measures that will allow the rental sector to thrive. Any restrictions on supply will push up rents, marginalising those members of society who are already struggling."

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