UK house prices: The UK needs a million more rental homes in the next five years
The UK needs more than a million new rental homes by 2021, a new report has suggested.
The government has a target to build 400,000 new affordable homes for sale over the course of this parliament – but that's ignoring the needs of renters, the research, by Savills, suggests.
Sluggish economic recovery, low interest rates – and, crucially, a 2.8 per cent-a-year decline in the social rented sector, mean private renting grew at a rate of 17,500 households per month in the 10 years to 2014, and is expected to keep rising.
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“Demand for rented homes could still rise more sharply than we have forecast,” said Susan Emmett, director of Savills residential research.
Policies such as Help to Buy, Starter Homes and Shared Ownership may aim to increase the number of homeowners, but Emmett questioned their effectiveness.
“We would question whether policies can accelerate housebuilding enough to see the government’s target of 400,000 affordable homes for sale reached in the timescale set.
"And given the overlap between the different schemes, each focused at similar parts of the market, it is possible that one scheme could simply replace the other rather than providing additional homes."
Experts have warned that a hike to stamp duty on buy-to-let homes, which is due to be introduced in April, may hit renters where it hurts.
Last week the Council of Mortgage Lenders warned the three per cent hike to stamp duty could push up rents, or cause landlords to sell up altogether.
"Given the complexity of the proposals, we suspect that in practical terms the surcharge could cause more problems than it solves," said Paul Smee, the organisation's director general.