Agent wants rental properties to have their own planning class

A prominent independent lettings agency says the typical tenant outside of London now spends 63 per cent of their household income on rent and utilities.

And there agency - Robert Irving Burns - says would-be buyers are now priced out of sales market due to the mortgage crisis and a lack of supply. 

The agency says that despite energy prices having been capped there is now what it calls “a toxic combination of rising costs” for landlords through inflation, increasing demand as would-be buyers are priced out of the mortgage market and a lack of available stock has created a perfect storm in the rental market, which could see rents rise even further in the New Year. 

RIB managing director Antony Antoniou says: “The only real answer to unaffordable rents is that the government must do more – they need to ease the housing shortage and improve the quality of our housing stock. One way to do this is to simplify the planning process and encourage the long-term investment or holding of property by developers. 

“The creation of planning classes or government assistance for properties which are built to let rather than for sale, would de-risk and encourage investment into this sector. 

“House builders are ready and able to address this challenge, but this is the first time in decades where government assistance in that sector has been taken away. The industry could grind to a halt as more and more developers go into administration (up 75 per cent year on year) - due to skyrocketing material and energy costs, planning delays and fiscal uncertainty. The time to act is now.”

Antoniou’s comments follow the latest RICS lettings market snapshot showing tenant demand continuing to rise, evidenced by a net balance of 35 per cent of respondents reporting a pick-up in November. 

Concurrently, the flow of fresh supply becoming available on the rental market continues to dwindle, as a net balance of minus 27 per cent of respondents highlighted a decline in landlord instructions this month. 

Consequently, what RICS calls “the ongoing misalignment between rising demand and falling supply” continues to drive rents higher. A headline net balance of 43 per cent of contributors anticipate rental prices moving higher over the coming three months, although this is relatively moderate when compared to a recent high of 66 per cent back in February this year.