Agency slams government for failing to boost rental supply

The way to solve the rental sector supply shortage is through Build To Rent, a leading agency claims. 

Leaders Romans Group says the shortage is hurting tenants by escalating rents - up 17 per cent in the past year in London, with Manchester, Birmingham, Bristol and Sheffield all up between 12.4 and 15.6 per cent annually. on 2021. 

LRG’s group director Andy Jones says: “Supply and demand is at the root of the problem: the stock of homes for rent is down 38 per cent in comparison to the five-year average, mostly due to many landlords withdrawing from the market. As mortgage rates increase and a potential recession looms, many would-be first time buyers are delaying purchasing a home, which is exacerbating the problem.

“The solution to meeting demand is increased investment in quality rental stock. Fortunately the signs are positive. Research among global institutional investors has found that 70 per cent anticipate being active in the suburban Build to Rent market within the next five years: a substantial increase from the 42 per cent currently active.”

He continues: “The problem will also be helped by more rental properties being provide outside cities such as London, Manchester and Birmingham. Suburban BTR is key to meeting growing demand. In contrast to traditional BTR, this new iteration focuses on the areas of rapidly growing demand: family homes in suburban locations. 

“BTR suburban communities also offer levels of service and flexibility above that available through home ownership and frequently property maintenance, wide ranging amenities and the flexibility for a tenant to move with ease from one unit to another as their requirements change. So solutions to the crisis exist in the form of new opportunities and investor interest.” 

But he says while solutions are at hand, what is lacking is government support. 

Jones concludes: “The government, in its [2022] White Paper [on the rental sector] committed to raising standards in the private rented sector. And so it is disappointing that the long-promised Renters Reform Bill is delayed; also that new planning guidance published for consultation in December, failed to make any mention of BTR.

“Government support is the missing piece of the jigsaw and once in place, could ease the growing difficulties.”