Private Rental Market Has Fallen
The proportion of income spent on rent in the private rental market has fallen from 35.4 per cent in 2010/11 to 32.9 per cent in 2017/18.
Including income from housing benefit, over the same period the amount of income used for rent by social tenants increased from 26.7 per cent to 28 per cent.
The figures from the English Housing Survey for 2017/18, highlighted by the Residential Landlords Association, show that over the ten years between 2008/09 and 2017/18, average weekly rents across England (excluding London) in the private rental market increased by 22 per cent, nearly half the increase of 43 per cent in rent in social housing sector. In London, private rents increased by an average of 34 per cent compared to 55 per cent in the social sector.
The figures come as the Office for National Statistics has reported that rents are falling in real terms and the Government’s 2018 survey of landlords found that 70 per cent kept their rents the same when they most recently renewed a tenancy showing that landlords prioritise keeping good tenants for a long term.
The RLA is warning of the risks now posed to improved affordability in the private rented sector as a result of changes such as those to benefits and increased taxation driving landlords out of the market.
The Government’s data shows that over 15 per cent of private landlords in England, representing more than 23 per cent of all tenancies in England, plan to either decrease the number of properties they let or leave the market altogether. Of this group, almost 70 per cent said it was due to legislative changes, including the phased reduction of mortgage interest relief to the basic rate of income tax and the 3 per cent stamp duty levy on investment in new rental housing.
This reduction in the supply of private rented housing comes at a time when demand for new rental housing shows no signs of abating with the Royal Institution of Chartered Surveyors saying that demand “remains more or less steady.”
Alan Ward, Chair of the Residential Landlords Association said:
“This data shows that the private rental market is becoming more affordable, demonstrating the folly that forms of rent controls would be. We cannot however be complacent.
“The danger signs are there. Tax increases are choking the supply of homes to rent. Landlords like to keep their tenants who benefit from lower or no rent increases when tenancies are renewed, but fewer homes for rent means less choice for new tenants.
“We need positive, pro-growth taxation that supports landlords investing in the new homes to rent the country desperately needs.”