Diagonal view of the bay windows of a row of terraced houses

Categories: government and politics | prs

An alliance of representatives from major private rental sector (PRS) organisations have sent an open letter to the Chancellor of the Exchequer, warning the Chancellor she must increase the supply of rental properties.

Ben Beadle of the National Residential Landlords Association (NRLA), Melanie Leach of the British Property Foundation, and Nathan Emerson of Propertymark have issued a warning to Rachel Reeves that there is a severe deficit in the supply of homes available to rent, and that this has to change.

The signatories of the joint letter have argued that a strong PRS is vital for providing quality, affordable housing. Labour are primarily concerned with reforming the PRS from its foundations, but in the letter the argument is made that there still need to be enough properties on the market for growth to be possible.

The housebuilding agenda

Despite the Labour government’s stated objectives of growing the economy on all fronts, and their intentions to increase the rate of housebuilding across the nation, the PRS often appears to be low on their totem pole of priorities.

Labour have promised to deliver 300,000 new homes per year, but there have been widespread concerns about how realistic this goal is. It has been estimated that 149 new homes will have to be built per hour to meet the target, meaning that it’s close to impossible for them to keep their promise.

Criticism has also been raised against the overall quality of those new build properties being rushed into the marketplace. 

Paying mind to private landlords

Of course, the issue is not limited to building new houses. Keeping stability in the existing PRS housing stock, and providing good incentives for people to invest in buy to let properties, is also important.

The letter’s signatories cited Labour’s legislative budgetary decisions as factors that may lead to fewer PRS properties being available. Of note, they flagged the issue of stamp duty land tax being raised by 1% for landlords.

Increased taxation, on top of reforms to regulation – particularly the planned removal of Section 21 – is applying increasing pressure on private landlords some of whom are selling up and leaving the sector.

As we have reported recently, one of the signatories, Ben Beadle, clashed with Labour on the topic of energy performance targets and the possibility of landlords being forced to hike up rents. Ed Miliband was confronted with Beadle’s warnings on national television, and he largely dismissed them.

Landlord organisations are making their concerns as loud as possible so that the government can hear. However, many individual buy to let landlords may not feel that Labour are truly listening to them.

Providing for foreign workers

Given one of Labour’s goals is to “attract the best talent to the UK”, the letter argues that PRS properties will be needed so that foreign workers have places to stay.

The UK PRS has long been a boon for foreign workers. 42% of the foreign-born population in the UK have residence in private rental properties. Among those that come from EU countries, a sizable 52% rent properties from private landlords.

Compare this to the 16% of native British citizens living in PRS properties, and you get a sense of how vital the sector is to foreign workers.

Relating to this point, the letter contains this stark warning:

We support the Government’s ambition to grow the economy and welcome international expertise to the UK. However, policy needs to back up the rhetoric.

Without substantial support to boost the supply of new, high-quality homes to rent, the Chancellor’s efforts to attract global talent will fail.

We urge the Government to engage with the sector to develop forward-thinking policies that provide the homes to rent the country desperately needs.

We will keep you updated on how Labour respond to these concerns.