Encouraging landlords to rent out more homes will not solve the housing crisis, it has been claimed.

Tenant advocacy group Generation Rent says its analysis of local data on rental affordability, local housebuilding levels, population, wages and the number of homes within the private rented sector shows that encouraging landlords with tax breaks to rent out more homes won’t help improve supply.

The organisation, which generally takes a dim view of private landlords for providing ‘overcrowded, unsuitable homes’, says the Government should focus on building more affordable homes to buy and rent instead of encouraging private landlord activity.

Its Deputy Director Dan Wilson Craw (pictured, beow) says: “There’s no clear relationship between the changing size of the private rented sector as a proportion of the housing system and rent affordability.

Rents

“This is because changes in tenure don’t make a difference to the fundamental factors that determine rents.

“A landlord buying an existing home reduces the number of homes available to owner occupiers, so another would-be first-time buyer household continues to rent.

“While the number of rented homes increases, so does the number of households who have no option but to rent.”

Generation Rent looked at changes in housing stock, population, rent and income data for 90 metropolitan areas around England since 2015.

Reduced

“Overall, an increase of 20 homes per 1000 people reduced rent as a proportion of average income by 2.8 percentage points,” says Wilson Craw.

“The data also shows that there is no relationship between rent affordability and the size of the private rented sector (PRS) as a proportion of all homes, casting doubt on the claims of some - the National Residential Landlords Association (NRLA) and Reform UK - that encouraging landlords to buy more properties would help.”

Ben Beadle (pictured), Chief Executive of the NRLA, tells LandlordZONE: “The only way to improve the affordability of rented housing is by addressing the root causes of higher rents. As the Bank of England and the Institute for Fiscal Studies have noted, this is a result of growing costs on the sector, including high taxes, and a lack of supply to meet demand.

“Based on current levels of demand, Rightmove suggests that around 120,000 more rental properties are needed to bring rent growth back to more normal levels of around two percent a year.”

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