A desperate shortage of rental properties has left tenants struggling as one letting specialist blames government policies

Rents across Britain rose by an average 6.7 per cent year-on-year in February 2022, according to Hamptons, while rents in the North rocketed by 9.6 per cent. As the cost of living crisis deepens, Hamptons estimates that the average tenanted household will spend a record 54 per cent of their post-tax income on rent and bills this year.

This equates to an extra £1,008 each year, with the total amount they spend on annual rent and bills set to rise to £17,914. While those in Southern regions are seeing some respite with rental growth cooling, in the Midlands and North it is picking up pace due to a supply and demand issue.

Will Linley, chairman of letting specialist Linley & Simpson, which has more than 20 branches across Yorkshire and the Humber. He says: “Matching supply with demand has always been a constant see-saw challenge for letting agents. Yet the current imbalance is among the widest we have witnessed since we launched 25 years ago. This situation has long been predicted and is the culmination, and inevitable consequence, of a number of Government interventions over several years.”

He cites the fact that landlords have been hit hard by increases in income tax and higher stamp duty rates, combined with a raft of recent compliance and legislative measures. “The canary in the coalmine sounded loud and clear a number of years ago about the impact all this would have but the warning was ignored,” says Will. “This double whammy has now resulted in fewer new landlords entering the market and some existing ones deciding to exit it.”

He says that extra costs faced by remaining landlords have translated into climbing rents for tenants He adds: “In many sectors, when there is a spike in customer demand for a product, you can quickly respond by simply stepping up the production line to meet it. Yet this is not a short-term fix open to the lettings industry as the solution is far more deep-rooted and long-term.It’s a challenge not dissimilar to that now facing the motor industry, where the shortage of new cars has seen the second-hand car market rocket.”

There is little hope on the horizon at the moment, according to Will, who says it is inevitable that the gap between spiralling rental demand and dwindling supply will widen further without urgent action at the highest level to drive through positive, sustainable change.

He believes that an increase in the supply needed now will only happen with new incentives to encourage more landlords to invest in buy-to-let. He would like to see the Government halt the run of increased tax burdens that has dampened the investment appetite of many private landlords, who he believes hold the key to unlocking more supply.

While hopes have been pinned on large build-to-rent developments funded by institutions, including pension funds, Will says that the jury is out as to whether this is remedy for the sector’s supply problems. He said: “Here in Yorkshire, as in many parts of the country, there seems to be over-optimism that build to rent can deliver the right type of homes in the right location at the right price to meet the right needs. The focus on high-rise city centre towers of 20 storeys with largely one and two-bed apartments commanding premium fees is at odds with where the real boost is needed, which is helping families to rent bigger homes in the suburbs, close to schools.

“Neither does it match the needs of Yorkshire’s growing, ageing population. Let’s remember the number of over-50s renting has soared at breathtaking rates across the UK in the last decade. There are over 1.2m ‘silver tenants’ now, which is double the total just a decade ago.”

Will also points out his belief that the Government should focus on delivering significantly higher numbers of social housing to address the huge under-supply in that sector.“The lack of social housing is driving tenants into the private rented sector, when they ought to be catered for through social housing providers.”

The scale of the supply shortage is highlighted in new research, which has shown that almost five million households are in the private rented sector, which is more than double the number at the turn of the millennium, showing a shift towards renting for life rather than buying.

Will Linley says: “More people are seeing renting a home as a lifestyle choice, rather than a stepping stone to home ownership. Almost two in four tenants now rent the same home for over five years. Sadly, for the ever-growing number of Yorkshire people looking to rent, the dominant theme for 2022 will again be limited choice to meet their needs unless action is taken to reverse the shortfall of available stock.”

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