The UK will need an extra 1.8 million rental homes by 2025, according to new research by the Royal Institution of Chartered Surveyors (RICS).
This could trigger a crisis in the housing market, as the majority of landlords don’t currently intend to expand their portfolios.
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Britons priced out of buying homes
RICS predicted the rise in the number of people looking for rental properties as buying a home in the UK is becoming ‘increasingly unaffordable’.
The number of UK households renting has doubled since 2001, from 2.3 million to 5.4 million in 2014, and the number is still rising.
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Should buy-to-let landlords expand?
The research also found that 84 per cent of landlords are not intending to expand their portfolios this year.
However, given the forecasted increase in demand for rental properties over the next decade, it could well be a good time for landlords to acquire more properties or consider increasing rent.
The hurdle is that changes to tax are putting landlords off, as the surcharges for stamp duty land tax on buy-to-let properties and reduction in tax relief are increasing the financial burden on them.
Time to incentivise owning rental properties?
To combat these potential downsides to being or becoming a landlord, RICS has urged the government to back a ‘buy-to-rent’ scheme, where houses would be built for the explicit purpose of being bought by landlords.
They also suggested that the rise in stamp duty should be reversed.
Helen Gordon, chief executive of residential property business Grainger Plc, believes a build-to-rent scheme would increase housing supply more quickly than current building schemes and would offer tenants more stability.
Additionally, Grainger said they planned to invest over £1 billion in ‘high quality, long term rental housing’ by 2020.
Will you change your plans based on these findings? Tell us in the comments.