New figures released by The Royal Institution of Chartered Surveyors (RICS) shows that soaring property prices is making homeownership more unaffordable for families.
As such, the report claims that 1.8m more households will be forced to rent by the year 2025.
RICS is calling on the Government to cool financial pressures on investors by introducing tax breaks. In addition, it has called on ministers to shift their focus from supporting homeownership to rebuilding the buy-to-let market.
Data from the report indicates that between 2001 and 2014, the number of UK properties renting a property rose from 2.3m to 5.4m. Further investment has been hit by the changes in stamp duty last April.
The report indicates that as a result of the stamp duty changes, 86% of landlords have no plans to add to their portfolio in the coming year.
An extract from the report reads: ‘RICS is urging the Prime Minister to abandon David Cameron’s previous home ownership focus and reverse April’s Stamp Duty measures in order to address short term rental supply issues. However, they are recommending that Government takes a much bolder long-term approach and pioneers a new build-to-rent sector, with the private sector encouraged to build properties specifically for residential letting.’
‘It would like to see pension funds incentivised with tax breaks to build large scale rental properties with affordable elements. Additionally, local authorities holding brownfield sites should be encouraged to release land for such properties.’
Jeremy Blackburn, head of policy at RICS, added: ‘it’s time for Theresa May to get out her hard hat. We are facing a critical rental shortage and need to get Britain building in a way that benefits a cross section of society, not just the fortunate few.’
Richard Lambert, CEO of the National Landlords Association, believes: ‘The stamp duty surcharge for second home purchases was nothing more than a crowd-pleasing policy from a Government that was dead set on championing homeownership at all costs.’
‘However, it frankly isn’t raising any money for the exchequer, so it makes sense for Mr Hammond to reverse it and give private residential investors the opportunity to help ease the housing crisis. This government should be commended for setting out a programme for building one million homes by 2020 and it needs to put the effort into making sure this is realised. In the meantime we’ve still got a burgeoning renting population that need to be housed right now,’ he concluded.