A rental sector that works for all: The NRLA's key asks for the next government

Introduction

The UK rental market is in the midst of a supply crisis with an average of 15 applicants for every available property, putting upward pressures on rents and reducing tenant choice.

Despite soaring demand for new homes to rent, many landlords are choosing to exit the market. Our research shows this is largely due to a hostile tax environment, high mortgage interest rates and concerns about the impact of future regulation.

This is already impacting supply. Zoopla reports that the number of available homes to rent is 33% lower than before the pandemic. The value of new buy to let lending has dropped by 55% in the last year. Off plan sales to investors has also dropped off sharply, reducing the speed at which some housebuilders are completing new homes.

Without immediate action to improve landlord confidence this supply and demand imbalance will only get worse. Already, three times as many landlords intend to reduce the number of homes they let out compared to those who plan to expand their portfolios.

Solving the housing crisis will be challenging. Doing it without the support of landlords will be impossible. The private rented sector is an essential part of our housing mix, providing a springboard into home ownership and important flexibility for our labour market.

The NRLA is committed to working constructively with the next government to promote a private rented sector that provides good quality homes to satisfied tenants. With that in mind, we have set out a number of key asks for the next Government to support responsible landlords and promote investment in providing the homes needed. 

These key asks are centred on three key themes -

• The need for a long term stable housing strategy that recognises the valuable contribution of responsible private landlords;
• Providing the homes that are needed, where they are needed by increasing tenant choice and reducing barriers to investment; and 
• Ensuring that rental reform works for landlords and tenants alike.

A long term stable housing strategy

We are calling on the next government to develop a long term strategy for housing. This strategy must provide a clear plan for:

1. Increasing the number of homes of all tenures, including for private rent
2. Making homes fit for the future. There must be clear and achievable timeframes for meeting new energy efficiency and property standards.
3. A robust Universal Credit system. This would reduce incidences of rent arrears, and make it easier to discuss claims and apply for direct payments
4. Ending the postcode lottery of local authority enforcement. Ensure local authorities have the resources and support to properly enforce against the small number of rogue landlords.

Providing the homes that are needed, where they are needed

To ensure landlords can provide the homes people need, we are asking the next Government to:

1. Reintroduce mortgage interest relief. This will allow landlords to offset some of the costs of interest rate rises and reduce the need to increase rents or sell up.
2. Give tenants more choice about where to rent. Commit to annually uprating the Local Housing Allowance to the 50th percentile of local market rents.
3. Reduce the need for temporary accommodation. Introduce a long leasing scheme in England. This would enable private landlords to lease properties long term to local authorities in exchange for access to funding for property improvements.
4. Help landlords to support the construction of new, energy efficient homes. Remove the stamp duty surcharge where the new property adds to the net housing supply.
5. Remove planning barriers. Make it easier to turn commercial spaces into residential properties, bring empty homes back into use, or convert larger dwellings into smaller and more affordable homes.

Rental reform that works for landlords and tenants

We are calling on the next Government to ensure that rental reform includes:

1. Comprehensive possession grounds that reflect why landlords need to seek possession. This should include allowing landlords to sell, or to bring the property up to new regulatory standards.
2. Properly funding the courts. Possession claims need to be dealt with fully within 15-18 weeks across all regions.
3. Developing a new Decent Homes Standard for all homes. This would ensure all homes are free of category 1 hazards, in a good state of repair and meeting statutory energy efficiency requirements.