Even if the government’s target of building 400,000 affordable homes during the course of this parliament is met, demand for rental properties will still be so high that an additional 200,000 properties will be required each year, Savills said.
Susan Emmett, director of Saville’s residential research, said that demand could still rise even more sharply than the estate agent has predicted.
The private rented sector has been growing by an average 17,500 households per month over the 10 years to 2014, according to the English Housing Survey.
A combination of house price inflation over wage growth and the social rented sector shrinking by 2.8% in the past five years, has pushed many households into private renting as homeownership becomes a more distant reality.
To ease the burden on the private rented sector, the government has launched the Starter Homes scheme, a greater number of shared ownership homes and the Help to Buy London scheme to help more people onto the property ladder.
“We would question whether policies can accelerate housebuilding enough to see the government’s target of 400,000 affordable homes reached in the timescale set. And given the overlap between the different schemes, each focused at similar parts of the market, it is possible that one scheme could simply replace the other rather than providing additional homes,” Emmett said.
“This analysis demonstrates that we still need to provide a substantial number of homes for rent. Government policy should focus on supporting the development of new homes to rent as well as to buy.”
Savills said the 3% surcharge levied on buy-to-lets and second properties from 1 April will reduce the amount of rental properties, and limit the ability of private investors to expand their portfolios.
The National Landlords Association (NLA) estimated landlords will sell 500,000 properties in the next year, with another 100,000 sold annually until 2021.
Figures from the NLA’s Quarterly Landlord Panel Survey, show 28% of landlords do not plan to buy any more properties, 10% plan to reduce their portfolio and 5% plan to sell up completely. The proportion of landlords looking to sell has more than doubled since last July, increasing from 7% to 19%.
In a response to the government’s consultation paper into the higher SDLT charges, Paragon Mortgages said the changes risk ‘distorting’ the housing market. The specialist lender added that the changes will affect those who cannot afford to or want to buy the most, as limited supply will drive up rents and limit choice for tenants.