Why can’t government policy fix the UK’s shortage of rental properties?

UK rental guarantor service Housing Hand has a deep understanding of the problems faced by the UK’s landlords, letting agents and tenants. The firm has spent the last eight years making the rental process easier and safe for all those involved, through the provision of rental guarantor services that provide peace of mind for landlords, letting agents and renters like. Yet Group Operations Director Terry Mason likens the experience to swimming against the current:

“The biggest problem with the UK rental sector is lack of housing. It’s been the same problem since the end of World War II. Our population has increased by nearly 35% since then, meaning the problem becomes harder to address every year. Without building enough homes to keep up with population growth, any policies aimed at making renting easier and cheaper will be like swimming against the current.”

Terry Mason, Group Operations Director, Housing Hand

The UK’s population has grown from around 50 million people in 1950 to an estimated 67 million today. At the same time, shifting family unit shapes have created even more demand for homes. Yet the number of households living in the private rented sector is falling. In 2016-17, the sector housed 20% of all households. By 2019-20, that figure had dropped to 19%.

“The private rented sector is an essential part of the UK’s housing makeup, but for the last few years the government has made it harder and less profitable to be a landlord or letting agent. Though intended to make renting a home easier and cheaper for tenants, this has simply led to there being fewer landlords, letting agents and rental homes available. The result? Higher rents.”

Terry Mason, Group Operations Director, Housing Hand

The basic economics of supply and demand mean that the only viable solution to solving the UK’s shortage of rental homes – and subsequent increase in rents – is to build at a far greater pace than at present. Zoopla’s latest rental index shows an increase of 4.6% in the cost of renting year-on-year on average to the end of September. Take London out of the data and that increase jumps to 6%. Such rapid rises simply aren’t sustainable.