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Government admits 'PRS is in trouble' for first time as supply dwindles

lord truscott landlords renting prs

The government has admitted that the PRS is in trouble but remains bullish about its efforts to create more housing.

In response to a written Parliamentary question, Housing Minister Baroness Scott of Bybrook said it recognised that demand was outstripping supply after Lord Truscott pointed to a Zoopla report showing that the number of available rental homes had fallen by a third in 18 months, and asked what was being done.

'The reasons for this are difficult to disentangle, but we believe it is due to a mixture of demographic changes, including domestic and international migration, and pent-up demand following the pandemic,'� said Baroness Scott.

She insisted the government was driving up the supply of new homes by diversifying the market, investing in affordable housing, and increasing land supply for new homes by investing in infrastructure.

'We also remain committed to'�continue working towards our ambition of delivering 300,000 homes per year to help create a more sustainable and affordable housing market.'�

Stood back

Zoopla research chief Richard Donnell (pictured) questioned whether the government has stood back and reviewed the impact of its collective policies on the supply of rented homes and landlords' decisions.

richard donnell

'They were keen to level the playing field with first-time buyers in 2016 and make it less attractive at a time when they were squeezing what people could put into their pensions,'� he tells LandlordZONE.

'Anyone would agree with the pursuit of better-quality homes, but now higher mortgage rates have hit landlords' business plans on top of these other costs.

"This means landlords are making perfectly rational decisions and static supply means new entrants are being offset by those leaving the sector or rationalising their portfolios.'�

Donnell predicts that rental stock levels will remain flat at 5.4 million for the next few years while landlords reassess portfolios as they refinance, and more regulations are introduced.

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