London needs at least 83,000 new private rented homes a year to meet its housing needs, new research has found.
The Capital Economics report, commissioned by the National Residential Landlords Association (NRLA), bases its findings on government targets which outline how 340,000 homes a year must be built across the UK by the middle of this decade to meet future demand. This is despite government figures revealing how the supply of private rented housing in London has fallen by 85,000 during the past five years.
Capital Economics reports that, if owner occupied and social rented homes in the UK continue at their ten-year average rate of growth, private rented sector supply would have to increase by 227,000 properties annually to meet government targets. This growth is needed if supply is to meet the needs of an anticipated 1.8 million new households over the next ten years. In London, the number of 15-24-year olds is forecast to grow by more than 120,000 (almost 12%).
Additional survey data by the research consultancy BVA-BDRC suggests that, in central London, 74% of private landlords saw an increase in the demand for homes to rent in Q4 2021 – up from 54% in Q3.
Capital Economics believes that to meet targets for housing supply, the Treasury needs to encourage investment in the sector, including increasing the rate of new builds and switching commercial property to residential use, moving stock from short-term to long-term lets and bringing empty homes back into use.
NRLA chief executive Ben Beadle says that for all the efforts to support homeownership, the private rented sector has a vital role to play in housing so many Londoners. He adds: “Today’s analysis demonstrates the folly of the mayor’s calls for rent controls in the capital, a policy which would serve only to freeze investment in the very homes renters need.”