A new report suggests the supply of privately rented homes has slumped to its lowest point in ten years. This decline comes amid concerns that recent government budgets have overlooked urgent housing needs, focusing instead on measures aimed at bolstering the homebuying sector.
Zero Deposit’s analysis of government data illustrates a troubling trend affecting England’s rental sector. Privately rented properties, which form a crucial part of the housing market, are now a diminishing share of the total housing stock. Currently, there are approximately 4.9 million privately rented homes across England, a modest increase from 4.5 million a decade ago but still not enough to meet surging demand.
This situation is the result of sustained government focus on initiatives to stimulate home buying, with comparatively scant attention paid to the private rental sector. This imbalance has not only made it tougher for tenants to find suitable accommodations but has also led to a significant spike in rental costs.
Rising Rents and the Struggle to Keep Up
The financial strain on tenants has reached unprecedented levels. Zero Deposit’s research indicates that the average rent across England now stands at a staggering £994 per month. This represents a 5% increase in just the last year, with an overall 37% rise over the past decade. Alarmingly, forecasts suggest a further 16% hike by 2030, exacerbating the affordability crisis for renters.
Over the past five years, the growth in privately rented stock has been lethargic, increasing by a mere 2.4%, while the number of owner-occupied homes surged by 5%. This disparity has led to privately rented properties making up only 19.4% of all homes in England—the smallest slice of the housing pie seen in a decade.
A Regional Perspective
The crunch in rental housing supply has hit some regions harder than others. Yorkshire and the Humber, the South West, the East of England, and the North West are experiencing their lowest levels of privately rented homes in relation to total housing stock in over a decade. Meanwhile, London and the North East stand out for having seen a steady increase in the proportion of rental homes, despite London’s status as the region with the highest rents in England.
Sam Reynolds, CEO of Zero Deposit, voices a stark warning: “We may have seen a consistent increase in the volume of privately rented homes reaching the market over the last two decades, but today’s market is dominated by a chronic undersupply of rental properties despite an overwhelming level of tenant demand. This market imbalance has been one of the key factors that have caused rents to spiral beyond the realms of affordability and it’s a clear indictment of multiple cabinets that this issue has continued to worsen. Over the last five years, in particular, the supply of owner-occupied homes has increased at a far greater rate than privately rented properties and renters will be forgiven for thinking that the Government is more focussed on homeowners than the real issues facing tenants today.”