Encouraging more landlords into the sector isn’t the way to deal with rental affordability, according to tenant campaign group Generation Rent.
Instead, the group said the answer is simply building more homes in relation to the population.
The conclusion was made after analysing ONS data which found that, across 90 urban areas in England, an increase of 20 homes per 1000 people reduced rent as a proportion of average income by 2.8%.
Dan Wilson Craw, deputy chief executive of Generation Rent, said: “The evidence of the last eight years shows a clear relationship between housebuilding and affordability. Areas where building failed to outpace the local population saw rents rising faster than incomes.
“Importantly, the evidence shows that it’s the building that matters, not tenure. Simply encouraging landlords to buy up existing homes will do nothing to make homes more affordable.
“But policymakers must also recognise that it still takes a lot of building to make a difference to affordability.
“Those of us who are worst hit by the housing crisis are not earning enough to pay in rent what average earners can afford, so the government must do much more to build social homes, and make sure Local Housing Allowance keeps up with market rents.”
Generation Rent looked at rental affordability as a proportion of income – spending 30% or more is considered unaffordable.
Between 2015 and 2023, 70 of 91 urban areas in England saw houses get built at a faster rate than the local population grew. Of these areas, 42 saw affordability improve, with 26 seeing them worsen.
Among 16 areas which saw the housing stock fall as a proportion of the population in the same period, just one area saw rent affordability improve, with the remaining 15 experiencing a deterioration in affordability.
Between 2015 and 2021 85 of 93 urban areas saw the PRS shrink as a proportion of the total housing stock. Of these, 45 areas saw rent affordability improve, while it worsened in 37 areas.
In the seven areas where the PRS grew in that period, rent affordability improved in four and deteriorated in three.
A Generation Rent spokesperson concluded: “There is therefore little relationship between the size of the PRS as a proportion of all homes and rent affordability.
“This is because changes in tenure don’t make a difference to the fundamental factors that determine rents.
“A landlord buying an existing home reduces the number of homes available to owner occupiers, so another would-be first-time buyer household continues to rent.
“While the number of rented homes increases, so does the number of households who have no option but to rent.”
