The number of homes to rent in the UK’s private rented sector has fallen considerably over the last six years with a decline of 11.6% with Scotland seeing a fall of 34.7%, the latest research shows.
The fall in Scotland between July 2011 and June 2017 is described as a major concern that is making it harder for people finding a home to rent, according to the report from Home.co.uk.
The data also shows that over the same period the number of homes for rent in Wales has fallen by 28.1% and in total, seven out of 11 regions saw a fall in excess of the UK wide average.
Numbers fell by 24.6% in the East Midlands, by 20.8% in the South East, by 16.7% in the West Midlands, by 16.5% in the South West and by 11.9% in East Anglia. Areas seeing less of a decline included Yorkshire and Humberside, down by 5.5%, the North West down by 8.5% and Greater London down by 3.9%.
Just one area, the North East, saw a rise in supply, bucking the national trend with an increase of 33.4% in available property to rent. However, the report said that this regional property market has stagnated ever since values plunged after the credit crunch and many vendors resorted to letting out their properties rather than sell at a loss.
The report suggests that demand is rising as a whole generation simply cannot afford to buy and have no choice but to remain in the rental market while recent legislative changes in the buy to let sector means that landlords are selling up or downsizing their portfolios simply to avoid making a loss. This is resulting in falling supply and those that remain in the sector are forced to raise their rents.
Among areas with the largest fall in supply, Wales has seen rents increase by a demand driven 11.3% over the last year and, during the same period, Yorkshire has seen rents rise by 8.4%, the report’s data shows.
In Scotland the last six months have seen an increase of 5.4% in the average rent while in the South West rents are up 5.7% over the last 12 months while in the South East the average rent increase is 0.9% and in the East Midlands the rise over the same period has been 4.5%.
However, in London a more modest dip in supply has seen rents fall by 5.3% over the last 12 months, which the report suggests is due to over investment in the last year, driven primarily by the stamp duty changes.
In the North East there has been a fall of 8.9% over the last six months, indicating that the long term increase in supply of rental properties is having a negative effect on rents, it adds.
‘A barrage of red tape and taxation, at both local and national Government levels, has meant that the supply of rental properties has fallen behind demand in most regions thereby driving up rents,’ said Home.co.uk director Doug Shephard.
‘Record low mortgage interest rates have driven unprecedented investment in the private rented sector over recent years. Simply put, those already with significant home equity have been able to come up with deposits for properties intended to let whilst aspiring home owners are as cash strapped as ever as they pay out huge sums in rent. However, ultra-low interest rates and the associated pain for renters look set to persist for the foreseeable future,’ he added.
