03 Mar 2022
A new calculation suggests London needs almost 85,000 new private rented homes a year to meet its housing needs.
And it adds to the evidence that rent controls, as advocated by London Mayor Sadiq Khan, would drive out landlords just as the capital needs more.
The 85,000 figure comes in a report, authored by economics consultancy Capital Economics and commissioned by the National Residential Landlords Association, and is based on government targets which state that 340,000 homes a year must be built across the UK by the middle of this decade to meet future demand.
Capital Economics says if owner occupied and social rented homes in the UK continue at their 10 year average rate of growth, private rented sector supply would have to increase by 227,000 properties per year to meet government targets.
Growth on this level is also needed if supply is to meet the needs of an anticipated 1.8m new households over the next decade.
In the case of London, the capital would require approximately 83,000 new rental properties a year over the next decade.
Ironically the assessment comes as government figures show that the supply of private rented housing in London has fallen by 85,000 over the past five years.
Capital Economics sets out how, in order to meet targets for housing supply, the Treasury needs to encourage investment in the sector.
Greater investment would, it argues, support the provision of new housing in a number of ways. This includes, increasing the rate of new builds and switching commercial property to residential use. Likewise, the report points to the contribution the sector can make in moving stock from short term to long term lets and bringing empty homes back into use.
NRLA chief executive Ben Beadle says: “As the demand for private rental properties picks up following the pandemic, renters across the capital will struggle to find the homes they need and want.
“For all the efforts to support homeownership, the private rented sector has a vital role to play in housing so many Londoners.
“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.”
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