The Government needs to direct its housing focus on the rental sector, which is facing a severe shortage of homes available to tenants, according to a leading industry group.
The Royal Institution of Chartered Surveyors (Rics) said the Government urgently needs to deliver almost two million new rental homes for families.
This is because the number of people renting is expected to rise by 1.8 million by 2025, as soaring house prices continue to make home ownership increasingly unaffordable.
However, Rics estimates that 86 per cent of landlords have no plans to expand their rental portfolio this year, mostly due to recent stamp duty changes that mean landlords have to pay an additional three per cent surcharge.
This lack of buying will lead to a severe shortage of rental properties, said Jeremy Blackburn, head of policy at Rics.
“The majority of households will be relying on the rental sector in the future. We must ensure that it is fit for purpose, and the Government must put in place the measures that will allow the rental sector to thrive,” he said.
Some 7 million households will be privately rented by 2025, according to estimates from PwC. This would be almost one in four of total UK households.
The Chancellor, Philip Hammond, unveiled a £5 billion fund yesterday that promised to increase housebuilding. At the Conservative conference in Birmingham, Mr Hammond said a £2bn fund would be set up to speed up building by using public land. Meanwhile a £3bn loan pot will be available for the smaller housebuilders frozen out of the market by a lack of bank funding since the financial crisis.
The Government also plans to relax planning rules with a presumption in favour of residential development.