Introduction
Figures published by Zoopla have found that demand for rental homes is at its highest level in over a decade. This increase in demand is compounded by the lack of supply which is driving up prices for those who rent. To demonstrate this, the number of rental homes available to rent is 38% below the five-year average. Whilst rental enquiries are 46% above average. This is causing serious concerns and fears that a growing number of people will be left homeless.
Why is there a shortage of rental properties?
Many amateur landlords have recently decided to withdraw from the rental market. This is because there has been an increasing amount of stringent regulations that private rented sector landlords need to follow. Furthermore, the government has expressed its desire to reduce the number of people renting through the private sector. The problem is that it is becoming more difficult for the general public to purchase their first home in times of economic uncertainty. This has caused house prices and mortgage interest rates to increase. This has resulted in affordable housing becoming more difficult to buy. Therefore, more people are looking to rent a home rather than buy at this time resulting in an increase in demand.
What is the solution to the housing crisis?
In the current economic climate, the housing crisis is made worse by the increasing regulations on private rented sector landlords. This has resulted in more landlords pulling out of the sector reducing the supply or increasing their rent which will make it more difficult for tenants. At this time, increasing the supply of rental properties on the market should be a priority because getting onto the housing ladder is extremely difficult for first-time buyers in the current climate.
Conclusion
To conclude, whilst it is important to get more people on the property ladder and owning their own home. But unfortunately the current state of the economy is driving up house prices and mortgage interest rates. This is making it difficult for first-time buyers to get into the housing ladder. Therefore, more people are choosing to rent and landlords need to be encouraged to put their properties back onto the market to ease the supply shortage.
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