Generation Rent says ‘homes, not landlords’ is the key to rent affordability

"Of course it is true that building more homes will also help keep rents down."

This may or may not be true. Rents are driven up now by the cost of providing rented accomodation.

If the new build homes remain expensive for landlords to purchase maintain and , licence run and pay taxes on rents will stay high to meet the costs - or landlords won't buy them (and rented accomodation will not be available for those who can't afford to or don't want to buy .

It is as simple as that .

More properties may mean more supply yes, but increasing build costs and regs = they cost more to buy (or rent).

Housebuilders only build in earnest if they know they can sell quickly and move on to the next development. If they can't foresee this they won't bother as a long drawn out development just increases costs. Quick build, quick sell and move on is always the aim.

Ergo the claim that rents are more 'affordable' where there are more houses built is ONLY true if the economic conditions are right to facilitate this in the first place.

Good on Generation Rent for pointing out the core problem with UK housing. In the South at least, there is a supply-demand problem that will continue to drive up rents to the max of affordability unless more houses are built in areas where tenants also want to live.
The new gov't is making many noises about trying to build more, but this is much harder than it looks. Good luck to them though, it is desparately needed.
If the new gov't also continue to play on the politics of resentment and make life more difficult for landlords, this will simply reduce supply and drive up rents further. Those of us who are well-capitalised will do well out of this scenario, as we have seen in Scotland. Weaker landlords will drop out. This is how the rich get richer.

Reply to the comment left by David Mensah at 03/08/2024 - 14:55
You hit the nail on the head David and there is clearly a shift on the horizon as smaller private landlords either
1) evict tenants ad sel to owner occupiers
or
2) sell at discount a price with tenants in situ to larger corporote landlords and investors
or
3) raise rents to match those of the corporate investors, up their game and stay in business.
or
4) go bankrupt and are repossessed.

3 is not attractive to those who have close relationships with their tenants

It s a tricky sector and it seems politicians of both parties don't seem to get the subtleties of how it works - and are likely to take actions that bring about negative consequences they never intended.