England, Wales, Scotland & Northern Ireland
UK Housing News
Rental market supply crisis fuelling mental health emergency, survey suggests
Exclusive data from Cornerstone Tax reveals that almost 50% of young tenants fear that they will be stuck renting for the rest of their lives
David Hannah, Group Chairman of Cornerstone Tax, discusses how the government ought to prioritise the rental market ahead of the Spring Budget
A recent study from the London Renters Union has found that one-in-three renters felt that private renting was negatively impacting their mental health, with three-in-five renters saying they felt depressed about paying their rent. This comes in light of exclusive data from Cornerstone Tax, the UK’s leading property tax advisory, which reveals that 43% of tenants aged between 18-24 cite being stuck renting for the rest of their lives as their most significant anxiety. Amongst millennials, this number jumps up to 47%. According to David Hannah, Group Chairman of Cornerstone Tax, the current plight of renters can be attributed to a private rental sector that’s long been plagued by a burgeoning supply crisis.
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43% of tenants aged between 18-24, and 25-34, cite being stuck in the rental sector for the rest of their lives as their biggest anxiety
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47% of tenants aged between 35-44, cite being stuck in the rental sector for the rest of their lives as their biggest anxiety
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25% of tenants aged between 18-24 have lost out in a bidding war over the past two years
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15% of buy-to-let landlords across the country are considering selling up due to the rising costs associated with their property
Cornerstone’s research has revealed that 15% of buy-to-let landlords from across the country are considering selling up due to the rising costs associated with their property. According to UK Finance, buy-to-let loans amongst over-55s fell from 16,930 in the final quarter of 2022 to 7,980 in Q4 2023, with landlords citing higher interest rates and the ongoing cost-of-living crisis as the most significant factors towards their decision to divest from the rental market. The Bank of England’s long battle with inflation has resulted in the current base rate of interest to sit at its highest level in over fifteen years, at 5.25%.
According to David Hannah, the pressure currently exerted on landlords and the lack of relief from the treasury has resulted in an unfortunate downward spiral where tenants ultimately feel the brunt of increased borrowing costs and unrelenting tax burdens. Ahead of the Spring Budget, Hannah calls for the government to prioritise the overheated private rental sector, making the market work again for tenants and landlords alike through the creation of new incentives, as well as an overhaul to the current stamp duty regime.
David Hannah, Group Chairman of Cornerstone Tax, comments:
"Our data highlights a clear issue in the UK's rental market, many of these landlords took out mortgages on buy-to-let schemes during a period of sustained low interest rates; fast forward to 2023 and the pressure currently facing landlords is simply too much. Spiralling interest rates and the highest tax burden since the second world war have forced thousands of landlords to sell up, which then puts further pressure on renters due to a lack of stock.
This crisis could be eased by removing the second home surcharge from bona fide private rental sector investors giving them a reduction in their acquisition costs and also reinstating full relief for mortgage interest payments in common with other businesses that have to borrow money to provide their services.
This double measure would have both reduced the costs of purchase, whilst allowing landlords to freeze, or even potentially cut, rents which have had to have both these penal measures “costed in” over the last few years. It would also stimulate purchases in the market at a time when owner occupiers are unable to purchase because of affordability issues.”
David Hannah, Group Chairman
