Will Jeremy Hunt play the good Samaritan for the PRS?

So next week we get to know how high housing is on the Government’s list of priorities.

As we wait to see Chancellor Jeremy Hunt’s smiling face outside No. 11 Downing Street before he makes his way to the floor of the Commons, I can see very little indication that he’s going to wave a magic wand in the direction of the Private Rental Sector.

And I wonder if Mr Hunt – or any of his colleagues for that matter – realise just how bad things really are.

The Association of Independent Inventory Clerks (AIIC), which I’m proud to Chair, does exactly what it says on the tin: we provide inventory services and (this is the important bit) we are independent.

We side with neither landlord, nor tenant – and we deal even-handedly with both. Because of this unique role, we see the sector objectively.

And what we see is a worsening crisis of supply and demand which has resulted in rents so high that, as far as the Home Counties are concerned, a genuine problem has been created for working people.

Public sector

Take a single person, let’s say they are a teacher in a primary school: the average salary for this person is £34,500 per annum. Their net monthly income is £2,250. Rents of £1600 per month for a two-bedroom flat are already out of reach by the time they’ve paid utilities and council tax.

Let’s think of a nurse, average salary in the UK is £34,916. They may be a single parent. A three bedroom house in suburban Surrey is going to cost them £2500 per month. How can they possibly afford that?

So my question to Mr Hunt is, where are these people expected to live?

And the obvious follow up to that question is going to be, in areas that command these high rents, how are the schools, the hospitals, the police forces, the fire brigades expected to attract staff and function?

Rent rises

These are just public sector examples. The teacher and the nurse both earn substantially more than the average UK wage which is currently just under £30,000 a year. This is a real crisis.

By and large, rent rises – particularly in the South East – have been caused by a shortage of supply and increasing demand.

Rising interest rates have kept would-be home-owners in rental accommodation for longer because they are not able to meet the financial criteria for borrowing.

But that’s just one small part of the problem. The truth of the matter is that landlords have been leaving the sector in their droves.

Figures vary. According to statistics released by HMRC last November, 50,000 unincorporated landlords had left the PRS since 2019.

More landlords

Analysing HMRC’s data, last December, UHY Hacker Young claimed that 70,000 buy-to-let landlords had exited the PRS in the previous 12 months. And they took with them 116,000 properties – lost to the sector forever.

Who knows what the true figure is? But it’s a lot and everyone in the sector knows it.

So what can be done?

This country needs more houses and it needs more landlords. Lots of them.

Developers must be incentivised to build more homes and barriers to growing the housing stock, like planning regulations, must be re-examined.

To attract more landlords, the Chancellor needs to reduce the tax burden and reinstate relief on mortgage interest payments.

Will it work?

I don’t know but we’ve got to try something.

Will he do it?

Probably not. But where there’s life, there’s hope.