Members of the specialist finance industry have called on the government and mortgage market to further support social housing and other tenures following the latest data released by Shelter.
Earlier this week, research by Shelter revealed that one in two working private renters in England (3.2 million adults) wouldn’t have enough in savings to pay their rent for more than one month if they lost their job.
In addition, a staggering 2.2 million renters (34%) would be immediately unable to pay rent from their savings if they were left unemployed.
The number of tenants one paycheque away from being unable to pay rent has risen by 31% in just two years.
The housing and homelessness charity claimed these are some of the worst results it has recorded since before the pandemic.
Consequently, the organisation has urged the government to build more social homes.
According to Shelter’s latest YouGov poll, 55% of private tenants have seen rent hikes over the past year, with 2.1 million (37%) now struggling or behind with their payments.
Sam Norris, managing director at Grand Union Finance, commented on the research: “The data from Shelter, although concerning, is unsurprising.
“The challenges in the UK economy right now have meant that not only is the surplus income of the average UK citizen being squeezed massively, but landlords, in the main, are being forced into raising rents to contend with their own rising costs.
“One thing for me that this throws into question is why the UK mortgage sector is not supporting social housing,” he said, claiming that the majority of lenders were not willing to lend on properties let by private landlords to social housing providers, such as Serco.
“The statistic from Shelter just shows that so many more people are going to be forced to rely on this [area] of the property market in the coming months and years, so mortgage lenders need to get wise to this and stop turning their back on helping those who wish to support the social housing market.”
Eugene Esterkin, managing director at Affirmative Finance, added: “The solution so far as Shelter is concerned is for an increase in social housing and, while that is fine, we all know how long it’s going to take for the wheels of government to deal with that — even if there is the money in the system to do so — however, that would be a marvellous start.
“The alternative and additional route is to incentivise an increase in the supply of private sector housing by unravelling the hideous, illogical, and unfair tax disadvantages present in the system for non-corporate landlords and/or provide incentives to all landlords to invest and develop housing stock.
“The result would be an increase in the supply, and the natural result would be for rents to stabilise or even decrease — especially if those incentives were linked to some form of rent control.”
Nathan Emerson, CEO at Propertymark, told BTL Insider that there is a need for government intervention to improve the quantity of homes across all tenures, including not only social homes, but those within the PRS and homebuying markets, as they “each play an integral part in housing the nation”.
“Our member agents continue to report worrying low housing levels in the PRS, against a backdrop of rapidly increasing demand levels,” he stated.
“The UK government has forced the arms of landlords across the UK to sell up or raise rents in order to break even due to continued financial and regulatory hurdles with little incentives remaining in the market.
“Governments across the UK need to urgently address the fundamental problem of undersupply and look to adequately incentivise the provision of desperately needed homes in the PRS.”
