Supply dearth needs mixed offer

Leaders Romans Group works with a wide range of landlords, so we see the pressures of market conditions and imminent legislation across the sector. We are strongly in favour of high standards in health and safety, security of tenancies and fair rents, but supply and demand – not ‘rogue landlords’ – is the problem.

The number of households renting privately has increased by 93% in the past 15 years. A new tenant demographic is emerging: households with dependent children have doubled, making up 30% of the sector, while ‘comfortable renters’ now represent 44%.

But supply is down 38%, mostly due to landlords withdrawing from the market for complex reasons, including new regulations and concerns about limitations to come.

Fortunately, build-to-rent (BTR) is responding to this demand and attracting professional institutional investment. Some 70% of global institutional investors surveyed in 2022 anticipated being active in suburban BTR within the next five years. Furthermore, the British Property Federation predicts that the sector will be worth £170bn by 2032, with BTR units in the UK rising from 76,800 to more than 380,000.

Our recent white paper found that BTR suburban communities are key to meeting both new demand and professional standards, offering fair leases and rents, excellent service and property maintenance.

These changes will undoubtedly help professionalise the sector – not the result of a future Renters’ Reform Bill but in spite of it. New models have evolved because of the financial transparency, insistence on quality and commitment to ESG upheld by investors and developers.

If the Renters’ Reform Bill pushes rogue landlords out of the market, it has served its purpose – but reducing stock will exacerbate the problem. A combination of privately owned homes supplied by responsible individual landlords and institutionally owned BTR units is vital to meeting unprecedented demand.

Andy Jones is group director, corporate and BTR, at Leaders Romans Group