Punitive measures all but designed to encourage selling have combined with tight supply and record immigration to cause a crisis
Buy-to-let investors would be gradually eased out of the market. Rents would start to moderate. First time buyers would find it easier to get their first property, and the housing market would become a lot more stable. When the government launched its war on landlords, ministers no doubt hoped that by now it would have fixed the UK’s property crisis, and made finding somewhere comfortable to live far easier. The trouble is, it hasn’t worked out like that. Instead of solving anything, the government has taken a bad situation, and made it far, far worse.
Britain is now in a full-scale rental crisis. The cost of renting just a room has gone above £700 a month for the first time, according to data from the website Spareroom. It is up by 17 per cent nationally, more than double the rate at which earnings are growing, and by 19 per cent in London. The number of homes to rent has dropped to a 14-year-low, according to the consultancy TwentyCi, with a 35 per cent fall in the stock on the market. Rents are now taking up the highest proportion of income in a decade, according to Zoopla. It doesn’t matter what set of data you look at. Renting is getting harder, and more expensive.
Anecdotally, it is even worse. Ask anyone trying to find a place in London, or a student looking for accommodation for the new term starting this autumn, and they will all tell you the same thing. It is almost impossible to find anything, and when you do the cost is exorbitant.
There’s no great mystery about why this has happened. For the last decade, the government has been waging an unrelenting war on landlords. It changed the tax treatment of mortgage interest, so that it could no longer be set against tax unless the property was owned by a company. This has driven up costs, and is really biting as interest rates return to normal levels.