A report from the House of Lords Economic Affairs Committee has concluded that the Government’s target for one million new homes by 2020 is inadequate, and not based on a robust analysis. According to the report, 300,000 new homes will be needed annually for “the foreseeable future” in order to effectively address the housing crisis – an increase of 50% from the current target.
The report is critical of the private sector, which it claims prioritises profit over volume, and focuses too much on building for sale rather than providing for the rental sector. The DCLG has suggested incentivising the private sector to provide more homes, and encouraging smaller builders back into the market, but admits that the private sector cannot realistically meet the demand by itself.
The Government is also criticised for prioritising home ownership over the needs of the private rented sector, which is being potentially undermined when it is most needed. Immigration is driving up demand, because “recent migrants are much more likely to live in the private rented sector,” but recent measures like the 3% hike in stamp duty are not helping.
The Residential Landlords Association has responded by calling on Theresa May’s new government to back private landlords by doing more to encourage investment in the buy-to-let sector. They call for better tax and planning policies to make investment more attractive for private landlords, rather than relying too heavily on corporate investment.