The cost of private rented housing has largely followed changes in earnings across England, in stark contrast to the social rented sector where rents have increased faster than wages.
The new report from the National Audit Office said that “since 2006, the cost of private rented accommodation has broadly followed changes in earnings across England” whilst “social housing rents have increased faster than earnings since 2001-02.”
It does, however note that the exception to this is in London, where rents are rising much faster.
The Residential Landlords Association (RLA) is warning that this is a result of a chronic shortage of homes across all tenures in the capital and that there will be further pressure on market rents as a result of the forthcoming changes to mortgage interest relief.
In its analysis on the state of the housing market today the Royal Institution of Chartered Surveyors also made the point that “rents are being squeezed higher due to demand consistently running ahead of supply.”
RLA Policy Director, David Smith said: “Today’s findings from the National Audit Office will surprise those who have falsely sought to argue that landlords are profiteering.
“The question must surely now be why the heavily subsidised social rented sector is seeing its rents increasing so much more than earnings.
“We cannot afford to be complacent. Forthcoming changes to mortgage interest relief, due to be rolled out from April will serve only to place upwards pressure on market rents, stifling the supply of homes to rent and reducing choice for tenants.
“In the end, those who will suffer will be tenants unable to save for a house of their own, and the many vulnerable people, such as the homeless, who rely so much on the sector to provide a home for them.”