The UK is grappling with a 1.8m shortfall in properties available to renters, chartered surveyors have said, due to tax changes for buy to let investors.
According to the Royal Institute of Chartered Surveyors (RICS), due to rocketing house prices there will be 1.8m more households wanting to rent instead of buy by 2025.
But 86 per cent of landlords do not plan to purchase more properties to rent out this year, RICS said. Buy to let sales have been falling since March due to the introduction of a higher rate of stamp duty on second homes, a policy of former chancellor George Osborne.
Buy to let landlords scrambled to buy properties before the tax came in at the beginning of April.
Jeremy Blackburn, RICS head of policy said: “It’s time for Theresa May to get out her hard hat. We are facing a critical rental shortage and need to get Britain building in a way that benefits a cross section of society, not just the fortunate few.
"The private rented sector became a scape goat under the previous Prime Minister, and because of that it suffered. Yet with increasingly unaffordable house prices, the majority of British households will be relying on the rental sector in the future.
"We must ensure that it is fit for purpose, and the government must put in place the measures that will allow the rental sector to thrive."
Between 2001 and 2014 the number of UK households renting property doubled from 2.3m to 5.4m, but, RICS said, the government has been taking measures to cool demand for buy to let investment, "arguably making a 2025 rental supply crisis more likely".