RICS calls on Theresa May to "put her hard hat on" due to shortage of rental homes

With rising house prices making home ownership increasingly out of reach, the Royal Institution of Chartered Surveyors (RICS) predict that there will be 1.8m more households looking to rent by 2025.

The professional body is calling on the Prime Minister Theresa May to abandon David Cameron’s policy focus on home ownership and reverse April’s stamp duty measures in order to address short-term rental supply issues.

“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,” said RICS Head of UK policy Jeremy Blackburn.

Changes implemented in April this year have increased the stamp duty paid on houses that are not used as ones' main residence by 3%, deterring landlords from expanding their portfolios. Tax breaks such as the right to deduct mortgage interest from their income tax bill have also been removed.

Despite this, the conservative government is continuing to focus on home ownership. Communities secretary Sajid Javid recently said the government would take “unprecedented steps” to encourage construction of homes for people to buy.

"Far too many young people cannot get a foot on the housing ladder. Many are being forced to live back with mum and dad as rents soar faster than wages," said Javid. The number of households in the UK renting property rose from 2.3m in 2001 to 5.4m in 2014 according to RICS.

At 58%, over half of RICS estate agents reported a drop in buy-to-let sales since May. Its survey found that 86% of landlords did not plan to increase their portfolio of rental properties in 2016 and expected this trend to continue for the next five years.

“With increasingly unaffordable house prices, the majority of British households will be relying on the rental sector in the future. Any restrictions on supply will push up rents, marginalising those members of society who are already struggling,” said Balckburn.

The reversal of stamp duty would however be against the interests of potential first time buyers, who are regularly outbid by buy-to-let investors.

Nonetheless, RICS argue that there was a 15% decline in house sales to first time buyers over recent months, which shows David Cameron and George Osborne’s starter homes strategy failed to get off the ground.

The body felt the previous government used the private rental market as a “scapegoat” for the housing crisis which only made the situation worse.

Other recommendations put forward by the body include encouraging the private sector to build properties specifically for residential letting, pension funds to give tax breaks to fund large scale rental properties and councils to release brownfield sites for building new homes.

Ministers have unveiled a £5bn package of funding for housebuilding at the conservative party conference in Birmingham this week. Among the plans announced was an Accelerated Construction scheme which entails using £2bn of public sector borrowing to make public land, with planning permission, available to builders.

A further £3bn of previously announced funding would be directed into a Home Builders Fund, of which £1bn will be short term finance made available to smaller builders for 25,500 new homes by 2020. £2bn from the government’s infrastructure spending will be used to deliver 200,000 more homes over a longer period of time.