The Current State of the UK Housing Crisis: A Focus on Rental Supply

Thu 22 Aug 2024

The UK housing market is currently facing a significant crisis, primarily driven by a long-term slump in rental property supply. New data reveals that the number of rental properties available across the UK has decreased dramatically by 31% since 2019. In August 2024, there were just 66,000 properties available for rent, compared to 96,000 in 2019. This decline has created a severe imbalance between supply and demand, contributing to rising rents and increasing pressure on tenants (Property Investor Today)​.


Impact on Rents Across the UK

As a direct result of this supply shortage, rents have been steadily increasing across most regions. Wales and the South West have seen some of the highest rental growth, with year-on-year increases of 14.5% and 11.7%, respectively. However, the situation in London contrasts sharply, where rental prices have actually declined by 1.2% year-on-year, with some boroughs like Bexley and Haringey experiencing even steeper falls.

Challenges in Housing Supply

The broader housing market is also struggling with a decline in new housing supply. Planning consents for new homes have dropped significantly, with estimates suggesting a sharp contraction in future supply. The number of new homes gaining planning consent has fallen below the current level of completions for the first time since the financial crisis of 2008-09. This situation is expected to worsen, with predictions that new housing supply could drop to as low as 160,000 homes by 2024/25 (Savills)​.

Outlook and Solutions

The current state of the housing market, particularly the rental sector, underscores the urgent need for comprehensive reforms and increased investment in housing supply. Without intervention, the rental market's supply-demand imbalance will likely continue to drive rents higher, exacerbating the affordability crisis for tenants across the country.