Additional protections for buy-to-let investors would help make the UK’s housing market healthier, Johnny Morris has said.
The head of research at Hamptons International has unveiled a report into the property market.
Called Tonic for Tomorrow: Proposals for a Healthier UK Property Market, the 24-page report said the proportion of people aged 25-35 who were renting had increased from 31 per cent in 2008 to 45 per cent in 2014.
It pointed out that it was a misconception that the UK had one of the highest owner-occupation rates in Europe.
In fact, the report said, the rate was comparable to that of the US, and relatively low in comparison to the southern European countries such as Spain and Italy.
Mr Morris said: “Shifting tenure trends mean that private renting is increasingly becoming a longer-term option, not just for singles but for larger households too.
“The tools for servicing long-term private renters are only just being developed, and the government policy response so far has mostly been limited to attempts to stimulate institutional investment into a professional rented sector.
“More choice between standard tenancies for six months, one year and three years, with transparent mechanisms for rental uplift, would add certainty to the sector – for both landlord and tenant.”
The report said many buy-to-let investors would like to offer longer tenancies but are restricted by mortgage lending conditions.
Another of the report’s recommendations is to stimulate investment in the private-rented sector by allowing councils to sell land more cheaply.
Mr Morris said: “Institutional investment into the private rented sector has a role to play both in improving the quality of accommodation, experience of renting and delivering new homes.
“Allowing local authorities to be more flexible with public land disposals, ensuring build-to-rent schemes are viable on scale, could be the key to significantly growing the institutional private rented sector.”
Among the report’s other recommendations are the reform of council tax to add a new band at the top of the scale and to make funding available for more shared-ownership homes.
Sebastian Hurst, an adviser with London-based Plutus Wealth Management, said: “When you are buying property it is very much a long-term investment so people tend to hold it for a while.
“Particularly in London you use it as a growth asset and the yield you are getting is not your main goal, so shoring up any income in terms of tenancy would be quite convenient.”