The chief policy adviser for Propertymark said the housing industry was “deeply concerned” that the part the private rental sector plays in a delicate housing system was being “severely overlooked”.
“Overlook it too much and the private rented sector, of which 5.5m households in the UK currently rely on, will diminish in droves,” Hayward warned.
For those borrowers struggling during the pandemic, the government extended its mortgage holiday into July 2021.
“For many, this was a welcome relief, although as a body who looks after lettings as well as sales, we saw the biggest effect of the pandemic on renters and landlords,” said Hayward.
“Large amounts of arrears and stalled ability to seek any recovery of a property has left many landlords at a loss.
“Couple this with a barrage of new legislation and unachievable energy efficiency standards and the future of the private rented sector looks bleak.”
The government is attempting to encourage more of the nation’s housing stock to retrofit and become energy efficient - reaching energy performance ratings of C or above. The pressure is currently on landlords to do this by 2025.
Lenders risk stalling the market and starving the private rental sectorMark Hayward“What we need to see from all UK governments is clarity and support for both homeowners and landlords,” said Hayward.
“We are wary of the one-sized-fits-all approach being taken to funding. It’s important to take into account the disparity of age, size, location and construction of the UK’s housing stock when discussing such a huge challenge.
“Since the failure of the green homes grant, the approach has felt decidedly more stick than carrot.”
With many green mortgage offerings only rewarding those landlords who have invested in retro-fittings, and penalising those who can’t achieve an EPC rating of C, Hayward said he was also concerned lenders “risk stalling the market and starving the private rental sector”.
'Market could overheat'
Hayward said 2021 would be remembered for “overwhelming” buyer demand, sales tipping over the asking price more often than not, and a shift to a strong sellers’ market following an eight-year-long buyers’ market.
“Heading into the new year, there are concerns the market could overheat,” said Hayward. “The current growth is unsustainable, and we need to see a rebalancing of demand and supply which could be created by natural changes.”
Hayward said a combination of more sellers entering the market after Christmas, as well as a rise in interest rates, will help edge the housing market to a more sustainable level.
In 2021, the average number of buyers registered per estate agent branch in the UK stood at 447, the highest this figure has been since 2004, according to Propertymark’s data.
By June, such demand - helped along by the stamp duty land tax holiday - saw UK house prices grow at the fastest rate since 2004.
“This supply and demand imbalance has driven house prices high, and in March 2021 when the property transaction tax holiday was extended, Propertymark figures show a shift from an eight-year-long buyers’ market into the strong sellers’ market we are seeing now.”
With sellers back on top, asking prices began to climb. Since 2013, the majority of homes have sold for less than their asking price. But in the last year, a significant shift has happened, with homes now predominantly selling for their asking price or over.
ruby.hinchliffe@ft.com
