The country is facing a rental crisis, a landlords group has warned, as analysis reveals a surge in demand for private rented sector (PRS) properties.

According to research commissioned by the National Residential Landlords Association (NRLA), in the final quarter of last year 63% of landlords reported increased demand from tenants.

Compiled by research consultancy BVA-BDRC, the figures show  a substantially higher proportion than prior to the pandemic – in Q4 2019, 25% of landlords reported increased demand.

In its Budget submission to the Treasury, the NRLA has warned:

• Projections from UCAS which show there could be a million applicants for higher education in a single year in 2030, almost a third higher than in 2022
• The number of those aged 15-29 is set to increase by over 6% over the next decade, according to the Office for National Statistics
• Net migration flows are likely to settle at 245,000 annually by 2026/27, according to the Office for Budget Responsibility. Data shows that migrants are three times more likely to be in private rented accommodation than the UK-born population
• Continued difficulties for many who aim to become homeowners. Hamptons forecasts a repeat of the situation which followed the 2008-09 financial crisis, which saw an extra one million potential homeowners unable to afford higher mortgage payments and instead turn to the rental market for accommodation.

Despite the growing demand, the NRLA’s survey data shows that landlords are far more likely to sell rather than invest in new properties to rent. Whilst 11% plan to increase the number of homes they let, 30% plan to cut the number they rent.

The NRLA is calling on the chancellor to scrap what it calls “damaging tax hikes” which it says will “cause misery for tenants”.

According to NRLA, the Treasury needs to end the 3% stamp duty levy on the purchase of homes to let – a step that could see almost 900,000 new private rented homes made available across the UK over the next 10 years, according to Capital Economics. The NRLA says it would also lead to a £10 billion boost to Treasury revenue through increased income and corporation tax receipts.

Ben Beadle, NRLA Chief Executive, said: “The demand for private rented housing is only set to grow. As it does, would-be tenants will face the reality that there are not enough homes to meet their needs. This is a result of deliberate efforts using the tax system to dampen supply.

“The country needs more of every type of housing, and that has to include new homes for private rent. The quicker the Government takes this into account, the sooner we can relieve the struggles renters face when finding a place to call home.”