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Government Spending Helping to Build Demand for Rented Accommodation

The Government’s focus on making homes more affordable rather than building new properties has led to an increase in demand for rented property, according to a new report.

Government Spending Encouraging Rental Market

The Government’s focus on making homes more affordable rather than building new properties has led to an increase in demand for rented property, according to a new report.

Conducted by charity Shelter, this latest research asserts that two thirds of the Government’s spending in the housing market is helping to generate greater demand for the private rented sector (PRS).


According to the research, schemes such as Help to Buy have helped more people to reach the stage where they can enter the housing market. However, the lack of supply in the market has meant that there are no properties available for purchase.


Shelter assert that the current parliament has invested just £16.05bn of the £44.75bn budget for housing into building new homes, with the rest channelled into incentives and schemes that encourage demand.


Since 1990, the UK has only exceeded the current Government target of 200,000 completed new homes per year four times, between 2004 and 2008, according to the Department for Communities and Local Government.


Since the 2008 financial downturn, the number of new homes started and the number of homes completed have remained far below this target, with just 152,520 homes completed in 2014/15 and 141,490 new homes started in 2015/16, according to the latest figures.


The continued supply and demand imbalance in the UK property market has helped to drive up demand for the PRS, with a lack of properties available for purchase meaning that rented accommodation is the alternative available to many.


Last month, Homelet revealed that the average rent had increased in three quarters of UK regions, as landlords continued to benefit from high demand for accommodation.

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