According to research conducted by the Centre for Cities (CfC), the Government needs to focus more on increasing the numbers and standards of private rented homes rather than on home ownership.

The CfC expressed concerns regarding the Government’s focus on home ownership because in the current economic climate those people who are financially vulnerable run a heightened risk of repossession. According to figures by Hometrack, over 3.2 million people could be renting by 2021. If these figures come to fruition, at the current rate of house building, one in five new homes will need to be for the purpose of renting.

The study has called for cities to work more closely with developers, landlords and tenants to target areas of the country which need rental properties and to avoid the oversupply of buy-to-let properties seen in some UK cities. The CfC believes that encouraging large institutional investors such as pension funds and insurance companies to invest in rental homes will deliver more homes at a quicker rate and therefore offer potential tenants a far greater choice.

A spokesperson for CfC told PIN: “This is a very good time for institutional investors to move into the rental sector, with 25% higher unmet demand for rental property, compared to buying a house. They could see gains in both rental yields and the long-term value of their investment. There will always be demand for the flexibility renting offers, however it is absolutely crucial that cities work more closely with developers, landlords and tenants who can advise investors and property developers on what homes are needed and where, avoiding an over-supply of unwanted and unsuitable buy-to-let properties.”

When PIN asked how receptive the Government will be to these recommendations, she added “The mood may be changing, most notably with the soon to be published government-commissioned review of the private rented sector. But if the private rented sector is to be expanded, this will require more than the announcement of yet another review.”