CSR: Social housing cuts may cause “carnage” in private rental sector
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The Government’s cuts to social housing may cause “carnage” in the private rental market, according to Precise Mortgages.
Chancellor George Osborne today announced in his comprehensive spending review that while the terms for existing social housing tenants and their rent will remain unchanged, new tenants will be offered rents at around 80 per cent of the market rent.
The chancellor forecasts this will allow the building of up to 150,000 new affordable homes over four years.
Precise Mortgages managing director Alan Cleary (pictured) says: “Now that the Government has effectively handed social housing to the private sector, we are destined for carnage if lending continues at the current rate.
“The private rental sector needs to be thriving if it is expected to cope with the massive rise in demand. At the moment, lending in the buy-to-let market is down 80 per cent on its peak and there is little sign of it clawing back any lost ground. Only a handful of lenders are interested in servicing it and that is nowhere near enough to meet the oncoming tsunami of demand.
“The Government should have considered this when it planned its cuts to social housing. It must provide incentives for lenders to lend and for professional landlords, who are in the market for the long term, to invest further in the sector. If the Government fails to provide some safety-net for the private rental sector we could be heading for a housing disaster.”
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Readers' comments (3)
Anonymous | 20 Oct 2010 2:50 pm
My wife and i are returning to live permenantly in the UK.
We intend to put our names down for council housing as we cannot afrord to buy.
Being pensioners i see that new tenents will be offered rents at 80% of market rents how will that effect us as pensioners.
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Anonymous | 20 Oct 2010 4:30 pm
"returning to live permenantly in the UK!"
So you expect to be able to return after not paying UK Tax and have a right to cheap housing? get real, you should have saved for your retirement!
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Anonymous | 21 Oct 2010 2:11 pm
I'm afraid to say that with 80% of market average rates will mean if you can't afford to rent any decent public sector property either. As much as I did not like the tone of the first response received on this subject, I'm afraid he is right.
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