A YORK landlord and architect fears ‘armageddon’ in the private house rental market, with surging rents and shrinking supplies due to ‘punitive’ government measures.

The warning from Matthew Laverack comes as the National Residential Landlords Association says the number of private sector homes for rent is to keep falling over the next year.

The association cites research by global business consultancy BVA-BDRV saying 28 per cent of landlords in Yorkshire and the Humber plan to cut the number of properties they let in the next 12 months, up from 20 per cent a year ago.

In contrast, just 15 per cent say they plan to increase the number of properties they let, down six points since the start of this year.

Against a picture of falling supply, 78 per cent of landlords in Yorkshire and the Humber reported increased demand for rental housing in the second quarter of the year. This is up from 65 per cent who reported the same trend a year ago.  

With the demand for rental housing outstripping supply, official data has found that private rents across Yorkshire and the Humber rose by 3.2 per cent in the 12 months to June this year - the largest annual growth since July 2008.

The NRLA warns that the trend is a direct result of government policy and ‘punitive tax increases’ since 2015, which it says has merely served to shrink the private rented sector.

Since the Government began to restrict mortgage interest relief for landlords, the number of private rented homes in Yorkshire and the Humber has fallen by 15,000.

In stark contrast, those providing holiday lets continue to enjoy full mortgage interest relief. This, the group says has created a market distortion which favours short-term housing over longer term rentals, leading to York Central MP Rachael Maskell to speak out over the growth of such ‘AirBnB’-type rentals in York.

The NRLA is demanding the next Prime Minister ends what it calls ‘hostility’ to landlords and to take steps to encourage investment to meet the rising demand.

Research by Capital Economics suggests that lifting the stamp duty levy on additional properties would see almost 900,000 new private rented homes made available across the UK over the next decade. This would lead to a £10 billion boost to government revenue through increased tax receipts, they said.

Ruth Millington, Yorkshire and the Humber Spokesperson for the National Residential Landlords Association, said the figures show it is a nonsense that cutting the supply of rental housing when demand is strong will make it easier for those wanting to buy their own home.

“All it is doing is driving rents up, leaving tenants with less cash to save for a deposit,” she said.

Instead, many people need private rentals before they buy their own homes, so the government needs to ‘reset’ its policies.

York landlord and architect Matthew Laverack agreed, blaming the housing crisis largely on government interference deterring those who would have helped meet the demand for housing but have decided this is no longer worth the risk.

Mr Laverack, who has been in the rental and housebuilding sector for 40 years, says as ‘the demands got too much’, this led smaller housebuilders to leave the market.

Now, he says landlords are also quitting “in the face of punitive tax changes and huge costs to comply with ever increasing red tape and green tape.”

He too is selling off properties to pay off loans to remain profitable and survive, adding many landlords with debts will go under as new rules come in.

“What we are seeing now is a catastrophic meltdown of the private sector,” he added.

“We are heading for a housing crisis far worse than what we see at present; and that is bad enough.  Armageddon is coming.”