Landlords should be offered tax breaks and other incentives to provide accommodation for vulnerable young people and families, it has been claimed.
A new report from anti-poverty group the Joseph Rowntree Foundation (JRF) found that rising house prices due to a lack of supply and difficulty in securing a mortgage is likely to make home ownership and increasingly unachievable goal for many young people.
As such, over the coming years many more people will turn to the private rented sector (PRS) instead.
JRF's research suggests that the number of people aged 18 to 30 who live in privately rented accommodation will increase by approximately 1.3 million to 3.7 million by 2020.
But while this may be good for landlords' profits, with increased demand inevitably leading to higher rents, it could see the PRS become unaffordable for a growing sub-section of the most vulnerable young people and families, said the report.
It argues that incentives must be brought in to encourage investment in the PRS and so increase the supply of accommodation to meet growing tenant demand, as well as to prompt landlords to offer more stable and affordable tenancies to those on lower incomes.
"More stable private rented tenancies might be achieved through smarter incentives for landlords," said the report.
"International evidence suggests that these could include tax breaks in return for more stable, longer term tenancies for vulnerable or lower income tenants and/or other benefits such as lower rent levels."
Meanwhile, landlords may still be able to protect their rental income by taking out insurance products such as rent guarantee insurance.
Kathleen Kelly, programme manager at the JRF, commented: "Renting is likely to be the only game in town and young people are facing fierce competition to secure a home in what is an already diminished supply of housing.
"With 400,000 vulnerable young people, including families, on the bottom rung of a three-tier private renting system we need to avoid turning a housing crisis into a homelessness disaster."
Posted by Brandon Parker