A new report on the private rented sector has warned that current returns for landlords are too low to boost the supply of housing stock that will be needed to boost tenant demand. The report, from Michael Ball, professor of urban and property economics at the University of Reading, says this is in spite of reports of rising rents when costs and inflation are taken into account.

Those seeking landlord insurance at http://www.simplelandlordsinsurance.com/guide/tenant-property-landlords-insurance.aspx might find the report sobering reading. It includes a survey of landlords’ costs and returns that revealed present rent levels do not cover all of landlords’ expenses such as refurbishment, borrowing costs, energy and depreciation, posing a danger to further investment in the sector.

The consequences for tenants could also be grim, as they face rising rents and an ongoing shortages of properties, while there could be wider repurcussions for the economic recovery if people are unable to find affordable rental housing.

“Investment in the past was driven by rising house prices, now there is a need to rethink taxation and regulation so that rental returns come to the fore at rent levels that are affordable for tenants,” said Professor Ball at a House of Commons meeting in November.