Kate Faulkner of Designs On Property has produced an independent report on the salient issues facing the Private Rented Sector (PRS), “The Private Rented Sector 360 Degrees”. At a time when renting is high on the political agenda and forthcoming legislative changes could substantially affect the industry, the PRS Report has received a positive response.
The 45 page in-depth report looks at the PRS from all perspectives, tenants, landlords (private & social), agents, professional associations and government.
The report has received support from leading members of the industry*.
The analysis looks at the impact of proposed housing polices on the PRS, the wider roles and responsibilities of others involved in the rental process and how the PRS needs to change to meet the needs of an increasing tenant population.
Kate Faulkner says:
“The PRS is now the second biggest form of housing tenure in the UK and the only tenure expected to grow in the next five years as we see a fundamental growth in population, a fall in the availability of social housing and the increased inaccessibility of home ownership. As a result there has been growing scrutiny of the sector and a call for it to become a more ‘mature’ market offering good value for money together with security of tenure and properties which are let in good condition.”
The report outlines that the PRS works well for most tenants and landlords, but does fail a proportion, notably through the condition of rented property and retaliatory eviction. While most tenants do not live as “second-class citizens”, and with legally rented properties typically safer to live in than many owned homes, more social and affordable homes are needed to support socially vulnerable and low paid workers. In reality though, the PRS cannot be squeezed to solve affordability issues which exist due to a lack of building enough homes.
The report also outlines that the PRS has similar tenure security issues to both social housing and those which are owner occupied. It is highlighted that most PRS tenants choose to leave a rented property for more suitable accommodation, and many opt to live in the PRS for the flexibility of being able to move at short notice.
Kate Faulkner continues:
“The key challenges currently facing the private rented sector are that over a third (35%) of lettings agents are not members of a professional regulatory organisation; landlord affordability with one in five earning no income; and those tenants who choose to or are forced to rent outside of the self-regulated sector, which compromises both their rights and the responsibilities of their landlords.”
The report calls for ten changes that would solve some of the key issues that face the industry and make for an improved PRS, driven by excellence, enforcement and education:
1. Fifteen clear, easy to understand checks, that a rental property is legally let, especially regarding electrical checks.
2. Compulsory client money protection for all letting and managing agents.
3. A taxation system where rented properties are treated as businesses, encouraging landlords to invest.
4. A rental market free from controls
5. A tick box on council tax forms to say a property is rented.
6. All landlords and letting agents must adhere to the same standard within the self-regulated sector, e.g. place the PRS code on the statute books and ensure all letting agents sign up to the Landlord Rental Standard.
7. Existing and new regulations to be enforced with a realistic budget, e.g. penalty notices for tenant/landlord offences, proceeds to be kept by the local authority and re-invested in further enforcement and education
8. Cross government, industry and organisations agree to educate tenants and landlords from one source.
9. Ensure the ‘how to rent’ guide is included in the national and higher education curriculum under Pfeg and NUS.
10. Mandatory CPD training for all involved in the PRS (e.g. lenders, insurers, landlords, letting agents, charities, housing associations) on property conditions and maintenance, e.g. working with organisations such as Peter Cox and CFOA.
Kate Faulkner concludes:
“The future of the PRS is bright if we expand the excellence that already exists and properly enforce the existing rules and regulations. Perhaps most importantly will be MPs, local authorities, the self-regulated industry and other relevant organisations coming together to discuss the improvements necessary to improve the PRS for all those involved.”
David Cox, Managing Director of the Association of Residential Letting Agents (ARLA) said,
“There is currently little empirical data on the private rented sector which makes it difficult for Minister’s and policy-makers to make informed, evidence-based decisions on the future legislative direction of the sector.
“ARLA welcomes this report as it brings together data from a variety of sources and indices into one comprehensive document which I hope will assist the political parties over the coming months as they compile their manifesto pledges on the private rented sector ahead of the General Election.”
Read the full report The Private Rented Sector 360 Degrees
* ARLA, British Property Federation, RICS, The Property Ombudsman Ltd (TPO), Belvoir, Chestertons, Concentric Lettings, Countrywide, Leaders, Knight Frank, Savills and Your Move all support The Private Rented Sector 360 Degrees report by Kate Faulkner.
— LandlordZONE (@LandlordZONE) February 12, 2015