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Landmark report criticises government’s failed PRS policies

The government’s private rented sector policies are failing tenants, mainly because they are ‘not joined up or thought through’, a new landmark review has said.

The report, compiled by Dr. Julie Rugg and David Rhodes who conducted similar research commissioned by the government in 2008, found that a significant number of homes do not meet the Decent Homes Standard.

The Evolving Private Rented Sector: it’s Contribution and Potential, a landmark review of the PRS in England blamed successive governments for poor policies lacking an “overarching vision” for the sector, forcing many vulnerable tenants to live in substandard conditions.

The existing regulations in the sector, described as “confused and contradictory”, are “failing at multiple levels”, according to the report.

The report also suggested that changes to welfare reform are creating a “slum tenure” at the bottom end of the market, while policies like Build to Rent are increasingly focused on helping higher and middle-income tenants priced out of ownership, with little or no help for those on low incomes.

Dr. Rugg, the co-author of the report and senior research fellow at the University of York’s Centre for Housing Policy, said: “Since our first review was published, declining homeownership and a shortage of social rented homes have led to a surge in the number of people privately renting – particularly families with young children.

“Unfortunately, in its current form the private rental market isn’t providing a suitable alternative, and in the absence of an overarching vision from any government we’ve seen reams of policies and regulations which are not joined up or thought through.

“We need to see a fundamental rethink of the role that private renting plays in our housing market and a comprehensive strategy to ensure it meets the needs of every renter.”

To help combat poor property management in the PRS, the report called for an MOT-style system for checking and licensing private rented sector homes to be introduced.

Dr Rugg added: “A property MOT would give people confidence before they sign a tenancy that the property is fit for purpose, and that standards won’t lapse in the future, while for landlords, it offers greater clarity and protection against prosecution.”

Reflecting on the report, Leigh Pearce, the chief executive of the Nationwide Foundation, commented: “The private rented sector too often fails to provide decent and affordable homes, particularly for those on low incomes.

“It’s time for the government to end piecemeal policymaking and, instead, to develop a strategy for the private rented sector that makes it clear what role the sector plays in the wider housing market. We hope this review will be the start of a cross-party and cross-stakeholder conversation.”

The National Landlords Association (NLA) has welcomed the review and believes the sector would benefit from a more strategic approach from government.

NLA CEO, Richard Lambert, commented: “Everyone calls for ‘evidence-based policy’, but too often we have policy-based evidence. This report clearly states to case for better understanding of landlords, their motivations and their business plans, recognising that neither landlords nor tenants are a homogenous group.

“Understanding the customer is vital to ensure that private rented sector meets the needs of tenants and it’s essential that landlords develop a stronger consumer focus.

“At the same time, it’s important to recognise that the overwhelming majority of tenancies pass successfully for both landlords and tenants, and policy interventions to address those that don’t must be strategic and targeted.

“The government must reflect what we as a society want to see from the private rented sector, and we urge the Ministry of Housing, Communities and Local Government, and Housing Ministers, to lead, advocate and coordinate across government.

“We’ll only get that if there is some stability in the person in government who’s actually responsible – so we need a Minister who stays in post for more than a year at a time.”

Poll: Do you welcome the publication of this new report on private rented housing?

PLACE YOUR VOTE BELOW

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    • 11 September 2018 09:24 AM

    This endless interference in PRS is infuriating. Our properties are all excellent state and all tenants extremely happy. We spend many many thousands on maintenance and renovations and everything is kept in good order. The sec24 tax attack is however causing us to reduce maintenance expenditures so that we can build up more money to hand over as extra tax. As I keep saying for months, the governments tax policies are eradicating landlords cash flow, and this will lead to landlords having to sell .
    Grossly unfair that under section 24, you are charged tax on theoretical profits. Not real money. Whatever happened to the fundamental edict that a set of accounts should present a true and fair view of the businesses affairs? Or singular most pressing profit and loss expense item is the mortgage interest and now under section 24 that is disallowed. Imagine that approach being taken to all of forms of business where the financing is not permitted as an deductible expense - the country would stop working very shortly, as tax bills soared.

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    Hi Peter did you get me number re setting up bict ?

     
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    the effect of section 24 will be for rents to rise massively, as there are more people than homes out there it will be the tenants problem not the landlord's.

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    watch out tenants, more pain coming your way !.

  • Gary Yeardley

    It’s failing landlords too. As a landlord myself, the increasing adverse factors of being a landlord, such as tax hikes and increasingly unfair favouritism toward tenants in rent arrears, damages and eviction disputes - I will be forced to increase my rents to meet my increased risk and outgoings .... I expect many other landlords to do the same.

    The idea that s24 would force landlords to dump their buy to lets - thus freeing up property for first time buyers might happen to some extent, although there will be some backlash. There is already a shortage of rental property and as landlords continue to withdraw from the PRS, a shortage of rental houses will push up demand, thus pushing up rents even further!

    How long before the government’s interference pushes rents so high that tenants can not afford to live?

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    Last year I replaced some kitchens and bathrooms and incurred a lot of legal fees in remortgaging. Result? A tax loss. Response from tax man? An investigation - and lots of hassle! Lesson learned? Don't do anything that's not essential to improve your properties as the tax man would rather you spent less on maintenance and paid more tax!

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