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In February, our report titled “Standards at PRS” was released showing how property standards in the private rental sector (PRS) have improved significantly over the past decade thanks to landlord investment.
A survey of public housing in England shows that in 2008 44% of PRS houses were classified as indecent. Landlord investments supported by lending-with-purchase (BTL) have reduced this to 23%, the most notable improvement of any type of homeownership.
Politicians openly demonize landlords and BTL
During this period, progress was driven by the introduction of good quality houses, which reduced the share of poor quality housing. In 2008, 1.8 million privately rented houses were found to be decent; in 2021, this figure increased by 83% to 3.3 million people.
In addition to this, landlords have increased PRS share through renovations and refurbishments, with eight out of ten refurbishing every property they add to their portfolio.
In addition to the numbers showing that privately rented homes are now bigger, newer and finished to a higher standard than they were a decade ago, the data shows they are also more energy efficient, which benefits tenants, landlords and the environment.
Most landlords do a fantastic job of meeting the needs of their tenants.
According to government data, 1.9 million rental properties in England have an A to C energy rating, up 1.2 million from 2011, with a higher share of homes in this category than the sector.
At odds
This may come as a surprise to some because it contradicts media reports that seem to focus exclusively on shocking examples of substandard rental housing.
I feel that this is not some kind of vendetta against the landlords, but rather an example of how the media understands our penchant for news that outrages us; an age-old strategy that gained momentum in an era of clickbait content and ruthless information.
However, such reporting is a distortion of reality, as most landlords do a fantastic job of meeting the needs of their tenants.
The future housing policy should be pragmatic first and popular second.
The narrative promoted by some of the media is problematic because it shapes the consciousness of a public that is ingrained in the psyche of the idea of homeownership and inextricably linked to public policy influenced by our politicians.
Leading political figures openly demonize landlords and BTL, often pitting them against hard-working families and new buyers, failing to acknowledge that the improvement in the condition of privately owned rental homes has coincided with investment in a sector fueled by BTL funding. Data released by UK Finance shows a 61% increase in outstanding BTL balances between 2013 and 2021 to £280bn.
What else to do
There is still work ahead to oust the minority of unscrupulous operators and rid the PRS of the remaining disadvantaged houses. We fully support the plans to introduce a minimum “Decent Housing Standard” proposed by both the Conservatives and Labor, and urge local authorities to use their powers to achieve this.
Media reports seem to focus solely on shocking examples of substandard rental housing.
Responsible BTL lending can be a powerful tool here as well, when funding is only provided for properties that will be valued now or in the future.
With demand reported by landlords reaching an all-time high last year, driving rents up further, there is a clear need for rental housing, especially at a time when social housing supply continues to fall.
While the rhetoric may mean it is unpopular with voters, private investment is required to meet this need. So I think it’s important that policy makers recognize PRS as a primary provider of housing that meets the diverse needs of millions of people and is distinct from, but equal to, the social and tenant sectors.
The landlords increased the stock of PRS through refurbishment and refurbishment.
This, and a change in narrative that presents BTL landlords as enemies, will help move away from a debate dominated by political politics that doesn’t go beyond the next election.
We will continue to work with our industry partners and other stakeholders to ensure that the voice of the sector is heard and that future housing policies are pragmatic first and popular second.
Richard Rowntree is the managing director of mortgage lending at Paragon Bank.
This article was published in the March 2023 issue of MS Magazine.
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