February saw the launch of our report entitled ‘Standards in the PRS’, showing how standards of property in the private rental sector (PRS) had improved significantly over the past decade, driven by investment from landlords.
The government’s English Housing Survey shows that, in 2008, 44% of PRS homes were classed as non-decent. Investment by landlords, supported through buy-to-let (BTL) lending, has seen that figure drop to 23%, marking the most notable improvement across all housing tenures.
Political figures overtly demonise landlords and BTL
During this period, progress was driven by an injection of good-quality homes that diluted the pro-portion of sub-standard stock. In 2008, 1.8 million privately rented homes were classed as decent; in 2021, this figure had increased by 83% to 3.3 million.
Further to this, landlords have enhanced the PRS stock through renovation and refurbishment, with eight in 10 upgrading every property they add to their portfolio.
In addition to figures highlighting how privately rented homes are now larger, newer and finished to a higher standard than they were a decade ago, data shows they are also more energy efficient, benefiting tenants, landlords and the environment.
The majority of landlords do a fantastic job of meeting the needs of their tenants
According to government figures, 1.9 million rental properties in England have an energy performance certificate rating of A to C, a rise of 1.2 million compared with 2011, with the sector boasting a higher proportion of homes in the bracket compared to owner-occupation.
At odds
This may surprise a few people because it seems at odds with reports in the media that seem to solely focus on shocking examples of poor-quality rental homes.
I feel that, instead of any vendetta against landlords, this is more an example of the media understanding our penchant for news that outrages us; an age-old strategy turbocharged in a time of click-bait content and relentless information.
Nevertheless, such reporting is a misrepresentation of the reality, where the majority of landlords do a fantastic job of meeting the needs of their tenants.
Future housing policy must be pragmatic first, popular second
The narrative pushed by sections of the media is problematic because it shapes the opinion of a public that has homeownership ingrained in its psyche, and is inextricably linked with government policy, influenced by and influencing our politicians.
Leading political figures overtly demonise landlords and BTL, often pitting them against hardworking families and first-time buyers while failing to acknowledge that improvement in privately rented homes has coincided with investment in the sector facilitated through BTL finance. Figures published by UK Finance reveal a 61% increase in the value of outstanding BTL balances between 2013 and 2021, to £280bn.
More to do
There is more work to do to drive out the minority of unscrupulous operators and rid the PRS of the remaining non-decent homes. We fully support plans to introduce a minimum ‘Decent Homes Standard’, proposed by both Conservatives and Labour, and call on local authorities to use their powers to help achieve this.
Reports in the media seem to solely focus on shocking examples of poor-quality rental homes
Responsible BTL lending can be a powerful tool here too, with finance provided only on properties that make the grade now or in future.
With demand reported by landlords hitting record-high levels last year, further fuelling rent increases, there is a clear need for rented homes, particularly while the social housing supply continues to fall short.
Although the rhetoric may mean it’s unpopular with voters, private investment is required to meet that need. So I feel it is important for politicians to recognise the PRS as an essential provider of homes, meeting the varied needs of millions, and different from but equal to the social and owner-occupier sectors.
Landlords have enhanced the PRS stock through renovation and refurbishment
Doing so, and changing the narrative from one where BTL landlords are cast as the enemy, will help to move the debate on from one that is dominated by soundbite politics that looks no further than the next election.
We’ll continue to work with our industry partners and other interested parties to ensure the sector’s voice is heard, so that future housing policy is pragmatic first, popular second.
Richard Rowntree is managing director of mortgages at Paragon Bank
This article featured in the March 2023 edition of MS.
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