United Kingdom
January 2022
PayProp Rent Report

Lords report slams PRS

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The private rented sector is too expensive and delivers poor-quality housing, says a House of Lords report published this month.

The Meeting Housing Demand report is severely critical about the sector, calling private renting “the tenure of last resort” for people who cannot afford to buy a home and do not qualify for social housing. It also points out that private tenants are paying an increasing share of their income for rentals: 32% of household income on average in 2020, compared to just 12% in 1980.

Private renting wasn’t uniformly criticised, though. The report welcomed the growth of the Build to Rent sector for its contribution to the national housing supply. While it currently forms only a small part of the private rented sector, Build to Rent is growing rapidly: property consultancy CBRE reported that investors put £4.1bn into Build to Rent projects in the UK in 2021. To date, most Build to Rent construction has focused on London, but new analysis from the British Property Foundation has found that cities outside the capital are now seeing construction ramp up.

The Lords’ perception of the private rented sector may also be a bit out of date. The latest English Housing Survey found that conditions in the private rented sector have improved rapidly over the last decade. Just over a fifth of privately rented homes fail to meet the government’s Decent Homes Standard, compared to 37% in 2010. By comparison, a similar proportion – 16% – of owner-occupied homes are non-decent.

The report’s other recommendations could actually help the private rented sector, if only indirectly. The authors called for accelerated building of social housing so that low-income and vulnerable tenants can rent socially instead of paying for privately rented housing, subsidised by Local Housing Allowance. Tenants who receive benefits often face discrimination when trying to rent privately, while private landlords worry about navigating the benefits system or renting to tenants with complex needs. Expanding the social rented sector and allowing landlords to focus on higher-income tenants could be a win-win.

Other tenant headlines

Tenants face perfect storm of rent rises in 2022 – This Is Money

Landlords told to expect clampdown on unfair rent rises – LandlordZONE

Charity says end of eviction ban directly led to homelessness – Landlord Today

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