Proposals For The Private Rented Sector The Rugg Review

1. Proposals For The Private Rented Sector“The Rugg Review” Liz Adamson Senior Environmental Health Officer Private Sector Housing Solutions

2. Background Initiated by CLG Terms of ref set by CLG Acknowledges that PRS is increasing in size and diversity Seeks to influence policy to elevate PRS from the current ‘third option’ Maximise potential of PRS

3. Contribution of the PRS PRS = 13% of housing stock Boom in BTL? 46% of BTL advances from existing landlords re-mortgaging their existing portfolio Proportion of small Landlords has grown Landlords by default, credit crunch, etc

4. Occupation within the PRS Stability 21% of private tenants have lived in their property for 5+ years ‘Churn’ 40% of private tenants have lived at their current address for <12months

5. Submarkets of PRS Young Professionals Students Housing Benefit Market Slum rentals Tied housing High income renters Immigrants Assylum seekers Temporary Accommodation Regulated tenancies

6. Potential of PRS Delivering a new & Affordable property supply Demand for housing increasing – home building projects decreasing. Unclear if PRS actually brings new housing into uses existing housing stock New build in the PRS tends to be in sub markets where high density build is appropriate i.e. studio flats for your professionals or private halls of residence Affordability – PRS meets intermediate housing needs for those that can’t afford to buy & aren’t in a priority group for social housing.

7. Potential of PRS…….cont Securing Institutional Investment in the PRS Encourage more professional landlords Policies should help good landlords of all sizes to grow. Large landlord’s will generally expand via portfolio acquisition - small landlords may need some assistance i.e. changes to stamp duty & capital gains tax. Small scale landlords are in a good financial situation – low LTV mortgages or mortgage free

8. Potential of PRS…….cont Making Management of Rental Market more Professional Majority of landlords operate professionally – 75% of private tenants are either ‘very’ or ‘fairly’ satisfied with their landlord 25% - not satisfied – some landlords do not consider letting an activity that requires regulation Managing agents are unregulated and have varying standards Accreditation = market advantage i.e. student accreditation-

9. Potential of PRS…….cont Improving Property Quality PRS lags behind social housing and owner occupation. 50% do not meet the decent homes standard improve standards via accreditation schemes & regulating managing agents Suggestion to only permit managing agents to use homes that meet the decent homes standard . 43% OF HOMES WHERE l.l USED A ma WERE NON -DECENT43% OF HOMES WHERE l.l USED A ma WERE NON -DECENT

10. Potential of PRS…….cont Providing Sustainable tenancies Is the existing tenancy framework adequate? PRS = short-term insecure housing? Stability vs Churn Why do tenancies in PRS end against the wishes of the tenants – rent arrears, poor standards making tenancy unsustainable & anti –social behaviour – policy should then focus on these issues rather than change the framework

11. Potential of PRS…….cont Managing problem private renting Review looked at Student housing change of planning use for student housing ‘Slum’ landlordism Selective licensing? Migrant working overcrowding Over occupation to reduce housing costs

12. Recommendations Policy Direction of Travel A sound evidence base Poor understanding of how PRS operates at national & local policy making levels. Call for more co-ordinated and relevant data collection on PRS Better understanding of managing rented housing MA’s should be subject to mandatory regulation & RSL’s encouraged to sell their rental management skills Assist the letting business to grow Changes to stamp duty & capital gains tax to encourage growth BTL mortgages subject to a business plan and tenancy protection in the event of defaulting on mortgage payments.

13. Recommendations………….cont Equalising the rental choice Single procurement agency for public agencies requiring PRS properties Social lettings agency offering full property management services – reduces risk of rent arrears & ASB Mandatory assistance with deposits and rent in advance for those on HB Tenancy frameworks Unclear if eviction from PRS is a cause of homelessness or if existing tenancy frameworks are problematic. Issues of inadequate policing, difficulties with HB, poor support for vulnerable tenants are addressed directly or indirectly elsewhere.

14. Recommendations………….cont Light touch licensing and effective redress Landlord applies for a Permit to rent with a penalty points system for misdemeanours. Permit obtained regardless of current property management standards Permit revoked if too many points accrued & landlords banned from letting property – a real sanction for bad landlords Licences administered by national autonomous agency specific to PRS Would not impose excessive regulation Useful database of local landlords Could reward good behaviour if linked to tax incentives – and punish bad. New Complaints and redress procedure – funded vis permit income

15. Conclusions Better co-ordination between Government depts. New NI’S to assist LA’s to make links between the contribution of the PRS and other targets. Some proposal to be put forward in the Housing Reform Green Paper Overall looking to professionalise the sector via a change in culture of renting from an investment to a business activity – a long term objective

16. Finally Document can be viewed at: http://www.york.ac.uk/chp The Private Rented Sector: its contribution & potential