Sometimes the best-intentioned efforts can have unintended consequences. The government, for example, has been making fairly robust efforts to try to help renters, but at best they appear to have had limited impact. At worst, they may have actively backfired.
Social rental versus private rental
It may be a bit of an exaggeration to say that the social rented sector is no more but it is not that much of an exaggeration.
Although politicians of all parties have expressed a commitment to increasing the availability of housing stock (including rental housing), the fact of the matter is that not only is there still an under-supply of housing, there is a particular under-supply of rental housing and social-rental housing is the most scarce of all.
This means that the private rented sector has not only grown as a percentage of the overall rental market, it has also changed from being essentially focused on younger adults (both students and young professionals) to being the default option for most renters, including those on lower incomes and families who would traditionally have been prime candidates for the SRS.
This has, understandably, led to “growing pains” within the PRS and unfortunately Parliament has worked to address symptoms rather than causes, which has not helped matters.
The issue of standards
The PRS has been routinely criticised for its lack of standards and some sections of the media have, at the very least, inferred that this is a straightforward case of an industry putting profits before people.
While this is invariably going to be true in some cases (regardless of what industry you look at), it’s also important to remember that the social rented sector is backed by the tax-payer. The PRS has to stand on its own merits and in order to survive it needs, at the very least, to cover its costs and realistically it also needs to make enough so that the property investors who run it can make a decent living for themselves.
As the costs of being a landlord go up, (for example with the termination of tax relief for mortgage-interest payments), the levels of profit goes down and as the level of profit goes down, so too does a property investor’s ability to buy the most desirable properties and/or to make improvements to them.
It is therefore hardly a surprise that the PRS contains a relatively high percentage of older properties and properties which lack modern amenities such as central heating.
The issue of tenancy length
Up until relatively recently, it was generally tenants who preferred to have shorter rental contracts and landlords who were quite happy for them to stay as long as possible.
This is because the PRS was largely focused on students and young professionals, who, for the most part, were low-risk, (relatively) low-maintenance tenants, who would rent for a while and then move on in some way, often becoming first-time buyers.
Over recent years, however, the PRS has seen an increase in other types of tenants, such as families on lower incomes, who do value stability and would prefer longer-term tenancies.
Feedback from PRS landlords suggests that they are quite happy to offer these without being forced to do so by legislation – provided that there is a clear, effective and affordable route for them to remove the small number of tenants who do cause problems.