PRS vital for a vibrant economy

A thriving PRS is essential to economic and social wellbeing of the country, according to new research commissioned by the NRLA. Chief Executive Ben Beadle discussed the findings, why they are important and what needs to change.

Soaring costs, rising interest rates and the promise of yet more regulation round the corner make this a difficult time to be a landlord and as a consequence, a tenant.

The gap between the supply and demand is growing, with latest figures from property platform Zoopla showing supply has fallen by 38%, while demand is up 46%.

The situation shows no signs of abating, with almost a quarter of NRLA members saying they plan to sell off at least some of their rental homes.

Its against this backdrop that we commissioned a comprehensive research report, going back to basics, asking what the private sector in this country looks like, what function it performs and who lives in it.

The report was produced by Chris Walker of economics consultancy firm Chamberlain Walker, a former Head of Housing at the thinktank Policy Exchange and ex-Government economist.

The resulting report, ‘A housing market that works for everyone: Rethinking the role of the private rented sector’ proves the PRS supports local labour markets and provides vital homes for millions of renters who, for a myriad of reasons, do not want to buy – or are unable to afford to.

A tenure of choice

There are so many cliches hardwired into narratives around the PRS - not least that tenants are ‘trapped’ in rented accommodation.

However for many renters the PRS is a tenure of choice.

While it is true that many of the 2,000 tenants who took part in the research said they would like to own their own home one day – 76 per cent in fact –  just 17 per cent of that number said that, given the option, they would have taken that step.

For the remaining 82 per cent, the PRS is exactly where they want to be.

There are a number of reasons for this. They may want to strike out and try out life a new town or city, move in with a new partner for the first time, flat share with friends after leaving university….

Without the PRS they would be unable to do this without taking on the financial burden of a mortgage they neither want or need. The PRS offers the flexibility so many people want, yet no-one is talking about this.

Nor is anyone talking about the 80% of private renters that consider their rents fair, good or excellent.

We need to change the conversation to make sure this is reflected in talks by policy-makers.

Necessity

Of course living in the PRS isn’t always a matter of choice. There are people who cannot afford to buy their own home so have no option. Yet these people still need somewhere to live.

It is they who will be squeezed hardest should the supply crisis continue – inevitably pushing up rents and making saving for a deposit even more challenging.

The rhetoric around housing should not be homeowner v PRS. The PRS should not be treated as a poor relation, and in fact often acts as a springboard to home ownership, a stopgap between leaving home and buying your own place.

The findings of the report, which can be accessed in full here (hyperlink), will inform NRLA campaigning for pro-growth policies from the Government to encourage landlords to remain in the sector and continue to invest. This includes the reversal of Section 24 changes to mortgage interest relief.

Chris concludes that a high quality PRS is ‘likely to be a good thing both socially and economically’, and I couldn’t agree more.

The report makes clear the positive and vital role the rental market has to play in the economic and social life of the country. 

Contrary to the rhetoric from many, for the vast majority of tenants their experience in rented housing is positive.

It is through this lens that the Government needs to look, in order to ensure a sector that works for renters and responsible landlords.

Copies of the report have now been forwarded to Government officials in the Department for Levelling Up, Housing and Communities, HM Treasury and Number 10, along with invitations to discuss the findings.