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  • In the Spotlight

    New landmark review of PRS slams policies

    Released today, The Evolving Private Rented Sector: its Contribution and Potentialfunded by the Nationwide Foundation, is a detailed, independent analysis of who lives in private rented housing, how their needs are being met and the impact of policy interventions over the last ten years.

    It comes a decade after Dr Julie Rugg and David Rhodes published their original review of the private rented sector – the first to look in detail at how it functioned.

    The main findings in today’s review include:

    • Current regulation of the sector is ‘confused and contradictory’ and ‘failing at multiple levels’. Opportunities for linkage and simplification are being missed, with tenants and landlords unsure of their rights and responsibilities.
    • Poor conditions are a problem at both ends of the market – one in five homes let at the top 20% of rents are non-decent, and one in three let at the bottom 20%. Conditions get worse the longer tenants are in their property, indicating that poor property management rather than old housing stock is the root cause.
    • Changes to welfare reform are creating a ‘slum tenure’ at the bottom end of the market as more tenants are unable to afford to meet their current rent levels or find accommodation without the help of statutory or third sector agencies.
    • Policy interventions – such as Build to Rent – are increasingly focused on helping higher and middle-income renters priced out of ownership, with little or no help for those on low incomes.

    The review concludes that no government has been clear on the function of renting within the housing market and as a result, interventions have been piecemeal and poorly targeted.

    Julie Rugg, co-author of the report and Senior Research Fellow at the University of York’s Centre for Housing Policy said:

    “Since our first review was published, declining home ownership and a shortage of social rented homes have led to a surge in the number of people privately renting – particularly families with young children.

    Unfortunately, in its current form the private rental market isn’t providing a suitable alternative, and in the absence of an overarching vision from any government we’ve seen reams of policies and regulations which are not joined up or thought through. We need to see a fundamental rethink of the role that private renting plays in our housing market and a comprehensive strategy to ensure it meets the needs of every renter.”

    Leigh Pearce, Chief Executive of the Nationwide Foundation, the charity that funded the review, said:  

    “The private rented sector too often fails to provide decent and affordable homes, particularly for those on low incomes. It’s time for the government to end piecemeal policymaking and instead to develop a strategy for the private rented sector that makes it clear what role the sector plays in the wider housing market. We hope this review will be the start of a cross-party and cross-stakeholder conversation.”

    The review calls for the introduction of a landlord and letting agent register, and suggests a new ‘Property MOT’ as a way to bring together and simplify existing regulation and help drive up property standards in rented homes.

    The Property MOT would operate in a similar way to that which exists for cars: all properties let for residential purposes would be required to undergo an annual standardised inspection. It would bring together current requirements such as electrical and gas safety certificates and energy efficiency reports, but also include a new assessment according to a basic minimum standard.

    The MOT test would be conducted by independent inspectors and would be a tax-deductible business cost for landlords.

    Julie Rugg said:

    “There is currently no minimum standard that properties have to meet before they are let. Over a million renters are putting up with damp, disrepair and sometimes life-threatening hazards. A Property MOT would give people confidence before they sign a tenancy that the property is fit for purpose, and that standards won’t lapse in the future, while for landlords, it offers greater clarity and protection against prosecution. This proposal is just one way in which existing legislation can be simplified to make the sector work better for everyone.”

    David Smith, Policy Director for the Residential Landlords Association commented:

    “We welcome today’s report which the RLA contributed to.

    “Whilst the Government’s own data shows that 84 per cent of private tenants are satisfied with their accommodation, no one should have to face living in sub-standard accommodation.

    “With RLA research showing that there are well over 140 Acts of Parliament regulating the sector, the problem is with the enforcement of these laws. Research by the RLA’s research exchange, PEARL, has found that less than half of councils have a policy on the use of civil penalties against private landlords.

    “We are calling on councils to provide the political leadership needed to use the extensive powers they have to find and root out the minority of landlords who are criminals and have no place in the market.”

    David Smith continued:

    “We agree with concerns about the complexity of the legislation surrounding the market. Tenants, landlords and local authorities all need to clearly understand their roles, responsibilities and the powers available to tackle poor housing. For many this has become difficult to achieve.

    “A root and branch review of all regulations affecting the sector needs to be carried out to understand if they are achieving what was originally intended. There is no point passing new laws and regulations if the existing ones are not being enforced properly.”

    Find out more and download the full review

    I am pleased to report that Nick and I have been invited to meet with the Housing Minister's Special Advisor in London tomorrow to talk about the state of the PRS.  We hope to be working more closely with Government in this regards, and feeding back to them the issues landlords are facing.

    SEE ALSO  -        Rental stock declines - 1st time in 18 years

    UP NEXT -            BTL property purchases in sharp decline

    DON'T MISS -       9 reasons why Section 24 will be reversed

    NOW WATCH:

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    Hope the meeting will be a genuine listening and discussion session. Not just a tick box from the government.

    If they are introducing a MOT type system, hopefully they will remove the need for selective licencing.

    Some of the topics which I am sure you will touch on are 3 year AST, continuation of S21 and status of S24.

    Will await for your feedback.

    Thank you so much for your effort.

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    "Changes to welfare reform are creating a ‘slum tenure’"

    That is very damaging - considering we have people living in sheds at bottom of other people's gardens.
    ​It's hard to deny there is a demand for "slum tenure". The prevalence of HMO's (not saying they are slum) shows the demand for low-cost housing.

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    Good. About time someone came up with something sensible and without political or financial subtext.

    I don't mind an annual MOT on my properties. In fact it might pick up things my tenants fail to report and could drive up standards generally. Provided it is not used as a cash cow for councils, government or private agencies and replaces the mishmash of licence fees etc.


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    A bit more accountability for tenants who do not look after a rented property. If tenants were legally obliged to maintain the property to the standard it was provided, then there would be far less substandard properties. Obviously no chance of that happening.

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    I was lucky enough to be at this meeting today, ably hosted by Mark Easton from the BBC. The report has some excellent stats which will be great for future PRS policy and I will be summarising the ones which I think are most useful.

    I think there was broad agreement that 'tick box' changes which have been made in the past eg the fast tracked retaliatory eviction rules, just haven't worked and have failed the sector, especially tenants. There is a lot of work going into the MOT type system and a lot of support for it, and from my perspective if this works, instead of licensing, landlords could be registered, agents regulated and homes with MOTs.

    I asked the question whether we should be housing vulnerable tenants and those on housing benefits in this sector as I think we can make the numbers work in some areas but not others, but that there needs to be a separate system to protect those tenants and support the landlords. However, it's time to accept that n some cases, the numbers just won't work, so we need social housing to help the 1mn people on council waiting lists.

    Happy to answer any questions you have, but please do read the report, it's really useful ( even if it's the exec summary and recommendations!) Be great to start a discussion on Property Tribes about it.

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    The Residential Property Surveyors Association is, this week, starting the first training sessions for member surveyors to deliver the new Mi Buy To Let Survey. This product delivers exactly what the report calls for. An annual MOT style inspection that considers all of the potential hazards highlighted by the Housing Health & Safety Rating System. But many of these hazards occur because of structural or condition related issues that go beyond the visible symptoms. So we combine the initial inspection with a thorough survey of the property to highlight deficiencies that are likely to lead to the development of hazards.

    So the system already exists to deliver annual MOTs on rented property. We don't need to reinvent the wheel, just make sure that responsible landlords have their properties inspected by trained professionals who can deliver clear and practical solutions.

    The Residential Property Surveyors Association (https://www.rpsa.org.uk) is a professional association representing the interests of independent specialist residential property surveyors. Working with software partners, RPSA members offer a range of survey products designed to be good value and to give clear information without the caveats and excuses too often seen in survey reports in the past. The Mi Buy To Let Survey is a unique product that has been developed to help landlords deliver decent and safe homes, and is prepared by surveyors who have been specially trained to identify the health and safety hazards that can affect rented property.


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    Can you provide an indication what the cost would be for Mi Buy to Let Survey and provide more details of what you mean by "combine the initial inspection with a thorough survey of the property to highlight deficiencies that are likely to lead to the development of hazards". 

    I assume from the wording that things like the annual gas safety check and electrical checks will still be required to be completed separately.

    My own view is that the proposed annual property MOT is excessive and will not benefit landlords or tenants.

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    The cost of the Mi Buy To Let Survey will vary depending on the size and age of the property, but for a typical mid-war 3 bed semi would be around £500.

    For this you would get a thorough survey of the condition of the property, combined with an assessment of health and safety hazards. The health and safety review is based around the 29 hazards identified in the Housing health & Safety Rating System (HHSRS) but considering how those hazards are affected by the construction and condition of the property.

    You are correct that gas and electrical reports would still be required.

    The survey has been designed to facilitate an annual "mini-survey" review that would consider the current status of hazards highlighted in the original report as well as looking for any "new" hazards that have arisen.

    The most important consideration is that, in developing this product, our primary aim is to help landlords deliver decent, safe and comfortable homes for tenants, while protecting their investment .

    I hope that helps!

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    And this £500 cost is to be an annual cost? How on earth is adding 40+ to the monthly rent going to help tenants. Or are ongoing inspections considerably cheaper seeing as the comprehensive assessment of the building has already been done? Not wishing to cause offence but this looks like another cause being pushed forward by those hoping to cash in on the proposal.

    If adopted an mot style inspection needs to have a sliding scale as the report notes 2/3rds of property are in good order why are these being used to subsidise the fees to find the substandard properties and what will this do to catch those properties that will remain under the radar.

    Another rather daft headline grabbing proposal that will not tackle the “rogue” element. Councils need to be funded or incentivised to check benefit records / council tax/ hmrc/ land registry to identify the root cause of poor rented accomodation and prosecute and fine accordingly.

    Once the rogue element are removed from the sector have another report and see how many homes are then considered unfit, not many i would guess.

    As always the social sector is ignored, as grenfell has demonstrated standards within the council/social sector are in many respects worse, legislation is ignored, councils can’t prosecute themselves , right to rent, eirc’s etc are not applicable. Yet they are much better funded in that huge amounts of public money are doled out to sort issues out, the decent home standard cost around 40 billion and the aftermath of grenfell will end up being another significant sum.

    Add these costs to the rather opaque social housing funding model and the prs starts to look like a bargain.

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    Philip.... No, the circa £500 is not an annual cost. That's just for the initial survey and inspection. Many health and safety hazards are the symptoms of defects with the fabric of the property, so establishing its condition on day one is essential.

    Annually, thereafter, and depending on the specifics of the level of inspection determined, the fees would probably be in the region of £150.

    No one has yet defined what an annual MOT would assess and so it is very difficult to give precise figures. But this is an ongoing discussion. And I will certainly be involved in meeting with industry stakeholders, including government, to suggest a pragmatic approach that delivers benefits for landlords and tenants alike.

    As you rightly indicate, eradicating the rogues has to be the primary concern. But at the same time, if we can find ways to establish a credible and valuable regular reporting procedure, then we help to protect the landlords investment as well as providing decent homes for tenants.
    And, of course, we need to be mindful that landlords are under increasing cost pressure.

    At the moment the only way of consistently assessing the health and safety of a property is using the Housing Health & Safety Rating System. But this has been shown to be not fit for purpose as it is just too complicated and inconsistent. The Mi Buy To Let Survey that we have developed starts from the principal of an inspection by a trained property professional who is then able to extrapolate his findings into how it affects the health and safety of the property. And by using a common software platform, we can ensure a much more consistent delivery of information.

    Anything that costs money is never likely to be popular. But by helping landlords maintain the value in their properties by highlighting defects in the condition, the cost will be, at least partly, mitigated in reduced repair costs further down the line.

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