The PRS - Briefing for MP's

One of our Havant members "started to write to our new Labour MP in anticipation but sadly she was just pipped to the post by Alan Mak. A friend knows her personally and thinks she would have been good for our area." Rather than waste it - we include here for any new or returning MPs keen to understand the reality of the sector.

Key Points About The Private Rented Sector 

1- There is a fear among Landlords and agents that what was already a difficult environment to work in will be even worse under Labour. This is resulting in Good landlords leaving the sector, often replaced by those who do not understand, or care about the complex law around renting. If not leaving the sector we are being far more careful in who we let to. The stats may not show massive declines in numbers of properties rented but what we clearly see in this area is landlords going up market where demand is strong and rental income more reliable. The evidence must be in the numbers of people homeless or in expensive emergency accommodation.

2- There is a manifesto commitment to remove what has become known as the No Fault evictions procedure to regain possession of rented property. "No Fault evictions" is a misnomer. Landlords always have a good reason to repossess a property, most often it is because the tenant has defaulted on their obligations; neglecting the property, not paying the rent or exhibiting ASB. They may also need the property back for their own use or to carry out major works. Unfortunately because landlords do not have to provide evidence in court there are no reliable stats to prove this. Why would a landlord evict a good tenant, finding good tenants is a costly process and the property may be empty while looking. The court system needs major reform before the section 21 process is removed. Fear of being stuck with defaulting tenants is already resulting in landlords prematurely evicting high risk tenants or just selling up. We would like to see more research into the real causes of repossessions.

3- It is not in the Labour manifesto but there are calls for rent controls, these will not reduce rents and could even make life harder for renters.  I have tenants paying less than market rents because I am slow to apply increases. If rents were controlled I would put them up methodically every year. It is a lack of supply that makes renting so expensive. The only way to increase supply is to increase the incentives to landlords and not to apply more tax and regulation.

Tenants and their representatives complain about high rent increases but they never say when the rent last went up or how the rent compares with the open market.

4 - If there was not a desperate shortage of budget rented accommodation tenants would be able to avoid poorly maintained property (See Note 1 below). There are a few unscrupulous operators who take advantage of desperate and vulnerable individuals.

5- Local Authority Housing Standards officers go for the low hanging (easy) fruit because if they look where the standards really are bad, they know they will have to rehouse the tenants and they have nowhere better to put them.

6- It is a sad reality that there are some at the bottom of the ladder that would be much better off in a property that is safe but small or old and neglected than in a cardboard box under a bridge. High standards cost money to create and maintain. Some tenants look for the ideal property when all they can afford is basic, they then risk running up rent arrears,

BUT my key message is that we need better data on the causes of repossessions before changing from existing procedures.

Are repossessions the result of -

- Greedy landlords asking for excessive rents?

- Tenants inability to manage their finances?

- Tenants deliberate avoidance of paying rent?

- A reduction in the tenants income?

- Arrears built up by failures in the benefits system?

- ASB?

- Property neglect?

- Landlord wishing to sell?

- Landlord wishing to move into it?

When the only way to remove defaulting tenants is via the courts we will have the evidence but by then how many more vulnerable tenants will be homeless?

• Note 1: The Royal Institution of Chartered Surveyors (RICS) has warned that: "there remains a huge mismatch in the private rented sector (PRS), with demand continuing to significantly outstrip supply, leaving renters tackling ever-rising living costs and plummeting affordability levels". You can read RICS' commentary in full here.
• Note 2: Zoopla noted that: "Rental demand is down 25% over the last year but competition remains high, with 15 households chasing every rental home. This is more than double the pre-pandemic average of just six which was seen between 2017-2020." It continues: "we do not believe that the imbalance between rental supply and demand will improve materially over the next 12 months". The source for this data can be found here.