Opinion: Can the PRS do even more to help meet housing need?
Published by Max Salsbury for 24dash.com in Housing
Defend Council Housing rallies support ahead of Commons inquiry
By Alan Ward, chairman, Residential Landlords’ Association
The pendulum of housing investment has swung from the public to the private rented sector in the last decade. Individual investors now provide almost one in six homes.
Between 1999 and 2011, the proportion of households renting from a private landlord almost doubled to more than 17% of all households - and that figure is set to double again over the next two decades. By 2032, its estimated there will be more than 11.6m of us across the UK renting in the private sector.
But as house prices continue to rise, and the social housing sector is increasingly squeezed of public funding, is there potential for the private rented sector to do even more to help meet housing need?
Already the government has recognised the need for more privately rented homes. Its £1bn ‘build to rent’ fund and £10bn debt guarantee scheme are designed to encourage corporate investment. But we believe there’s more that can be done across the board to boost the contribution of the private rented sector. After all, 70% of private landlords let out just one home. If we could help them to do more, we could make a serious dent in the housing crisis.
So how can we mobilise this small-scale army?
Firstly, we’d like to see reform of the tax system to encourage investing in homes and raise property standards. A range of measures - including roll–over capital relief tax when sale proceeds are re-invested in a rental home, a capital allowance for repairs and VAT relief on refurbishment - could all help turn properties into more homes for rent.
Then there are planning reforms. Relaxing the rules on turning houses into small shared homes would allow for a better use of our existing housing stock. Councils often claim these rules prevent areas being taken over by student housing. But small houses in multiple occupation are not just for students. They provide desperately-needed homes for young professionals and key workers.
We’d also like to see help for smaller landlords who want to develop new homes to rent. Small public sector sites or empty buildings that wouldn’t appeal to the big developers should be made available to private landlords, potentially with the public owner retaining an interest in the land or a covenant for social rental for a limited period. Small landlords can move quickly to get new homes built, or redundant buildings converted.
Finally, we’d urge politicians to reject calls for rent controls in the private rented sector, which would only serve to discourage investment in the sector at the very time when it is needed most. Rather than bringing in new restrictions, we need to be encouraging all landlords to expand what they do, and so to offer tenants more choice. By encouraging the sector to grow we can tackle the shortage of homes which drives rents up.
Taken together, the measures we suggest would start to unlock the untapped capacity of the UK’s private landlords. At a time of acute housing shortage, the private rented sector is a key part of the solution. The sector is already growing. Let’s help it flourish to provide more of the quality homes our country so desperately needs.