Attitudes to PRS examined in new review

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by Lin Freestone

A review of the private rented sector (PRS) has been published, marking an important watershed. It recognises a move away from myth-driven policy decisions towards evidence-based recommendations that acknowledge the important contribution small landlords make to the housing mix.

The publication of the Review of the Private-Rented Sector, written by Dr Julie Rugg and David Rhodes, has been welcomed by the National Landlords’ Association (NLA), the leading organisation for private-residential landlords.

In the opinion of the chairman of the NLA, David Salusbury, the Rugg Review offers Government a number of policy options based upon sound and independent evidence. The rhetoric has gone and myths have been dispelled.

David Salusbury said the review demonstrates and encourages a commitment to grow the business of letting for smaller landlords. It also encourages larger-scale investment, where appropriate. This means tax incentives to encourage investment in quality housing across the board.

The review is a strategic assessment that does away with the claim there is some kind of crisis in buy-to-let, or the wider private rented sector.

It makes clear its doubts about build-to-let, stating that much of this debate reflects the attempt to construe residential letting as commercial letting, when in reality the two sectors are very different.

Furthermore, the review recognises that smaller landlordism does not necessarily mean financial instability. There is also acknowledgement that many cottage industry landlords are lowly geared and have unmortgaged properties, thus providing tenants with a high level of security.

The review has identified the fact that focused and targeted policies are needed to root out rogue landlords who do nothing but discredit good, smaller landlords. It highlights the critical role local authorities can play to manage the sector at a local level, with their existing and powerful tools. This requires a level of prioritisation for councils.

An end to the assumption that PRS tenancies always end against the wishes of the tenant is proposed in the review, together with a recognition that tenancies fail for specific reasons. Policy must focus on the reasons why tenancies fail, not on manipulating the tenancy framework itself.

The review concludes that much further work is now needed to determine how a model could work and there is unlikely to be a quick-fix solution. The NLA would wish to be at the centre of ongoing discussions.