A report arguing that regulation of the private rented sector is letting tenants down has caused lively debate in the housing sector across the internet. While emotions and opinions run high, the RLA want to take a moment to explain thinking and basis of the arguments put forward.
“The RLA is pleased that the latest report from Professor Ball has prompted discussion around regulation in the private rented sector. However we feel that on behalf of our members we must respond to claims on the back of this report that “private renting is one of the most profitable businesses that you can run and the regulatory ‘burden’ is illusory.” The argument that landlords are out to make huge profits on the back of their tenants is nothing new, however this does not stand up to scrutiny.
The most recent data on the profile of landlords in England, contained within DCLG’s ‘Private Landlords Survey 2010’, notes that:
- 89 per cent of landlords are private individuals, likely only to be renting one or two properties out rather than hoarding multiple properties in the pursuit of profits at any cost.
- 79 per cent of all landlords earned less than a quarter of their income from letting properties.
- 21 per cent earned no income at all from their rental property.
National Landlord Registers, are suggesting target compliant landlords that are already known. Increasing costs to be able to provide rental accommodation will only be passed on to tenants in the long term. As these landlords increasingly feel the burden of licensing and registration schemes so does the risk that good landlords will exit the market.
The RLA is working hard with Central Government on a ‘How to rent’ package that will hopefully educate tenants and landlords and start to drive poor landlords out of the market. We are also putting together proposals for a workable long term tenancy agreement that maintains the balance of the huge demand for short term rentals with the increasing demand for longer term security for older renters and families and protects both landlords and tenant.
We are committed to working towards creating a private rented sector that provides flexibility when required and security when needed but above all a sector that promotes high standards so that the PRS is a first choice and not seen as second best.