On Monday lunchtime a new report on the state of the private rented sector was officially launched. Commissioned by the Nationwide Foundation and conducted by Dr Julie Rugg of York University and David Rhodes of the Centre for Housing Policy.
I sat on a Question Time-style panel at the launch event in Westminster and I thought I’d give readers a heads up.
Firstly the thing is huge, at around 250 pages, even I didn’t have time or space to read all of it. So I am concentrating on the parts relevant to what I do, which is dealing with bottom feeder operators and criminals, for which the report gave me a new name which I shall use from now on
“The shadow PRS”.
Secondly, as you would expect the report is choc full of statistics drawn from a range of sources, which I shall stay away from, as anything to do with numbers makes my head hurt.
The Executive Summary
Instead, I will draw your attention to the executive summary and its conclusions, which are very interesting.
I’ll start with a criticism, which I may or may not have mentioned at the launch event (I’m writing this a couple of days before- so I don’t know), its to do with this passage:-
“Review Omnibus data suggest that letting agents are less likely to be dealing with property at the bottom of the market, and much more likely to be dealing with households in employment”.
Au contraire, and to be honest I doubt I will have been able to sit on my hands on that one.
In the past 5 years or so the number of dubious letting agents has quadrupled in every district we work in and in the vast majority of cases we are called in on, involving a range of legal issues, one of these ‘Shadow agents’ is involved.
Frightening Facts
The report highlights that over 80% of immigrants, even more in London, are housed in the PRS and many of these shadow agents target them, specifically because they are more vulnerable, through a precarious existence, low wages and language problems, not to mention limited options as a result of the Right to Rent.
The biggest thing you see working in the Shadow PRS (I’m liking the term already) is the way that the income generated by the sector as a whole is attracting criminals, referenced in the report:-
“A ‘shadow’ PRS with very high levels of criminality is in evidence, where criminals may be using rental property to undertake Housing Benefit fraud, illegal ‘rent to rent’ subletting, trafficking and drug dealing; this part of the market requires active police intervention”.
My crew, Safer Renting have been meeting with Police about using the Serious Crime Act 2015 to treat letting agents, whose managed properties are being used for criminal activities, as ‘Enablers of crime’ as one joint way forward for local authority enforcement types. The police, who joined their own dots and came to this same conclusion themselves and approached us for assistance, such is the increase in people trafficking and its concomitant activities and the involvement of many rogue agents.
Report recommendations
The report does not recommend rent control and seems keen to swap licensing in favour of a national register and an MOT style annual fitness test for properties.
It is also quite critical, although indirectly, of government policy that fails to understand the fluid nature of the PRS at all levels, from business models and tenure through the effects of welfare reform, increasing taxation and affordability.
One very astute warning reads:-
“Many privately renting households may be heading for a long retirement in the sector, with inadequate pensions to cover housing rented at market rates; and it is uncertain whether housing a large proportion of low-income tenants in the PRS is the most cost effective approach to meeting housing need.”
Other key points highlighted by the report that had me nodding are:-
- Sector interventions are too often based on London problems and then extrapolated to other types of area. Any strategy for the PRS needs a strong evidence base, to create robust benchmarks that can be used to assess progress.
- There is a need for policy interventions that are more neutral: overtly ‘pro’ or ‘anti’ PRS measures always distort the market. A more neutral approach increases the precision with which it is possible to understand problems and define appropriate solutions.
- Welfare Reform is undermining the economics of the bottom end of the PRS, with longer-term impacts that are not yet well understood. The LHA functions as a remarkably crude form rent control, with consequences that are proving punishing to tenants. If the PRS is going to be used to accommodate low-income renters, then the current system needs to work in co-operation with landlords.
And perhaps just as obviously:-
“There needs to be an entirely new regulatory framework for the PRS. The current law is confused and contradictory. The law should be revised and simplified. A new approach to letting should reframe this activity as a neutral consumer transaction.”
This last point sparked an interesting debate a few weeks back in a meeting I was at with Julie Rugg, where a colleague of mine spoke against adopting consumer protection language in the debate about housing generally, arguing that the rhetoric played into the increasing trend to treat housing as an investment rather than a home.
I understood her argument but I lean towards the consumer angle because it seems much more clearly defined and less fractured than housing law, which is based on medieval principles in no small part and usually completely impenetrable to the ordinary person.
Our own report
The gaps in knowledge of the Shadow PRS is being dealt with, my team are working on our own report, again with Julie Rugg and York University, to shed light on what is going on down the arse-end of renting, which will have its own launch in around 18 months.
You will be pleased to know I will be leaving the figures and statistics to someone else.
There is a companion report to the main one, titled:-
“Vulnerability amongst low-income households in the private rented sector in England”.
launched at the same time. A mercifully shorter document which, really provided little in the way of surprises.
Those on lower incomes and in disadvantaged groups sitting in 6 distinct categories:-
- Households with dependent children
- Households where a family member is disabled or unable to return to work due to long-term illness.
- Households over 65.
- Households in receipt of means-tested benefits.
- Households on a low income with no benefits
- Households headed by overseas migrants.
Basically 90% of the people I deal with, so I wasn’t surprised, although glad to see that the figures bear out what we see anecdotally.
Both good and even-handed reports.
Let’s hope they influence public debate.