Author: RLA PEARL

The impact of regulation on the private rented sector

Though everyone seems to recognise the importance of market processes in the private rented sector, the regulatory burden is high and growing. The regulatory machine has swept along in a series of piecemeal measures driven by populist debate, many of which claim to have identified another ‘market failure’ requiring state controls. In addition, court rulings develop precedents that have to be followed in the future; adding further layers to regulatory creep. There is a growing understanding in policy circles of the substantial scale of operating costs in the private rented sector, estimates of which range up to 30-40 per...

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Why governments should not enforce long-term contracts in the UK’s private rented sector

This report argues that recent proposals to introduced fixed-term contracts and bans on real rent changes within them are poorly thought out. If such tenancy rent control schemes were enforced, they would fatally undermine the huge increase in the private rented sector of the past two decades. Despite claims to the contrary, landlords would face higher risks and lower returns; while the beneficiaries amongst tenants would be few and the losers many. Accommodation shortages would grow and general rent levels would rise. Some of the most vulnerable groups would be amongst the greatest losers. It is not low income...

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Investing in Private Renting

In 2011, we commissioned Professor Michael Ball of the Henley Business School, University of Reading to investigate the true cost to landlords of renting out property. The Report highlights that rents remain significantly below their early 2008 levels, when adjusted for inflation. The report used a new economic model fed with financial data from over 200 landlords. Following a survey of landlords’ costs and returns, the research found that present rent levels do not cover landlords’ expenses when all factors are taking into account, including refurbishment and borrowing costs, agents’ and legal fees, voids and arrears, energy and safety...

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