State of the PRS – 2019, Quarter 2

State of the PRS – 2019, Quarter 2

Over 2,700 people responded to our survey – given this was shortly after our fieldwork on Section 21 had been completed, this volume of responses was particularly appreciated.

That topic-based survey meant the fieldwork for this ‘State of the PRS’ report was undertaken in early July, rather than late June. It focused on tenant fees and licensing issues and how they were influencing rent and portfolio decisions. 

It also collected views on ground rents and examined their rate of increase and the effect on the PRS.

landlord confidence

There are now more than ten times the number of landlords who stated they were “much less/less confident” as “much more/more confident”. Furthermore, over one-landlord-in three declared that they were now planning to sell at least some of their portfolio over the next twelve months.

Tax & regulatory change were among the key reasons landlords are considering their position in the sector.

Such a large market exodus could have severe consequences for the supply of homes in the UK.

Licensing & enforcement

Only a small proportion of landlords involved in licensing schemes believe those schemes are delivering benefits and improvements in the PRS.

One clear message for local authorities who wish to work alongside landlords is that they should be more transparent in how licensing revenues are spent: Local authorities will find a more positive landlord response were they better able to demonstrate an impact between licensing and reductions in anti-social behaviour in target areas.

Tenant fees, deposit schemes & landlords

Landlords are now facing higher fees from lettings agents. Many landlords have acted already or, are considering responding to these higher fees, by either (i) looking to online agents or selfmanaging letting activity (ii) charging higher rents to compensate for the higher fees they themselves face.

Tenant deposit schemes are now commonplace, but  evidence suggests landlords are less than enthusiastic about the role of these schemes as adjudicator.

Property & Tenure

A small proportion of landlords were finding their ground rent was increasing at an average of over 8% pa.  Leaseholders of flats were much more likely to pay a high ground rent than leaseholders of houses. However, the research found ground rent increases were a significant issue for only a small number of landlords at present. This may be a subject which becomes more prominent in the future.

Nick Clay

Nick Clay MSc, PgDip is the lead Research Officer for the NRLA, having previously worked for the Residential Landlords Association (RLA). Before joining the RLA Nick had a successful career working for various consultancy companies, Whitehall and academia. He has specialised in advising clients on business support, promoting entrepreneurship and evaluating labour market initiatives. Nick worked as a Senior Economist for a large multi-national consultancy advising Whitehall and City Regions on major infrastructure projects.