PRS (Private Rented Sector) Crisis – Food for Thought

PRS (Private Rented Sector) Crisis – Food for Thought

Everyone in the property industry must now be acutely aware that there’s a growing crisis in the private rented sector due to the lack of suitable properties available, and this has been highlighted by councils up and down the country. The District Councils Network, which has a network of 183 councils across England; warned that a sharp rise in landlords selling up or converting their homes into Airbnbs is creating a big problem.

Some three quarters (76%) of councils said there’s been a rise in housing waiting lists, causing more people to lose homes and making it harder to find permanent accommodation for those in need. Half (48%) of these councils said they were now experiencing a significant pressure on housing services as a result, to such an extent that they have called for the government to invest in more council housebuilding and raise the benefit cap.

Cllr Sam Chapman-Allen, chair of the District Councils Network, said: “This survey reveals a perfect storm of problems creating a crisis in the private rented sector across the country. Now the government’s Eviction Ban has ended, this is a problem that could get worse, with councils also seeing an increase in the numbers of tenants needing housing support due to increased evictions from rent arrears. During the pandemic, district councils and the government worked together to help protect those who are most vulnerable; through the Everyone In initiative, the temporary banning of no-fault evictions, and other measures such as furlough and the Universal Credit uplift. We need to urgently tackle this issue by permanently lifting housing benefit for tenants in private rented housing and for an increase in government support to invest in a renaissance of council house building to create homes, jobs and growth.”

Shortages are particularly bad in councils’ areas popular with tourists, with landlords switching their properties to more profitable short term holiday lets. One council in a popular tourist destination in the South-West of England has reported a nearly 80% drop in the number of open-market, long-term rental accommodation available in their local authority area over the last three years; with many landlords leaving the market or providing short term accommodation for holiday makers instead.

This problem is compounded by rents in the private rented sector reaching a thirteen year high according to Zoopla, rising by 6% year-on-year.

Councils are reporting that this rise is forcing some long term tenants to apply for hardship support from their local authority, with some council areas seeing rents rise to over a third higher than the average salary in their local area. They warned that the housing benefit many receive will not be sufficient in the longer term, as the government looks set to keep Local Housing Allowance rates, which determines the amount of benefit received, frozen over the next year.

According to the report some landlords are leaving the market due to the impact of the pandemic, with tenants unable to afford their rents. Meanwhile landlords are moving into properties themselves.

The District Councils Network wants the government to give councils the tools to create their own permanent housing, for people in their communities in hardship. District councils said they stand ready to work with government to proactively increase the supply and quality of homes for benefit claimants, ensuring those in need can have a permanent roof over their heads in their local communities in the future.

Whilst this doomsday scenario is balanced to some extent by the existence of a new generation of landlords, coupled with some existing ones expanding their portfolios; the numbers entering the sector are currently less than those leaving or proposing to do so.

There is a general understanding that the sector needs high standards and regulation, but it must work for both landlords and tenants – fairness and transparency going hand in hand so both sides can see and feel the benefits. At the same time, the other issue that needs addressing is the suitability of the property available. A lot of the people requiring accommodation are couples or families with children; whilst the majority of homes, coming to the market, are new flats and HMOs. Unfortunately, these are not compatible with the needs of the most wanting and vulnerable.

The message and drum have been echoing across the land for some time now; the Government needs to wake up, listen and act on this nightmare situation that only threatens to become more widespread and dire!