Collaboration: the key to weathering the private rental crisis
By Richard Dawson, Rental Sector Expert, RentGuarantor
The Private Rental Sector (PRS) is undeniably in need of some assistance, as recent changes to legislation and global events have put increased pressure on landlords, driving many out of the market. This has been reflected in a recent Propertymark report, which shows the average number of tenants per branch has reached a new peak of 144, without the supply of lettings properties increasing. The lack of housing is leading to growing uncertainty in the PRS, as bidding wars ensue for the homes that are available and rental prices are inevitably driven higher – something that is far from desirable amid a cost-of-living crisis.
With the government whitepaper, A Fairer Private Rented Sector, outlining further restrictions for the PRS, we are expecting to see more landlords exit the market. This will continue to reduce the supply of privately rental homes and only serve to exacerbate this crisis further.
Ultimately, we need to see additional government support provided to the sector. The PRS is calling for legislation to fully regulate the market and more investment is required to advance plans to build new homes. But with the UK economy heading towards recession, assistance is unlikely to reach the sector any time soon. In order to see the PRS through the difficult times ahead, landlords and estate agents must work together to support tenants, protect the industry and drive future changes.
Strengthening the landlord and lettings agent’s relationship
While there is already a great deal of collaboration between landlords and lettings agents, this relationship can be built upon further, to create mutual benefits for both parties and the sector as a whole.
One way in which this can be achieved is through sharing education and guidance. With years of experience behind them, lettings agents have a wealth of industry knowledge, which can be particularly useful in supporting first-time landlords entering the market. Many who are new to this territory, particularly those who have inherited a property or are taking on someone else’s responsibilities, aren’t fully au fait with the rules and regulations in place – particularly those recently introduced. While managed services can provide additional peace of mind to new landlords, offering to educate around best practices and industry requirements will help them get things right first time around and attract more property owners to the market.
Additionally, property owners and lettings agents can come together to provide an immediate solution to the diminishing rental stock. We’re not suggesting they head down to a site and start laying bricks together, but with nearly 38% of homes in England being under occupied – meaning they have two or more spare rooms – there is clearly space available. To provide additional housing options, landlords could consider discussing the possibility of offering rooms with existing tenants that may have extra space, in turn lowering their rent. Lettings agents can also assist by increasing the options available for homeowners to list an individual room to rent and adding more lodger sourcing services. Not only will this increase available housing, it can also offer homeowners a way to subsidise their income, with a tax exemption on earnings up to £7,500 through the ‘Rent a Room’ scheme.
A wealth of new offerings have become available to the PRS, ranging from rent guarantor services to tenant’s insurance, that can provide tenants with additional levels of security. By collaboratively offering these additional services, landlords and estate agents will not only be providing a better service to those renting their properties, but they will also reap the benefit of increased financial security on their own investments.
A united front
Alongside the immediate support needed in the PRS, a push towards a solution that will protect the sector’s future is necessary. While the initiatives outlined in the Renter’s Reform Bill are a step in the right direction, the adverse effect of driving landlords out of the market is further damaging the sector, bringing it to the verge of crisis.
Legislation to regulate the whole rental sector in England, alongside further plans to build more housing for the rental markets, is what is truly needed. This will help ensure everyone working within the industry is licensed, adheres to a strict code of practice, and holds a minimum of a level three qualification – leading a fairer sector, not only for tenants, but for landlords and estate agents as well.
The Regulation of Property Agents Working Group (RoPA) have long called for government regulation and by supporting these movements, industry leaders can help drive the real change needed in the sector.
Driving change together
Though there is uncertainty in the future of the PRS, caused by a reduction in available housing, changing legislation and an increased cost-of-living, there are ways in which the sector can be supported by those within.
Through offering each other mutual support, landlords and estate agents can begin to drive the change needed within the sector and influence government bodies to act accordingly. In addition, through the provision of additional support and security to their tenants, both parties can further secure their own properties and income.