Paddy Gray: The private rented sector today
Professor Paddy Gray from Ulster University will be speaking at and chairing our upcoming conference, Private Rented Sector - Getting it Right 2016. Below he outlines why this conference is so timely for the private rented sector in NI.
Many years ago when I was President of the Ulster Polytechnic students Union (now Ulster University) the main concern we had was poor conditions in the private rented sector. This was as the 1970s ended and legislation had just been introduced through the 1978 Rent Order to improve conditions in older properties. Many housing associations had formed to work alongside the NI Housing Executive in tackling the high levels of unfitness identified in the 1974 House Condition Survey, where one in five dwellings were deemed unfit for human habitation.
The 1977 Homeless Persons Act had not long been introduced in Great Britain. It was brought in following the broadcast of Cathy Come Home in 1966 and Shelter being formed as a result. Right to Buy had yet to be introduced. This would go on to sell off more than 100,000 social homes to sitting tenants and estimates show that over 20% of these are now being rented privately. Rachmanism was a term we were all familiar with (named after a landlord who operated in Notting Hill London in the 1950s and 1960s) signifying the unpleasant side of the property rental business. Indeed the sector retained that negative image right up to the 1990s and was a popular target for the media.
But things have changed since then, and the sector has experienced a surge both numerically and in popularity. From 2001 the sector has nearly trebled, growing from 49,400 in 2001 to 125,400 in 2011. Proportionately it has surpassed the social housing sector and is now a mainstream choice for many.
Factors that have contributed to this increase include the emergence of buy-to-let investors, demand from groups that would have traditionally accessed home ownership, inward migration and the importance of housing benefit underpinning the sector.
Across the UK, governments have sought to regulate and promote the PRS as a housing solution for low income households who would have previously accessed social housing. Over 70,000 households in the sector are currently claiming this housing benefit. Recent research carried out by the Joseph Rowntree Foundation has found that in the past 10 years those living in poverty in the PRS has almost doubled to 4.3 million. More than half of whom are working families.
We’ve also seen the emergence of generation rent, where young people are choosing, or indeed being forced, into this sector due to restrictions on lending, higher deposits and a lack of social housing available.
Owning one’s home is no longer a viable option for everyone, particularly the younger members of society. Intergenerational unfairness has grown where pensioners have never had it so good, yet over a third of young people feel they are worse off than their parents. Four in ten renters fear they will never own their own home and recent research shows high levels of concerns about housing amongst the 10-34 age group. The Bank of Mum and Dad (BMOAD) is now a top ten lender in the UK, providing £5 billion of loans at an average of £17,500 per property (many children of course cannot avail of this).
Landlords too, many of whom have entered the sector in recent years are facing new challenges. As more legislation is introduced and responsibilities increase, many are unaware of what is required of them. Recent research carried out by Gray and Mc Anulty for the NIHE found that just under a third of landlords were unaware of recent legislation and over two thirds did not use a letting agent, managing properties themselves. Many landlords have very high loan to value ratios and any fluctuation in interest rates will affect their ability to pay their mortgages. This puts an increased pressure on collecting rents and with high numbers of housing benefit claimants in the sector, welfare reforms are increasing the shortfall that tenants have to find. New rules on tax concessions and stamp duty coming into effect will further put pressure on the sector.
The Department for Communities is currently preparing draft proposals for change resulting from the Review of the Role and Regulation of the sector, and these will be published for consultation in the coming months.
The Housing Rights Private Rented Sector Conference provides an excellent and timely forum to debate many of these issues. Its an opportunity to learn from other jurisdictions on how to maintain a healthy sector that not only provides good accommodation, but also protects the most vulnerable whilst ensuring that landlords are not driven out by overly excessive regulation.
Speakers on the day include:
- Susan Aktemel (Homes for Good)
- Ben Beadle (TDS NI)
- Jennie Bibbings (Shelter Cyrmu)
- Professor Tony Crook (University of Sheffield)
- Minister for Communities Paul Givan MLA
- Professor Paddy Gray (University of Ulster)
- Dr Aideen Hayden (Chairperson of Threshold)
- Charlotte McHaffie (Scottish Government)
You can reserve your place online or by emailing [email protected].
Training on the private rented sector
Housing Rights provides a comprehensive two-day training course, which looks at the various aspects of renting privately in Northern Ireland. This course will next run in Belfast on 14th and 15th November. The course day programmes give an indication of the information that will be covered during the course. To find out more or book a place, contact Training Officer Bronagh Flynn.
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