The Joseph Rowntree Foundation has recently published a report on the role of the Private Rented Sector in the provision of affordable accommodation.
The report does not seem very optimistic. It does not believe that the PRS will grow further as a percentage of the housing market although it may grow as a consequence of the growth of the market as a whole. It also takes the view that renting in the PRS is a lifestyle choice for a period of time and does not provide lifetime homes.
From an economic point of view the report concludes that institutional investment in the sector is and is likely to remain low. This is concerning given the slowdown in the ‘buy to let’ market and the reluctance of new investors to enter it.
The report also concludes that there is little value in legislative change to increase security of tenure or to introduce rent control as the effects of this will simply be to reduce supply for another part of the PRS. Equally, subsidising one type of tenure will crowd out those who do not fall into that category. This point seems to ignore the fact that the state has, in effect, been subsidising a large part of the PRS for many years by the provision of Housing Benefit and is actually the biggest buyer in the market as a result.
However, the report will be pleasing to some landlords who oppose further regulation of the sector and will certainly bolster the determination of the Coalition not to get involved in the PRS. For those who feel that the sector badly needs an increased level of regulation the report will be less welcome. It also holds out little hope for those (which certainly includes the government) who had intended that the PRS would be a key part in resolving the current and projected housing shortages.