Tenants, landlords and buy-to-let lenders are all jostling to keep pace with one another. Record breaking is commonplace and growth seems exponential. But beneath this expansion, long-term challenges are creeping up on the private rented sector.
Unfortunately, an ageing stock of rented properties is straining to keep up with the pace of change. Indeed, according to the latest English Housing Survey as many as 37% of homes in the private rented sector were originally built before 1919. Based on this data, the average home to let in the UK is around 70 years old.
Of course, there are many features of older homes that positively add value. For example, those which are still standing seem to be made to last. In fact many tenants, landlords, and lenders have their own opinions about some of the younger generation of new build homes and their overall durability. Additionally, age itself wouldn’t be a problem if all these homes had been kept in tip-top condition.
However, some of the old homes in the private rented sector are starting to show their age. For example, more than a third of homes (35%) have been classified as ‘non-decent’ for reasons including a lack of general repair, and heating unable to provide a minimum level of thermal comfort.
Moreover, there appears to be an issue with the type of stock available, and how this matches demand from modern households. Homes in the private rented sector are four times as likely to be overcrowded compared to owner-occupied households. And this trend is actually worsening – with the level of overcrowding in the private rented sector almost twice as bad as in 1997.
Sadly, this isn’t just an issue for England and Wales. For example, Argyll and Bute Council estimate that two-thirds of the local private rented stock is ‘in need of serious repair’, and the situation across most of Scotland is very similar.
The problem stretches from Land’s End to John O’Groats. And even smart areas of the capital are not immune. In Westminster, almost 40% of private rented homes are failing to reach the official ‘decent homes standard’.
But of course, while all levels of government are aware of the problem, the risk lies with landlords and mortgage lenders. As any good banker or landlord will tell you, quality is as important as quantity when it comes to investment property.
For particular landlords and lenders, the volume of decaying properties severely worsened in the wake of the financial crisis. For the rental stock as a whole, and in most individual cases, it’s true that these long-term trends are destructive.
But they are preventable with the right course of action. While more than a third (35%) of private rented homes may now be ‘non-decent‘, in 2006 this figure stood at almost half (47%) showing there has been a steady improvement over the last decade. That said, far more still needs to be done in order to ensure tenants can access good quality rental accommodation.
Now that the wider economy is showing signs of improvement, it’s important for landlords to properly invest in the maintenance of their housing stock in order to safeguard them for the future. When it comes to easing the pressures on private rented housing stock, renovation is just as important as rebuilding.
