Respondents to the recent English Housing Survey highlighted concerns around the increased regulatory burden in the private rented sector, including the recently introduced Renters (Reform) Bill, as well as the cost of upgrading their properties to meet new Minimum Energy Efficiency Standards.
The survey showed that 23% of the properties surveyed are let out at an affordable rent, which is defined as less than 80% of market rent. CLA members providing affordable homes is essential to supporting villages and the economy in rural areas.
However, in the past five years 665 properties have moved from an affordable to a market rent largely because landlords are having to recoup costs due to regulation changes and the cost of upgrading to new Minimum Energy Efficiency Standards.
Changes since 2018
Since April 2018, 24% of respondents had sold at least one property, and 32% had changed use class, and a total of 703 properties were lost from the sector. The most common motivators for leaving the sector was the proposed, but as yet not implemented Minimum Energy Efficiency Standard of ‘C’ and a change in business strategy. The proposed removal of Section 21 was another factor respondents said made them leave the rented market. The properties changing use class were most likely to be converted to holiday lets or be left empty, further exacerbating the housing availability crisis, hardest felt in tourism hot spots.
In the same time period, only 612 properties have been added to the stock of rental homes, mostly through building new properties or converting redundant buildings, meaning there has still been a net loss of homes. Respondents indicated that they would have built more new homes but planning costs and delays prevented them from doing so.
The CLA’s recent lobbying around planning is vital for ensuring that this trend does not continue, including our ask for redundant farm buildings in protected landscapes to be able to be converted using permitted development rights. The statistics from this survey have been used to bolster our arguments that the planning process should be simplified and the use of permitted development extended.
Future of the private rented sector
If the government does not pay attention to past trends and future intentions. The sector’s future looks bleak, with more respondents removing properties from the private rented sector.
In the next two years alone, 44% of respondents intend to sell and/or change the use class of their private rented sector properties, but only 21% intend to build properties in the same time period. The main motivation for leaving the rented market is the increased regulatory burden, including changes to the Renters (Reform) Bill which have recently been introduced to Parliament, including the removal of section 21.
With problems with planning keeping respondents from building as many properties as they might otherwise, a significant net loss of properties is expected, resulting in a lack of rented homes available in rural areas.
Thank you to all our members who completed this survey.
We have already been sharing the results with Department for Levelling Up, Housing and Communities (DLUHC) Secretary of State Michael Gove, with the Housing Minister and key DLUHC civil servants.
The data that you provided is proving vital to our lobbying efforts, particularly around planning, regulation and Renters Reform.