Taken from the November Issue of Housebuilder magazine.
Rebecca Eatwell, Director of communications consultancy PPS Group’s Northern office asks whether the Private Rented Sector is in need of an image overhaul.
Whether you agree that it’s the next big thing or not, everybody’s talking about the Private Rented Sector (PRS). A model borrowed from the US and Germany, it is officially the fastest growing form of UK tenure. Demand for private tenancies is anticipated to rise to 1 in 5 households by 2016. Whilst London still has the highest proportion of PRS, Leeds, Manchester and Liverpool are some of the top areas in England.
The sector has previously been characterised by private landlords buying properties designed for sale, rather than developments designed with the long term private tenant in mind. Often this has meant poor quality stock and therefore poor quality tenants. If you were to ask Joe Bloggs what kind of person lives in temporary rented accommodation, the answer would most likely be “students”, “benefit claimants” or “migrant workers”. For many, this immediately conjures up an image of bad tenants, rogue landlords and long-suffering communities.
For the nearly two-thirds of us that live in owner occupied homes it’s easy to assume that given the opportunity everyone would want to own their own home. However the British public haven’t always been home owners. According to the Office of National Statistics, in 1918 the majority, or 77%, of households in England and Wales rented. By the mid 1950’s this picture had started to rapidly change, with ownership continuing to increase to a peak of 69% in 2001. However, home ownership has started to fall with the number of people getting a mortgage falling by three quarters of a million between 2001-2011. This is in part due to the recession, tighter lending requirements and higher house prices, but does it also reflect our changing lifestyles?
Having spent a number of years living in rented accommodation in central Manchester, my personal experience is testament to the fact that rented accommodation appeals to all sections of society. Young professionals, families and older people increasingly want the flexibility that PRS offers but in a community they can feel at home in. Across the UK as our circumstances have changed, with changes in family formation and an ageing population, the flexibility of PRS means it appeals to people of all ages and social backgrounds.
The Government’s focus on PRS has traditionally been on improving the quality and stock of social housing. However in recent years a growth in demand for rented accommodation has led the Government to promote a new and improved form of PRS with a more positive image. In April 2013 the Department of Communities and Local Government set up the PRS Taskforce which was charged with kick-starting the new private rented sector. The Government also invested £1 billion in a Build To Rent Fund, to provide equity finance for purpose-built private rented housing, alongside a £10 billion debt guarantee scheme to support the provision of these new homes.
The increasing demand and Government support for rented accommodation has led to an influx in planning applications for purpose built PRS schemes. PPS is currently engaging with communities across the country on proposed PRS schemes and the poor image of rented accommodation is affecting how decision makers view the plans. At a recent public exhibition for a proposed city centre PRS scheme, I was confronted with a lack of understanding among some local councillors about what PRS is and often surprise that properties aren’t available for purchase. They came with a view that PRS is a ‘cheap’ form of housing that will bring social problems to the neighbourhood.
So, is it time for a rebrand? PRS isn’t as a cheap alternative but an opportunity to deliver flexible and quality homes for our changing lifestyles. As Richard Meir, partner at Argent, recently pointed out “PRS people are able to vote with their feet, so we need to encourage them to stay in one location through benefits in the local area”.
Purpose built PRS developments can put placemaking at their heart. Designs should include communal areas that create a sense of place and create communities that people want to live in. US statistics show that tenants with two friends in the building are 90% more likely to renew their lease.
As with any change, it can take time for people to adapt. Decision makers are used to the traditional tenure models and perhaps it’s as much about behaviour change as it is an image problem. Both will inevitably be solved as high quality PRS becomes the norm and we have a raft of thriving PRS communities that show it can work. However, in the meantime we need to demonstrate to decision makers and local communities that, when done properly, PRS can deliver sustainable communities and places that people want to live.