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The private rented sector is usually associated with older properties and certainly, if media are to be believed, these are the older, worse condition properties. Poor energy efficiency, financial hardship as the tenants try to keep themselves warm, this is the picture that private rented homes often present to the World.
There are many very high standard private rented homes, but these are not likely to hit the headlines. We would rather read bad news and believe it than understand the true picture.
That may be about to change, as there is some good news. Homes England has, for the second time, put funding into the Government’s real estate investment trust (REIT) to bring the total amount raised to £250 million in this round of funding.
REIT invests in the private rented sector by building new properties for their use only. It was launched in May 2017 with an initial public offering of nearly £25 million; almost 10 per cent of that was donated by Homes England. When at the beginning of February, the REIT announced that it intended to raise £250 million, which would be part of its’ target to raise £1 billion for investment in 5 years, Homes England provided £5 million of the last funding round by selling shares in the company.
These are large sums and it is good news that the private rented sector seems to be finally taking centre stage and attracting the kind of funding needed if it is to have a significant impact on the shortage of properties that we are experiencing in the UK. Will this influence the older, poor quality private rented properties? It is difficult to make a judgement on that, but my gut instinct is ‘no’.
The properties built through PRS REIT will almost certainly be high-quality properties, ideal for ‘Generation Rent’, who, unable to get a step on the property ladder, will still aspire to the kind of homes they would buy, if they could. They will look for these through corporate landlords, who will accept them based on high deposits paid, rent in advance and excellent references.
This may seem perfectly acceptable to those responsible for allocating this funding, and to those fortunate enough to obtain one of the newly built properties, but what of the rest?
Is it fair that the Government should be backing something and giving their support to something which will not be equally accessible to all in need of a home? Should Government support be given to corporate landlords? Should there not be help available to help the small landlords, those who house the most vulnerable, with small, sometimes no, deposits?
It would take substantially less money to put some help in, would encourage and motivate the private sector landlords and may make engagement with Government agencies/local authorities more likely. But then, does help for the small landlord and their vulnerable tenants matter to Government and Big Business? These kinds of schemes perhaps give us some idea.
For advice on buy to let issues – Ask Sharon