Private rented sector
The private rented sector has grown and improved enormously in recent years and accounts for approximately 16.5% of all households, or nearly 3.8 million homes in England.
The private rented sector offers a flexible form of tenure and meets a wide range of housing needs. It contributes to greater labour market mobility and is increasingly the tenure of choice for young people.
The government wants to see a bigger and better private rented sector and believes that the most effective way to make rents more affordable is to increase the supply of new homes.
We are investing £1 billion in a Build To Rent Fund, which will provide equity finance for purpose-built private rented housing, alongside a £10 billion debt guarantee scheme to support the provision of these new homes; and up to 30,000 additional affordable homes.
In October 2013, we published our response to a recent select committee report on the private rented sector. Our response sets out an ambitious package of proposals to ensure all private tenants get proper protection from their landlords. This will include:
- raised standards on the condition of rented properties
- greater protection for tenants against hidden agency fees and improving tenants’ access to longer-term family friendly tenancies
In addition, a new model tenancy agreement is being developed, which will provide tenants with a clear guide to rental contracts. This will enable tenants to identify which clauses in their agreement are optional or unique to that property, helping them to negotiate longer fixed-term tenancies and demand greater certainty over future rent rises.
We are also supporting consumers by requiring all letting and property management agents to become members of an approved redress scheme - so consumers can complain and seek compensation if agents’ fees are not transparent. Legislation will be in place by October 2014.
In the few areas where there is bad practice, £4.1 million has been allocated to 23 local authorities to tackle rogue landlords, in addition to the £2.6 million the government has pledged to crack down on ‘beds in sheds’.
£10 billion housing debt guarantees for private rented housing
The private rented sector housing guarantee scheme supports the building of new homes for the private rented sector across the UK, offering housing providers a government guarantee on debt they raise to invest in new privately rented homes. This will help to reduce their borrowing costs, increasing the number of homes they can afford to provide.
The debt guarantee is designed specifically to attract investment into the private rented sector from fixed-income investors who want a stable, long-term return on investment without exposure to residential property risk. The scheme rules for the private rented sector housing guarantee scheme were published in February 2013.
The government is open for direct discussions with interested parties that are eligible in line with the published scheme rules and can raise their own debt finance. We will be looking for applications that comply with the scheme rules and can demonstrate:
- a solid management structure
- suitable asset cover
- a viable exit strategy
- robust rental demand
- are clear on where and how they will raise the debt
Please email firstname.lastname@example.org if you would like to discuss a specific proposal.
The government has recently issued an invitation to tender inviting applications from the market from organisations capable of sourcing funding and on-lending it to borrowers in line with the scheme rules. Further detail about this opportunity is available by registering on the procurement portal.
Private Rented Sector Taskforce
The expert Private Rented Sector Taskforce has been established by the government to improve quality and offer a wider choice to tenants living in privately-rented accommodation across the country.
The taskforce brings together developers, housing management bodies and institutional investors to help them provide more housing for private rent and to increase the size of the sector.
The taskforce is headed by Andrew Stanford. Andrew is the Managing Director and founder of Stanford Mallinson, a property and asset management company, and was formerly Head of Cluttons Residential.
Taskforce members that took up post in April 2013 are:
- Julian D’Arcy of Kirkby Capital, a former regional chairman and proprietary partner at Knight Frank
- Joanna Embling, a property consultant and chartered surveyor, specialising in urban redevelopment and a former equity partner at Cushman Wakefield
- Dominic Martin, senior analyst at EC Harris and a qualified surveyor