The private rented sector (PRS) needs to be top of the list when it comes to levelling up.
It’s incredibly diverse in terms of quality. You have brand-new build-to-rent (BTR) developments that serve a purpose at the higher end of the market versus 2.8 million people who live in substandard private rented accommodation, from poor heating to hazardous air quality – a figure the government wants to halve by 2030.
We need institutions to also help fund the lower end of the PRS through their social impact allocations, working hand in hand with local authorities and central government to tackle the problem at its heart.
Sticks without carrots will never work. There are plenty of private landlords who are responsible and provide quality housing who we desperately need to remain in the market but who are being squeezed out of the sector by various taxes, stipulations and restrictions.
If funds in joint venture with developers were subject to tax breaks – for example for investing in and improving existing PRS – that could be an initiative that really would move the dial.
Currently, lenders and investors are not looking at any products that are below a ‘B’ in their EPCs but realistically most of the existing older PRS stock will be significantly below this level.
If developers and funds also had a stay of execution on the dates for upgrading EPCs subject to investment into a number of KPIs over time, then this could be a solution.
Then there is the issue of understanding within the public sector. There is a real knowledge gap within local authorities, which do not understand the vast difference between BTR and private landlords and, as such, do not work effectively with either. This leads to planning, funding and resource issues.
As part of the levelling up of the new government, more education and awareness raising are needed from a property viewpoint within local authorities in order for them to be empowered to help collaborate to make positive changes that are relevant and realistic.
Angus Irvine, head of residential development agency, Rapleys