All change in Northern Ireland’s private rented sector
The Department for Communities (DfC) has published its proposals for change to help make the private rented sector a more attractive housing option. CIH Northern Ireland policy and public affairs manager Justin Cartwright takes a look at the sector and the department’s proposals.
Around one in five households in Northern Ireland call the private rented sector home. The local sector has been growing since the 1990s – this is partly due to the makeup of overall housing supply, with proportionally fewer social homes and more private homes now being built. Some households who would have lived in social homes in the past now rent privately, once we consider lower rates of home ownership among low income groups.
Northern Ireland’s pre-crash house prices also made property attractive as an asset. By 2007 we had one of the highest average house prices in the UK behind only London and the South East, and buy-to-let landlords made substantial investments in new-build properties during the 2000s.
Post-crash, barriers to ownership were erected in the form of tougher mortgage lending criteria and larger required deposits. This was true not only for buy-to-let investors but also for owner occupiers, raising demand for private rented homes that was increasingly met by individual landlords. This group includes accidental landlords who find themselves with surplus housing through happenstance, or necessity in cases of negative equity.
These changes present a number of challenges. One is property conditions – the increase in newer homes during the 2000s coupled with general levels of investment by private landlords (including with grant aid) served to substantially decrease the rate of property unfitness from 8.7 per cent to two per cent over the decade to 2011. However, this figure is likely to remain around this level reflecting less currently available funds for investment. To put this unfitness rate in context, it is twenty times higher than in social housing as a proportion of total stock, mainly due to older privately rented homes in the sector.
Another challenge is management standards. A sizeable minority of tenants are dissatisfied with the way their landlord deals with repairs and maintenance. The average landlord is part-time, juggling tenancy management with another full-time profession, and without ready access to advice that helps to facilitate good management practices. (CIH’s ‘Learning to let’ course helps to give private landlords the knowledge, skills and confidence they need to ensure excellent standards of practice and ensure full compliance with all legal obligations!)
In tackling these challenges it’s important to remember the big picture – overall there is a high satisfaction rate in the sector with most private tenants on good terms with their landlord and most satisfied with the service provided. This demonstrates the need for a proportionate regulatory response, including by weighing the cost of regulation for landlords against the demonstrated link between a landlord’s investment levels and property standards.
DfC has recently published proposals for sweeping changes for the sector, which include tackling the above challenges by:
- gauging the appetite of institutional investors from Great Britain to invest in Northern Ireland
- scoping out the role of housing associations in the private rented sector
- reviewing the impact of the CIH’s ‘Learning to let’ project and exploring the funding options for an extension of the course
- piloting a dedicated landlord advice line, and
- amending the landlord registration regulations to incorporate a fitness declaration at the point of registration.
We have been involved in helping to shape the changes and we have broadly welcomed the final proposals. We know that for many people owning a home or renting from a social landlord are the preferred choices, but the reality is that these tenures are becoming increasingly harder to secure. So making sure the private rented sector is fit for purpose for people who need it is more important than ever.
Get the inside track from DfC officials on the department’s proposals for change for the private rented sector and have your say on what the sector should look like at CIH’s free ‘first to know’ seminar. Find out more and register