16 May 2022

Enforcement is the key to success for the private rented sector (PRS)

Let’s be frank, the private rented sector (PRS) has a bit of a bad reputation, and it’s not the first choice for many people. A quick Google will likely bring up stories about soaring rents and illegal evictions, and we’ve all seen TV shows about “nightmare landlords”.

But stories are far more likely to make the news when things go wrong. “Private tenant lives quite happily for years without any significant issues” is not the headline that attracts readers. But if you dig a bit deeper, you might find the odd story about landlords who help their tenants through tough times by negotiating on the rent or a letting agent like Homes for Good that actively supports tenants on low incomes.

And if you look at the Scottish Government’s statistics, you’ll find that since 2010, rents have risen below inflation in every area of Scotland except Forth Valley, Fife, Greater Glasgow and the Lothians.

That said, there are issues with the PRS. The quality of homes and management are inconsistent, rents are unaffordable for many, and regardless of whether the rent has been increased for an individual tenant, the fear that it could go up or that the landlord could decide to sell at any time is enough to fuel anxiety. In some cases, tenants are so afraid to cause a fuss that they will put up with poor conditions and disrepair to avoid drawing the landlord’s attention. This is not a healthy dynamic.

But, if we’re improving the PRS, we need to stop demonising landlords and focus on practical solutions.

The findings of the second wave of a multi-year research project, Rent Better, have just been published. The project has involved in-depth surveys and interviews with landlords, letting agents and tenants understand the impact of changes that have already been introduced in the PRS in Scotland.

While PRS data isn’t perfect, the research shows that the sector is shrinking. Landlord registration suggests a reduction of about 8,000 properties in the last two years, and around half of the landlords who participated in the research said they planned to leave the sector in the next two to five years. Landlords leaving the market isn’t necessarily problematic – depending on who buys the homes.

The research suggests that landlords are generally not selling homes with sitting tenants, and they’re not selling to other landlords. This could be creating opportunities for first-time buyers, or it could mean that we are losing much needed residential homes to the holiday market or second home buyers. This can reduce choice in areas where supply is pressured, push up rents, or force people to move elsewhere. Lack of choice is already a severe issue for low-income households, larger families, people with disabilities who have specific requirements, and people living in rural areas.

One solution could be for social landlords to buy the homes to increase their housing stock. The case for more ‘strategic acquisition’ is set out in the Scottish Government’s rented sector strategy consultation. Still, it would need to be backed by a plan of action and the resources to buy the homes and implement any necessary improvements. And the costs could be significant – especially if some landlords are selling up to avoid costly repairs or new requirements for minimum energy efficiency, simply shifting the problem of poor property conditions. 

To create a better PRS, landlords and tenants need support to understand legislation, rights, and obligations. CIH Scotland has suggested developing a Private Rented Charter, similar to the Scottish Social Housing Charter.  A new charter would set out the standards tenants should expect and clear routes to redress if something goes wrong.

But the real key to achieving lasting change in the PRS will be well-resourced enforcement. Additional regulations will likely force some compliant landlords to leave the market if the costs are too high. Without effective enforcement, landlords who are already avoiding existing regulations will be driven further underground, exacerbating poor practices and poor conditions for the tenants who can’t afford to be too picky.

Written by Ashley Campbell

Ashley is the policy and practice manager at CIH Scotland.