The Review marks an important watershed and a move away from myth-driven policy decisions towards evidence-based recommendations which acknowledge the important contribution small landlords make to the housing mix. It is a strategic assessment that does away with the claim there is some kind of crisis in buy-to-let or the wider PRS.
Key points:
The Review makes clear its doubts about build-to-let: “Much of this debate reflects the attempt to construe residential letting as commercial letting, when in reality the two sectors are very different.”
Furthermore, the Review recognises that “smaller landlordism does not necessarily mean financial instability.” There is also acknowledgement that many “cottage industry” landlords are lowly geared and have unmortgaged properties thus providing tenants with a high level of security.
The Review has identified that focused and targeted policies are needed to root out rogue landlords who do nothing but discredit good, smaller landlords. The Review highlights the critical role local authorities can play, with their existing and powerful tools, to manage the sector at a local level. This requires a level of prioritisation for councils.
A recognition that tenancies fail for specific reasons: rent arrears, anti-social behaviour etc. Policy must focus on the reasons why tenancies fail, not on manipulating the tenancy framework itself. The Review proposes an end to the assumption that PRS tenancies always end against the wishes of the tenant.
However, the Review’s proposals on “light-touch licensing” will need further examination. Much further work is now needed to determine how a model could work and there is unlikely to be a quick-fix solution. The NLA would wish to be at the centre of ongoing discussions.
David Salusbury, Chairman, NLA, said: “The Rugg Review offers Government a number of policy options based upon sound and independent evidence. The rhetoric has gone and myths have been dispelled.
“It demonstrates and encourages a commitment to “grow the business of letting” for smaller landlords but also encourages larger-scale investment, where appropriate. This means tax incentives to encourage investment in quality housing across the board.
“The Review is clear about the positive elements within the PRS and also where the sector faces challenges in raising standards and the wider social contributions landlords could make, especially in “equalising the rental choice.”
“Appropriate, focused and effective regulation of the sector is vital and supported by the NLA as a means of raising standards, improving the management of properties and cracking down on ‘rogue operators’. The Review’s recommendations about licensing will need careful consideration but the NLA has a major role to play in the development of PRS policy and we look forward, in the coming weeks and months, to ensuring that landlords up and down the country are represented as the decisions which affect them are made.”
