Private Rented Sector Homes Drastically Improved
The quality of Private Rented Sector Homes has drastically improved in the past decade according to a survey by a specialist buy to let lender.
InterBay Commercial says the proportion of homes in the private rental sector in England deemed non-decent by the Office for National Statistics has fallen for 10 consecutive years, decreasing to 24.5 per cent in 2018 – the latest data available – from 44 per cent in 2008.
This is in spite of the rental sector growing by 45 per cent over the period, adding 1.5m homes.
As a result, the latest English Housing Survey shows that the vast majority (84 per cent) of private renters were satisfied with their current accommodation.
InterBay claims that landlords’ commitment to refurbishing to improve properties has been a key factor in this improvement.
The lender’s survey of more than 700 property investors shows that 70 per cent of landlords who recently undertook a refurbishment did so to improve the property, be it its presentation or the quality of the accommodation for tenants.
Meanwhile, 45 per cent of landlords cited increasing a property’s capital or yield as their reasons to refurbish.
InterBay’s analysis shows that landlords typically spend £12,000 per refurbishment while typical spending on what it calls ‘heavy refurbishment’ was as much as £40,000.
As well as ensuring a property is in a good enough condition to rent, refurbishment typically bolsters a rental property’s value and income potential: 74 per cent of those who undertook a refurbishment said it enhanced the property’s value, and 82 per cent saw monthly rents rise.
Even after accounting for those who did not see the value of their property rise, the typical refurbishment added £13,000 to a house’s value.
Darrell Walker, InterBay’s head of sales, says: “It may be an easy target for political point-scoring, but the private rented sector has been a success story since the financial crisis, catering for a growing proportion of the population that either cannot or chooses not to purchase a home. As the [sector] has grown, it has also professionalised. As it has done so, the standard of private rented sector homes for tenants has improved drastically too.
“Nonetheless, continued investment in the sector is not a foregone conclusion, and it must be supported rather than undermined. Landlords have been buffeted by the headwinds of policy change since 2015, and costs have risen for investors. Should this rate of change continue, it will weigh on landlords’ decisions to spend more on their portfolios, and risks undermining a decade of progress.“