London property consultancy Daniel Watney LLP is calling on the Government to encourage further institutional investment as a means of improving the private rented sector, rather than relying on extra regulations for landlords and agents.
It is well documented that significantly more new build homes are needed to help solve the UK’s housing shortage, and Daniel Watney believe that new funding from institutional investment can play an important role in contributing to the rise in housing supply, as well as addressing pricing issues in the housing sector.
The comments come ahead of the Department for Communities and Local Government launching a new consultation on how to best tackle to rogue landlords and drive up standards in the private rental market.
Julian Goddard, head of residential at Daniel Watney, said, “As the consultation paper itself acknowledges, rogue landlords are very much the minority, with the overwhelming majority of tenants satisfied with the accommodation and service they receive from their landlord.
“The best way to improve the private rental market is not to burden landlords with excessive regulation, as the proposed immigration checks will do, and to encourage further institutional investment, which will allow for more purpose-built rental accommodation to be built, boosting supply and helping stabilise rents.”
Meanwhile, a new report suggests that rent controls are not necessarily the best way to make it more affordable for young people to secure accommodation.
A report by the pollster Survation earlier this year suggested that there was overwhelming political support in the UK for the introduction of legal rent controls on privately rented housing. This may partly explain why Labour’s Ed Miliband tried to reach out to ‘Generation Rent’ with promises of three-year tenancies and protected rents in the run-up to the last General Election. But this is not necessarily the best way forward, according to The International Union of Property Owners (UIPI).
The UIPI, made up of over 30 private housing and property bodies from across Europe, have come together to find solutions on how to improve market conditions for younger people seeking housing.
While accepting that there are major obstacles for young people accessing housing, the UIPI, at its Annual Congress, said that rent controls are not necessarily the best way to help people secure their own home.
“Young generations’ access to the housing market is a major issue of the running decade and it needs to be tackled. UIPI has a clear role to play in this debate and we have to promote solutions that stimulate the inclusion of young Europeans in the European housing market,” said UIPI president Stratos Paradias.
Faced with higher unemployment and low incomes, he pointed out that the new generation are struggling due to the financial crisis which is making it difficult for them to access home ownership market through mortgage loans despite current low interest rates.
He added, “Low incomes, tightened lending and demand pressure on rental housing is a combination that generates political demands for stricter rent regulation, rent control or further investment in public housing and/or housing allowances. Rather than imposing rent control and high taxation, we believe that we have to correct the damages of the crisis in a way that does not endanger financial as well as macroeconomic stability.”