As interest rates make the mortgage market more challenging, and compliance requirements get stricter, many landlords are selling their properties. Private landlords, however, play a crucial role in society and the UK economy. The private rented sector (PRS) is a vital part of the UK housing market, providing homes for millions of people. In 2021, there were an estimated 4.4 million households in the PRS in England, accounting for 19% of all households (read the full English Housing Survey here). Here, we look at the benefits private landlords bring to the UK, its residents, and its housing market.
Private landlords and tenants
Private landlords provide an invaluable service, i.e. they provide a home, for people in a wide variety of situations. Sure, becoming a homeowner is the ambition of many, but that doesn’t mean buying a house is the best choice for all people at all times. Even if you have the means to. That’s where private landlords come in.
Let’s take a closer look:
Having the ability to rent property provides crucial flexibility across a range of scenarios. Say, someone is chasing their dream career – a process that may involve moving from city to city depending on where the best opportunities come up. Considering the costs and timescales involved with buying and selling property, home ownership could be quite prohibitive here. To put things in perspective – a recent report showed that the average cost of moving home (so, selling up and buying a new property) has risen by 21% in the past year, from £11,777 to £14,207.
Renting, on the other hand, provides game-changing flexibility that allows anyone to up sticks and move as and when they need to, without paying huge sums of money.
With all this considered, private renting helps certain individuals to fulfill their career potential, which can only have a positive impact on the economy. The same goes for those who don’t want to commit to homeownership for a number of other reasons – say, those who are in a new relationship, and want to live together for a while before investing together.
Saving for a deposit
The ability to rent privately affords many the time they need to save up for a deposit to eventually buy a home. Without this stepping stone between the family home and home ownership, we’d be looking at a pretty different society, without a doubt.
There are tons of factors that can lead an individual or family to need to rent in-between home ownership or other life events. Divorce, moving cities or countries, travelling for work; the fact is, many people may, at some point in their lives, find themselves in need of temporary accommodation. The private rental sector fulfils this need by providing properties on a short-term, mid-term and long-term let basis – catering to people in all sorts of different life scenarios.
Housing for those in need
Private landlords provide a very large percentage of social housing in the UK (60%, according to the 2020 data from RSH, the Regulator of Social Housing). They can also provide options for those who cannot access social support, or who are living through a phase of transition.
House shares & roommates
Renting out a property with friends or roommates has lots of benefits – from providing company to being able to split the cost of rent and bills. These perks are especially beneficial for students and young professionals who’ve yet to start a family. While buying a property with the view to renting out rooms within it is one option, this is a much more expensive, much less flexible endeavour than going down the rental route.
Private landlords and the housing market
Most private landlords are highly active in seeking out investment opportunities in areas where more housing stock is needed. Through their strategic planning and business investments, they help to keep housing stock replenished across the country. For example, private landlords often plug the gap in student towns and cities, as well as cities where property prices are too high for professionals to buy.
The sheer number of private rental properties on the market means that rental rates must stay competitive, too – another benefit of a thriving rental market.
Private landlords and the quality of housing
The vast majority of private landlords want to look after their own investments, which means keeping their properties well maintained and often decorated and equipped to a high standard. Doing so not only helps protect their properties from wear and tear, but helps them attract tenants in a competitive market space.
All this adds up to a housing stock that’s well looked after – meaning there are plenty of comfortable, safe properties available for those who rent.
Why private landlords are important – closing thoughts
The reputation of landlords in the UK is mixed. In the grand scheme of things, though, private landlords deliver a valuable service for millions of tenants across the UK, and contribute to a healthier society and economy. Not only do they provide housing for people in a vast range of different scenarios, they also keep the UK’s housing stock replenished and maintained to a high standard.
Without private rentals, those looking for flexibility to pursue more lucrative, fulfilling careers would be stumped – as would those in need of temporary accommodation for a variety of life circumstances. All in all, it’s important to recognise the value the private rental sector brings to the UK – we’d be looking at a pretty different picture without it.
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