Little evidence of landlords leaving the private rented sector due to regulation, Govt housing official tells Resi 360 audience

In the first of a series of stories to come from this year’s Resi360 residential property conference, The Green Landlady reports on revelations made in the opening keynote.?

On the train home from Resi360 last night, my mind wandered back to the opening comments of Emma Fraser, Director for Housing Markets and Strategy at the Department for Levelling Up, Housing and Communities.

“There’s very little evidence of landlords leaving the sector because of regulation,” she told the audience at Royal Lancaster London. “The level of private sector stock, as a whole, has remained pretty much static across the last few years.”

It was a bold stance, given that it sits in contrast with NRLA research published last month that found just five percent of landlords in England and Wales picked up the keys to a new property in Q2 2023, while 12 percent handed them to a new owner.?

Understandably, BBC Home Editor Mark Easton, this year’s Resi360 moderator, sought clarification in the post-keynote Q&A, asking what was to blame for the market exodus if not incoming and potentially “burdensome” regulation. Fraser didn’t have an answer, instead shifting the focus onto the underlying need for this regulation. There is a shift going on in the private rented sector, she said, and the need to provide “decent” housing for those with less choice is paramount.?

“It’s possible we may see some smaller landlords selling up, and some larger landlords coming in and taking on those properties,” she said, “but ultimately, privatising decency for a group of people - particularly those who may have fewer choices - must be the right thing to do.”??

Housing development targets on track?

It also surprised me to hear Fraser claim the government’s development pledge of 300,000 homes by 2025 is on target, together with the creation of more affordable housing.?

“300,000 is still the target. It has not been downgraded. To hit that by 2025 at this point will be challenging, however that remains the Government's housing target. In 2021/22 local authorities delivered nearly 8,000 affordable homes; the highest number since 1992. However, we feel we can go much further.”

Of these claims, it’s fair to say that there was little confidence among audience members for the former, a sentiment echoed onstage by Easton: “well, that’s the target,” he muttered into his microphone.?

The trouble is, this lack of clarity in housing regulation isn’t only (allegedly) discouraging landlords in the PRS, it’s also discouraging the planning and development of new homes.

In July, Clive Betts, Chair of the Levelling Up, Housing and Communities (LUHC) Committee, addressed the national housing shortage in England, saying there’s evidence the Government’s latest shake-up of planning rules is “already having a damaging impact” on efforts to increase the building of new homes.

“People are facing rising housing costs. Housing affordability is a major issue. For our economy and for communities across the country, it’s crucial the Government takes urgent action to encourage the building of more homes. Without urgent action, the Government will fail to achieve its national housing target of building 300,000 net new homes per year by the mid-2020s.”

Betts went on to say that planning consultants say annual house building will go down to around 150,000 a year under the Government’s proposed policy reforms, adding that the prospect of a major hit to the building of new homes resulting from the Government’s planning rule changes “was deeply concerning, especially for people wanting to get on the housing ladder, families eager to move home, and communities crying out for affordable places to live.”

Build it and they (might not) come

Returning to Resi360, Easton pressed Fraser on the Government’s general lack of? conspicuous and transparent communication regarding housing.

“Is the reality that we need to be much more straightforward with the public, who - if the early evidence is right - just do not understand the realities of the needs and the requirements that we have to make, that we need to be honest with them?”

“The reality is that communities will not accept development that doesn’t have the infrastructure and services needed to go with it,” replied Fraser, skirting the issue somewhat. “That’s what the changes in the housing bill are fixing - gaining that community-accepted development and changing the way that the British public thinks about development.”

No mean feat, changing the mind of the British public. And far from reassuring to know that while we sit at the start line with engines revving, the bulk of the track is yet to be built and the audience in the grandstand is unclear on the rules of the race.

Be the change you want to see in the world

So far so bad. But as the session drew to a close, there was complete agreement on one point: the vehicles that will get us around this twisting, turning track will be powered by private sector pragmatism.?

“It’s clear there are significant challenges ahead, and the economic landscape we find ourselves in does not make achieving the country’s ambitions for housing easy,” Fraser told the audience.?

“It’s clear that what all of you do; the delivery of new homes and the provision of secure, decent and affordable housing for all, is absolutely critical to the future of this country, to individual wellbeing, and to prosperity.?

With all this Government deliberation yet to yield actionable information for the housing industry, the aphorism “be the change you want to see,” has never been more true.?