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Driving Standards in the Private Rented Sector

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Standards in the private rented sector (PRS) have improved significantly over the past 15 years as landlords have brought new, better quality property into the sector, a report by Paragon Bank has found.

Paragon’s new report, Driving Standards in the Private Rented Sector, highlights how the portion of homes in the sector classed as ‘decent’ under Government standards has increased from 53.2% to 76.7% since 2006. Overall, 3.6 million homes are now classed as decent, compared to 1.4 million in 2006. Over that same period, 1.4 million buy-to-let mortgages for house purchase have been approved.

Conversely, the number of homes classed as non-decent in the PRS has not reduced significantly, with 1 million homes categorised as non-decent today compared to 1.21 million in 2006. This suggests that the growth in new properties coming into the PRS over that period is driving up standards for the sector overall and diluting the stubborn proportion that remains non-decent.

Paragon’s report also shows:

  • The energy performance of the sector has improved with a 272% increase in PRS homes with an energy rating of C or above since 2009 to 1.8 million
  • The proportion of PRS stock built since 1991 has grown from 14% in 2009 to 22% in 2019, with the number of homes in this category doubling over the period – 509,000 to 1 million
  • Homes are larger. Compared to 2009, there is a greater proportion of homes in the sector of at least 70m2 - 50.6% today vs 48% in 2009. In terms of absolute numbers, that equates to a 38% increase in the number of properties to 2.4 million
  • There is a greater choice of homes, with the number of semi-detached, terraced and purpose-built flats increasing
  • Over three quarters of landlords (77%) invest in upgrading newly purchased property before letting it out to a tenant, with an average spend of £8,700

Richard Rowntree, Paragon Bank Managing Director of Mortgages, said: “There is a clear correlation between buy-to-let investment and improving standards in the quality of private rental homes. Standards of property in the PRS have increased significantly over that period. Overall, homes in the sector are newer, larger, warmer and more energy efficient than they were 10 years ago and tenants have more choice.

"Since 2009, there are nearly three times the number of properties with an energy rating of C or above, a 100% increase in the number of homes built after 1990 and a substantial expansion in the types of property available to rent in the PRS.”

You can download the report here:

Driving Standards in the Private Rented Sector