Standards of property in the private rented sector (PRS) have improved significantly over the past decade, driven by investment from landlords. Properties in the sector are larger, more energy efficient and newer than a decade ago, giving tenants wider choices and higher-quality homes.

Landlords have driven this improvement in two ways. They have added better homes to the PRS over the period, diluting the proportion of poor-quality stock. They have also invested in existing properties to drive up quality.

Our latest report, Raising the standards of privately rented property, examines some of these changes and how landlords have contributed to the improvement.

The report finds:

• The proportion of ‘non-decent’ privately rented homes has fallen from 44% in 2008 to 23% today
• There has been an 83% increase in decent homes over the same period to 3.3 million
• The number of privately rented homes with an EPC rating of between A and C has risen by 165% since 2011
• The proportion of EPC A-C homes in the PRS is now higher than owner-occupation – 44.5% compared to 42.9%
• Homes are newer - the number of homes in the PRS built after 1990 has increased 47% to one million today
• Homes are larger - the average size of a home in the PRS has increased over the past decade to 75 sqm, up from 74.1 sqm

The report, which includes a survey of over 500 landlords, found that more than eight out of 10 (81%) landlords upgrade every property they add to their portfolio. Additionally:

• Four in 10 landlords seek property that requires upgrading when expanding their portfolio, while 21% of landlords prefer homes that are ready to live in
• Nearly a quarter (22%) of landlords said they spend more than £25,000 improving a new rental property before they let it to tenants. One in 10 (11%) spend between £10,000 and £15,000, with a similar proportion spending between £5,000 and £7,500
• The most common significant improvements landlords make to a property include a new bathroom, kitchen and boiler, with damp and windows also high on the investment list. Major external upgrades included replacing external doors, replacing a roof and landscaping gardens
• Tenant appeal appears to be the key driver for improving property – 83% of landlords said they upgrade the property to ensure they are providing a good quality home to tenants, with 82% doing so to make their property more attractive to prospective tenants
• Financial incentives are also important – 66% upgrade property to increase rental income, with 57% doing so to increase the property’s capital value
• On average, landlords experienced a 19.8% increase in capital values following upgrade works, with the average rental income improving by 16.5%

Richard Rowntree, Paragon Bank Managing Director of Mortgages, says: “Too often we hear of the negative side of the PRS, and we shouldn’t shy away from that. Rogue landlords who provide a poor product drag down the name of the sector to the detriment of the wider market.

“The great work carried out by the broader population of landlords should be recognised and celebrated. There is more work to do to bring the quality of properties in the PRS up to the level of the owner-occupied and social housing sectors, but I am confident that landlords will achieve that feat with the right financial support and a regulatory and fiscal environment that fosters continued investment.”