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Disparity Between Rental Surveys Deemed Unacceptable

February 25, 2013 | Professionals  

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Following an investigation into the disparity between the various rent indices, the Residential Landlords Association has called on the Government and the industry to get to grips with the facts by establishing a common survey, putting an end to the confusion that invariably results from a multitude of surveys that do not agree with one another.

This follows the report in Residential Property Investor (official publication of the RLA) that showed that different rent indices put the average UK rent in the private sector anywhere between £682 a month (Belvoir) and £1,974 (ARLA). LSL Property Services quoted average rents in London at just over £1,100, while ARLA claims the figure is £4,100.

But according to the Government’s official data from the Valuation Office Agency, average rents across England in the 12 months to September was £705, an increase of 1.3% on the previous 12 months.

The investigation found that seven of the rental indices in the UK are put together by letting agents with a self-interest in exaggerating rental income as a way of enticing landlords to use them. The RLA has therefore called for the establishment of a single, clear rent level survey. In doing so, all sides can make future decisions affecting the sector from the same, credible source.

Alan Ward, Chair of the RLA, said, “When making policy it is vital that ministers have clear and authoritative data from which to make their decisions.

“As there is a great deal of media and political attention focussed on the private rented sector given its increasing size and concern over the impact of major reforms to housing benefits, it is worrying that ministers are making decisions based on unreliable and often widely different data.

“In the interests of good policy and to ensure public confidence in data on private rents, there needs to be one rental level index in which all parties can have complete confidence and which no longer gets driven by the commercial interests of lettings agents.”

Furthermore, the official statistics blow a hole in the hype, showing that private rents nationally are actually growing below inflation, and at a lesser rate than social rents. The Valuation Office Agency data is based on half a million measurements, and is the largest of its kind to examine rents nationally. They say that rents have grown 2.8% nationally in the last year, lower than the rate of inflation as measured by the Retail Price Index, but comparable with the Consumer Price Index. Rents in the social housing sector are allowed to grow by RPI plus 0.5% per annum.

This data is part of the Communities and Local Government Committee inquiry into the private rented sector, which met on February 4th. As part of the evidence given at the inquiry, the British Property Federation said that the VOA figures show that there is no need for rent controls, which they believe would harm investment in the private rented sector at a time when more homes are needed.

Although, the BPF did say that the introduction of licensing for letting agents and a better system of landlord registration than seen in Scotland could help curb bad practice in the sector.

Ian Fletcher, director of policy at BPF, said, “Debate on the private rented sector is too often dominated by case study, narrow evidence and prejudice, rather than the full picture, and there is real danger that on the back of that we get poor policy-making.

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“Policies that hurt investment in the private rented sector will not help people needing a home and just exacerbate the nation’s housing crisis. We hope the select committee will remember that rents reflect local housing markets and come out strongly in rejecting rent controls.


“The official statistics show that there is no scandal on rents in England.”

Regarding regulation, he said, “We strongly support efforts to tackle bad practice in our sector, and continue to support many of the recommendations made in the last major review (Rugg Review) of the sector, including its suggested approach to regulating the sector through registration.

“There is probably more legislation on housing on the statute book than any other topic, but it is typically badly promoted and enforced because it is under-resourced.

“The taxpayer spends less than 3p per annum informing households of their rights and responsibilities in the private rented sector – but has spent more than £4 per household informing them about the TV digital switchover. That sadly says something about the nation’s priorities.

“There has been a national register of landlords and agents in Scotland for some time, and compliance with it is poor, with the worst landlords continuing to be let off scot-free. We remain very willing to work with any party seeking to tackle bad practice, but only on suggestions that will be properly promoted and effectively enforced.”

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