In 2008, 44 per cent of homes in the sector were defined as non-decent, while today that figure stands at 23 per cent.
This is a significant reduction and demonstrates the positive impact that landlords have had on the sector.
The number of properties classed as non-decent has fallen from 1.4m to 990,000 over that period, a 29 per cent reduction.
At the same time, the number of privately rented homes classed as decent has risen from 1.8m in 2008 to 3.3m in 2021 – an 83% per cent increase. This is a clear indication that the standard of homes in the sector has improved.
Our recent survey of over 500 landlords has highlighted how they have helped drive this improvement by upgrading the property they purchase.
The results from our survey found that 81 per cent of landlords make improvements on every property they add to their portfolio.
This demonstrates that landlords take pride in their properties and are committed to providing good quality homes to their tenants. In fact, 83 per cent of landlords said they make improvements to ensure they are providing a good quality home to tenants.
The research also found that 22 per cent of landlords spend over £25,000 on upgrading a new portfolio property, with 18 per cent spending between £10,000 and £20,000.
On average, landlords expect to see a 19.8 per cent increase in the property’s value after completing upgrade work, with a 16.5 per cent increase in expected rental income.
It's also interesting to note that 40 per cent of landlords prefer to purchase property in need of refurbishment, with 21 per cent opting for properties that are ready for tenants to move into.
The most common improvements that landlords make include painting and decorating, installation of a new bathroom or kitchen, and a new boiler.
These improvements not only make the property more attractive to tenants but also improve its energy efficiency, with 47 per cent of landlords upgrading their property for this reason.
Overall, landlords have played a vital role in raising the standards of privately rented property. They have not only improved the quality of homes available to tenants but also contributed to the reduction of non-decent homes in the sector.
More clearly needs to be done and the Government is currently consulting on introducing a Decent Homes Standard for the PRS. At Paragon, we would certainly like to see Local Authorities use the powers already available to them to challenge the rogue elements that bring the name of the sector down.
Buy-to-let lenders also contribute to this improvement by acting as a natural barrier to poor quality property entering the sector. We employ our own team of surveyors and they ensure we lend on homes that pass a decent standard level.
We are committed to supporting landlords in providing good quality homes to their tenants, and our full report, Raising the standards of privately rented property, provides further insights into this topic.
* Richard Rowntree is Managing Director of Mortgages at Paragon Bank *
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Funny how Govt harbour that malicious myth, when their own EHS publish 83% of tenants are satisfied. !
Over the years I've had tenants live in my ''non decent homes'', not of my doing though, at the start of the tenancy they have been nice clean homes, if they weren't why would the tenant have taken them, but they have certainly been ''non decent'' by the time the tenant moves out , there will always be those out there that chose to live like animals , and we seem to be getting more and more '' animals '' in this country, not just immigrants but white British as well
It always gives me a sense of satisfaction when parents delivering new student tenants say how much nicer the kitchen is than the one they have at home. Many years experience has taught me a decent mid range kitchen with good quality worktops will last much longer than a cheap flat pack one. As I have no intention of selling most of my houses (due to eyewatering CGT) it makes sense to install stuff that will last and look good long term.
High quality GRP shower pods are another favourite. Similar overall installation cost to a cheap shower tray and tiles but minimal ongoing issues. No grout or silicone to go mouldy.
One problem we encounter is the demarcation between tax deductible replacement, improvement or non tax deductible upgrade. It's a very grey area.
The timing of improvements can play a big part. If we do the work immediately after purchasing the property it's pretty much a non deductible (until we sell, if we sell) capital expense. If we do it after renting it out for a period of time a lot of it will be classed as a tax deductible replacement.
Double glazing as a replacement for single glazing is classed as a tax deductible replacement (as it's the modern product) even though it's clearly an upgrade.
Other things are arguable. A shower pod costs the same as a conventional enclosure and will cost far less to maintain, so I would guess it should be regarded as a modern replacement. (No idea if I'm correct).
A laminate kitchen worktop replaced with another laminate worktop is clearly a replacement whereas granite may be treated as an upgrade (capital improvement). Where does that leave all the worktop types that fall between the two?
Additional insulation on top of existing insulation is an upgrade whereas if you take out the old insulation (would anyone ever do that?) and replace it with the modern standard it's a replacement.
Jo
As I have said before, self assessment is exactly that. You make your own assessment of whether your expenses qualify, claim the appropriate tax relief and put information in the notes so that HMRC can assess whether to agree or challenge your assessment.
If there was a floor, door, wall, worktop etc. there before and you replace it another form of flooring etc. then I assess that as repairs and maintenance. Replacing a worn out boiler or old failing windows or insulation with new higher performing versions are repairs and maintenance.
I would even claim these if preparing a property for first time rental as these are not brand new additions, like solar panels or an extension would be.
As I have said before, I claim everything I feel is sensible and justifiable, document my thinking in the notes, and have never had anything queried since I started doing self assessment returns when they were first issued. My manual paper based returns, submitted to the local Tax Office, before self assessment, were also never queried or challenged.
I agree Robert, only mine goes to my accountant to check, a good chap who is a partner in a well respected firm of accountants, if he were concerned about anything I was claiming for he would very quickly say so
Andrew
I used a good accountant when I was running my business. At our regular meetings before submitting the accounts, if he didn't sigh and raise his eyebrows at my ideas to maximise my tax deductions then I felt I hadn't been creative enough!
I now do it myself as I am reasonably sure I am not missing out on any unknown tax reduction opportunities and it doesn't take long if everything is recorded on a spreadsheet as it happens.
Robert I'm sure I could also do it all myself, the accountants I use I've used since 1977, although not the same guy now, it costs me £600 a yr inc vat and is tax deductible, they file our tax returns to HMRC on our behalf which I think is useful coming direct from a well respected firm of accountants
I use Taxcalc for my self assessment. The software asks simple questions, only deals with the parts of the forms that are relevant to you, picks up on any obvious mistakes or omissions. It is then filed online through the software. Costs about £35 per year (for up to 5 people). I have been using it for the last 20 or so years. It's really easy to use.
The government peddle what they think wins them vote’s, there are more tenants than landlords…. And therein lies the problem 👎🏻
That's not a problem for me, it means I have a greater choice of tenants to rent to and a better chance of getting a good tenant over a rogue tenant
Some excellent and interesting research from Paragon Bank. One of my business partners has a loan facility with Paragon and has found them to be very good. Good to see those numbers improving but concerning that almost 1 in 4 PRS houses/flats (or 1 million units) are still at a 'non-decent' standard and not fit-for-purpose. Consumers certainly wouldn't tolerate it if 1 in 4 cars sold or 1 in 4 mobile phones sold, or 1 in 4 restaurant meals sold were sub-standard and not fit-for-purpose. I'm aware that there are still a few residential landlords who continue to have energy wasteful house/flats in their portfolios with an EPC of Grade D or worse. Their tenants are almost certainly in fuel poverty and will not be able to afford any inflationary rent increases. Bad business for those landlords. EPCs have been around for 15 years and the MEES Regs for 8 years but some landlords fail to invest in their assets to insulate the walls and roof of their units and install a modern, efficient heating system. No business has ever succeeded without reinvestment in staff training, marketing, R&D etc. Its peculiar that some landlords run their businesses without any reinvestment whatsoever and then blame the Government when they are forced to. These landlords need to take some personal responsibility and sort out how they run their business.
The journalists from the gibbons group do make some good points and I think we can usefully expand on that ,it is an outrage the so much council housing is of such poor quality that the regulations are rigged so that councils do not have to meet any energy standards it is unacceptable that millions of Council tenants live in the worst fuel poverty, some social housing is also of such terrible quality that children die in it as has recently occurred ,then there is the appalling standard of some ministry of defence housing that service personnel have to eke out an existence in
EPC standards have to be the same for all housing that is only FAIR (for members of shelter ,acorn ,generation rent you can find the meaning of this word in a book called a dictionary)
So how do we fund such a massive expenditure councils clearly do not have the funds that is why they have to extort so much from private landlords with their various money making schemes of course if they were not constantly on the take from private landlords they could make their houses even better for tenants ,of course I suppose the councils could reduce the eye watering salaries of their executives
However an idea occurs to me organisations such as shelter have vast sums in their accounts think I heard forty two million pounds or is that one hundred and forty two million pounds anyway the figures are OBSCENE it should be compulsory that some of that fabulous wealth should be used to fund tenants in fuel poverty after all isn't helping tenant supposed to be part of their job description
Then there is subject of the mind blowing salaries of bosses of these supposed tenant organisations While we are on that subject £280,000 a year for a councils housing chief plus expenses a third of a million pound salary for WHAT !! .
The average private landlord would be over the moon to be left with a tenth of that after taxes licensing fees etc
While we are on that subject £280,000 a year
Good article, but would have been a lot better with comparative figures for Housing Association and Council housing properties.
And owner occupied housing as a comparator/yardstick. All should be available from the English Housing Condition Survey, though TBH I haven't checked it.
We all know the real rogue landlords here are the social housing landlords, however in their defence a lot to do with their '' non decent'' properties are the kind of people they rent to
On a lighter note a big Congratulations to Scotland on winning The Grand National the greatest horse race in the World.
The Scottish economy and feel good factor will be improving immediately.
Take no notice of protesters there will always be those protesting about what they know nothing about.
I just wonder how many of them ever handled a horse a kin to those protectors about landlords.
What a beautiful horse they are so well looked after even better than a human, can you imagine without racing any of them would not exist
A friend of mine, sadly no longer with us, had a half share in a horse, he had an XJ which he had owned from new, but when he went horse racing he always had someone else drive , he and his wife would sit in the back, full morning suit and hat, the works, they had a few wins, he and his wife had a lot of enjoyment from that, week days he would be down his coal yard filling bags with coal, happy days
Businesses needs a lift and not pour cold water on everything.
A great number of people had a great day out and millions more enjoyed the commentary on TV.
I am not a spoil sport or a gambler but have a small bet for the sake interest, good luck if you picked the winner out of that lot.
A former commercial tenant of mine, once again no longer with us, would have a bet on the horses, i would go to collect the rent and he would be on the phone to the bookie, 50p on this and 50p on that, any wins he had were just a few quid, and any loses were the same, just a bit of fun.
Whenever I read a newspaper story with images of truly disgusting mouldy accommodation it is Housing Association stock not private rentals. It always amazes me when accomodation is not kept well repaired and maintained because the work is tax deductible.
But also isn't it a lot to do with the lazy people who live in social housing ?
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