July 9, 2014
Businesses operating in the Private Rented Sector (PRS) can increase profitability through Process Improvements.
Let’s begin by understanding the state of the UK PRS in early 2014, using the limited, and sometimes conflicting, datasets available. The UK PRS demonstrates all the characteristics of an immature market in that:
- 89% of landlords are private individuals and are responsible for 71% of all dwellings in the PRS (DCLG Private Landlord Survey 2010)
- 78% of all landlords only own a single dwelling for rent (DCLG Private Landlords Survey 2010)
- Only 8% of landlords stated they were full time landlords (DCLG Private Landlords Survey 2010)
- There has been an increase, from 2,445,000 households in 2005 to 3,483,000 households in 2011-2012, within the PRS (DCLG Committee – First Report The Private Rented Sector).
The result? A cottage industry of individuals supplementing their income, or funding their retirement, through an investment vehicle that they manage on a part-time and ‘best efforts’ basis. This dysfunctional approach invites near daily newspaper headlines about rogue landlords, unsuitable tenants, dilapidated premises and increasingly stringent conditions on buy-to-let lending.