While improving standards is crucial, policymakers must also consider the supply side. A second paper explores this by examining why people become, and stop being, private landlords.
This paper ties in with the previous paper as it helps explain why housing standards are lower in the private rented sector than they are in social housing. It is written by Andrew Watson of the University of Glasgow and was brought to our attention by the UK Collaborative Centre for Housing Evidence.
Entry, Exposure and Exit: The private rented sector landlord conveyor uses the concept of a stylised industrial process, and explores how landlords move into, through and out of the PRS over time. It highlights that landlord participation is often more dynamic and responsive to changing conditions than policy debates suggest.
The article illustrates how landlords’ entries and exits are rarely driven by a single factor. Instead, they tend to reflect an accumulation of signals, pressures, experiences and changing expectations across the investment life cycle.
“Housing systems tend to respond to incentives, uncertainty, risk and human behaviour in unintended and unexpected ways”
The conveyor concept also highlights a broader issue within housing policy. Policymakers helped create an environment that encouraged small-scale PRS investment over several decades, but many of the signals that once supported participation have weakened considerably.
Housing systems tend to respond to incentives, uncertainty, risk and human behaviour in unintended and unexpected ways. Yet these behavioural dimensions often remain overlooked within policy and public debate, potentially contributing to some of the outcomes now emerging across the sector.
These two papers help inform each other and a wider debate about how to improve PRS standards. While the first paper clearly sets out how to successfully implement the government policy of improving PRS standards, the second reminds readers that such a change is likely to have an impact on the supply of privately rented properties. Together, they illustrate the balancing act facing policymakers.
Improving standards in the PRS is essential, but reforms may also influence landlord behaviour. The challenge is to raise quality without worsening affordability.
Richard Hyde, chair, Thinkhouse Editorial Panel
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