Lesley Roberts
Director of Consultancy Young Group
Entering the Private Rented Sector: How do we know what we don’t know? It is encouraging to hear from our distinguished contributors that there is strong positive sentiment for the Private Rented Sector (PRS), and more specifically, the desire for institutional involvement, as well as their respective motivations.
growth, and nowhere more so than in London. Dominic Curran of London Councils p.32 suggests “The PRS is likely to be the only tenure in London that ends 2013 larger than it started.”
...caution is warned to those who oversimplify the transition into new markets In this issue of PRSupdate we also hear from Housing Providers, many who are looking to capitalise on and expand their offering (generally to bolster income); from government representatives, the desire to engage the PRS to assist in relieving the housing crisis; and from developers and funders, the opportunity to invest into what is (in the UK) a relatively immature asset class, namely the long term hold, large scale PRS Build-to-Rent product. Regardless of the motivation and level of direct involvement, the point is that key players are not just talking; they are involved and desire to be a part of the PRS. It is a diverse, stimulating, challenging and rewarding sector that is on the cusp of significant change and unprecedented UK 6
By virtue of the fact that you are reading our publication and interested in how Young Group is Shaping the Private Rented Sector, you might agree. Increased demand for our specialist PRS consultancy services reflects murmurings that significant institutional investment is afoot. Clients are seeking our advice in helping to create their PRS offering, to take their vision forward and carve out their own market share by defining and developing their USPs; establishing brand and service offerings, enhancing reputation, acquiring assets, setting up or managing PRS operations, training, mapping customer service journeys, providing market research and advising on long term asset management and investment returns. Talk is translating into action.
I am an advocate of the PRS and take any opportunity to encourage involvement, especially where it will lead to a more professional industry; where best practice becomes the norm, investment returns are solid and the consumer’s experience is valued. However caution is warned to those who oversimplify the transition into new markets, and this is especially true of the PRS. Yes, the provision of rented accommodation is a basic function of residential property companies, irrespective of whether their focus is on private, social or affordable homes. The devil really is in the detail and I can’t overstate enough the subtleties and nuances that make a world of difference when moving between them. In much the same way that you wouldn’t see a dermatologist for back pain, it’s having the right specialist knowledge that creates success. All rented accommodation providers have a base skill set, but specialisation is what makes them good at what they do. I have seen many simplistic views of the operational provision of housing, sometimes from clients and sometimes
from outsiders – the ‘one size fits all’ approach for tenure, property management, marketing, lettings, operations, asset management and above all, for service. This is where it becomes most apparent that clients aren’t aware of what they don’t know and run the very real risk of benchmarking against examples that are well below industry best practice. During the build up to this Spring/Summer edition of PRSupdate in our February edition of the PRSupdate Newsletter - the former Chief Executive, of the Tenant Participation Advisory Service, Phil Morgan, rightly suggests that there is increasing fluidity between social and private providers. This raises further debate on industry best practice and regulation, again highlighting the need for specialism. The PRS, just like the social housing sector, has such disparity of service and standards that there is a danger of this being further exacerbated as operators move into the sector anew. Gavin Smart, of the Chartered Institute of Housing p.12, further