The Death of the PRS: Why Rumours of its Passing are Greatly Exaggerated

To quote Mark Twain: “Reports of my death have been greatly exaggerated.” 

Although Twain was responding to a query regarding his own health, the quote could apply perfectly to the wellbeing of the private rented sector (PRS).

For some considerable time, proclaiming or predicting the death of the PRS has become something of a media trope and click bait standard. Why this should be the case is something of a mystery.

The unfairly skewed view of the PRS taken by some may in part account for it, but whatever the reasons, the death of the private landlord must be one of the most protracted in history.

Or would be, were it true.

As a property professional, I have spent years working in an industry which has been dying on its feet (apparently) and yet I’m as busy as I ever was. So, what’s going on here? Let’s find out.

Can the PRS actually die?

That’s a good question and one which isn’t asked very often. Government could legislate against private landlords (recent announcements make some feel that they already have). That would trigger the death of the PRS for sure.

Every last private landlord could sell their properties and decide to go and live the quiet life. Unlikely.

Local authorities could build hundreds of thousands of new homes for social rent and all current private renters could up sticks and move into them. Nice for some tenants, but simply not going to happen.

Similarly the assertion that landlords are quitting the sector in their droves is not founded in any reality, something we addressed in ‘What Should You Know When Deciding to Exit the Property Market?‘.

The provision of privately owned, rental properties contributes a substantial number of homes throughout Scotland and its sudden disappearance would make the current housing crisis infinitely worse.

The Scottish Government estimates that there are around 340,000 privately rented households in Scotland, a substantial number given the total of 2.53 million households.

Why do people insist on forecasting the death of the PRS?

This is an interesting question and I doubt there is a simple answer. It happens so regularly that it may have become something of a trope, a cheap filler on a quiet news day.

The bias in certain areas of the media doesn’t help. Why landlords as a group have become objects of vilification is not immediately apparent. No doubt there are a minority of tenants who have had very poor experiences of private lets.

However, that’s also true of garages, hotels, restaurants and DIY stores.

You won’t see many media pieces predicting the death of the car repair sector, or the imminent collapse of home improvement suppliers, so it’s more than that. What is it about landlords that makes the alleged death of the PRS fair game?

It sometimes feels as if there is a certain glee attached to some of these stories, as if private landlords deserve any woe coming their way. This is especially true on social media, but there is an element of it in the press as well.

The myth of the landlord monopoly

Part of the reason may be a widely held but inaccurate view of the private rented sector and of landlords in particular.

The private rented sector is often treated as if it was a corporate entity, composed of a few wealthy landlords who own and let out the vast majority of rental properties in the country.

The reality is of course that very few landlords own more than one property, so this angst is directed towards a very diverse and amorphous group of people.

According to the Scottish Government, there are:

• 228,212 registered landlords with 1 Property (94% of all registrations)
• 12,317 registered landlords with 2 Properties (5 % of all registrations)
• 1,757 registered landlords with 3 or more Properties (1% of all registrations)

So, while it is true that there are some less than perfect landlords, tenants are predominantly dealing with people who actually own their rental property rather than a faceless company. 

Advice from the property pros

As a property professional who has worked within the sector for many years now, I can honestly say that I haven’t yet seen signs of its imminent demise.

Yes, the sector has faced its fair share of challenges; rising interest rates, government intervention and financial uncertainty, but I am as busy today as I ever was. So something is out of step.

Perhaps landlords are seen as an easy target, perhaps journalists are too busy to give sufficient attention to the facts behind the stories they write or maybe politicians think penalising landlords is a vote winner.

Regardless of the reasons, the PRS continues to thrive and provide many much needed homes.

For investors, the long-term outlook is still positive. I would strongly advise making sure you understand the market before deciding to invest, but it’s a large and diverse place and you’ll find something to suit you and your needs.

Portolio recently carried out a poll on social media which asked, “Do you think buying property is a good long-term investment”. Of those who replied only 3% said ‘no’. It follows that 97% see property as a good investment.

So, while predictions are always risky, I’ll go out on a limb and suggest that there will be more obstacles put in the way of buy-to-let investors, and that despite this, the market will remain viable and profitable.

In summary…

Thank you for reading this far. As for the death of the PRS, you should understand by now that the private rented sector is very far from dead, despite all those who seem to think it is!

As a company, we specialise in buying and selling tenanted properties, but we pride ourselves on our willingness to offer advice and guidance to prospective investors who are thinking of entering the property market.

If you are considering getting involved in the private rented sector in 2023, please give us a call and make an appointment to discuss your goals; we in turn can show you the best way to achieve these.

The private rented sector is dead! Long live the private rented sector!

Written by Ross MacDonald, Director of Sales & Cofounder of Portolio

Get in touch on 07388 361 564 or email to [email protected]