Northern Ireland's PRS: Raising the bar through collaboration

Writing exclusively for Unlocked, CIH Northern Ireland’s Justin Cartwright explores the ways in which the Department for Communities aims to improve the private-rented sector by working with key stakeholders such as CIH. 

The private rented sector (PRS) is a cornerstone of housing in Northern Ireland. But concerns linger. Affordability is a struggle, security of tenure feels shaky for some tenants, and overall quality can be uneven. The Department for Communities (DfC) is leading the charge on reform, aiming to raise standards for all involved. 

This blog dives into DfC's key areas of focus, drawing on CIH’s own experience as a PRS stakeholder. We'll share our insights on proposed reforms, along with the latest on our ongoing research into letting agent regulation.

The pillars of a thriving PRS 

Through stakeholder consultations, the DfC has identified six crucial areas for improvement in the PRS.

1. Affordability

The rising cost of living and skyrocketing rents are squeezing tenants. DfC is exploring how to best address this challenge. We believe a multi-pronged approach is crucial. Encouraging policies that boost rental supply, like build-to-rent schemes, needs to go hand in hand with demand-side solutions like maintaining local housing allowance rates. 

Ultimately, tackling the underlying housing shortage (both social and private) is key for long-term affordability. But targeted support, offering direct financial assistance to low-income tenants facing immediate struggles, also provides relief. 

Some places have implemented rent freezes or caps. While the intent to protect tenants is clear, such measures can backfire. Strict rent controls can disincentivise landlords from entering or remaining in the market if returns are capped. 

Our research for DfC in late 2022 suggests a potential landlord exodus of 41 to 60 per cent if rent freezes or cuts were introduced. This research continues to provide valuable evidence to inform discussions on rent control in Northern Ireland.

2. Security of tenure

Creating a more attractive PRS requires a sense of security for tenants. Our view is that introducing open-ended tenancies, with well-defined eviction grounds and appropriate notice periods, would promote stability. 

While our research shows a significant portion of current evictions are for reasons that would need to be specified grounds (to satisfy legal requirements), longer tenancies with clear guidelines would give tenants more time to address potential issues and foster a sense of security.

3. Fitness standards

DfC is rightly focusing on fitness standards. We believe the current basic standards need a boost to address the most common safety issues, like a lack of proper thermal comfort measures and fall hazards. 

Upgrading these aspects directly benefits tenant health and safety, potentially reducing strain on the healthcare system. Implementing enhanced, evidence-based standards is the most effective way to achieve this.

4. Energy efficiency standards

Introducing minimum energy efficiency standards is another positive step by DfC. While we support this, we recognise the challenges. 

Maintaining decent housing standards in the PRS is hampered by cuts to private-sector grants and a lack of emergency efficiency upgrade funding. Reinstating these grants and providing funding for improvements are essential. Additionally, introducing minimum EPC ratings with a reasonable timeframe for implementation would further enhance the quality of PRS housing. 

The stark reality is that 57 per cent of private-rented homes in Northern Ireland fall below EPC Band C. A dedicated funding and policy framework for retrofitting is urgently needed. Investing in energy efficiency won't just reduce fuel poverty for tenants, it will also contribute to decarbonisation goals outlined in the Climate Change Act 2022.

5. Arbitration

An independent housing panel to resolve disputes is another area DfC is exploring. We believe knowledgeable arbitrators and adjudicators are crucial for building trust within the PRS. Properly resourcing the panel is essential for it to function effectively and deliver timely, cost-effective dispute resolution; an underfunded panel risks replicating the slow and expensive court system.

6. Letting agent regulation

Introducing a regulatory framework for letting agents, including a potential ban on letting agent fees, is on DfC's agenda. Our ongoing research is exploring good practices to ensure professionalism and consumer protection within the sector. 

We're actively seeking insights from all stakeholders, including tenants, landlords, letting agents, and other organisations. By listening to a broad range of voices, we aim to develop a balanced and informed position for DfC to consider. Stay tuned for further updates on this. 

Building a brighter future together 

DfC's focus on these key areas presents a valuable opportunity for significant improvements in Northern Ireland's PRS. By addressing affordability, security of tenure, fitness standards, energy efficiency, dispute resolution, and letting agent regulation, we can create a thriving PRS that benefits both tenants and landlords. 

Our ongoing research on letting agent regulation will contribute to this process, aiming for a more professional and consumer-centric environment. We'll continue to follow developments and share updates. 

Together, we can raise the bar for the private-rented sector in Northern Ireland.