On-going media coverage of soaring house prices and high rental yields has seen private landlords get the rough end of the stick in recent weeks. So I was not surprised to see from a recent Guardianarticle that many landlords are supposedly cashing in on renting multiple ‘rabbit hutch’ rooms in one property to maximise rental income.
I should probably say at this point that PPP was featured in this piece. Disappointingly, we were incorrectly referred to as lender and our quote (that landlords could treble their returns by splitting single properties into several dwellings) was taken out of context.
This did however spur me to write this blog and ask you whether such properties are in fact meeting a demand?
The Guardian article features several examples of ‘mini-studios’ in and around the London area which you’d be hard pressed to swing a cat in. However, some had managed to squeeze cooking and washing facilities into the minute spaces, while others only had room for a fridge and sink – what happened to the bathrooms is anyone’s guess.
But with the average monthly price of such ‘mini-studios’ being much less than the equivalent rent in the area for a one-bedroom flat, is it the case that these properties are actually meeting the affordability and convenience needs of some tenants?
The fact that most of these properties were snapped up within hours of the agents advertising them would suggest that they are. Even with most of the examples featured being of very low standards, tenants clearly see value for money in the location rather than the size or state of the accommodation.
The flip side of the coin is that landlords are being seen as the monsters who exploit this need and make up to three times as much rental income as they would renting out the property as a single unit.
In a recent discussion I started on a landlord forum about this issue, some other interesting cases were made. One post rightly pointed out that tenants will make sacrifices to live in an area that is close to work and another stated that nobody is forcing these tenants to rent ‘rabbit hutches.’
But that is in the bubble that is London.
As a private sector landlord myself who has built a business that helps other landlords to build, market and maintain portfolios of high standard shared accommodation, I’d be disappointed to see such low standards of accommodation commonplace throughout the country.
The fact is that landlords are not running social enterprises or charities – it is a business, or at the very least a form of investment for the future. So our properties should be profitable. But this should not be at the expense of pushing rents through the roof for sub-standard accommodation.
At PPP, we make sure we give back and we have a clear vision that will benefit all key stakeholders. By 2025 we aim to:
- Help 500 Partners become financially secure
- Purchase £1 billion of property in the UK across the network
- Provide high quality, low cost accommodation to 22,000 tenants
- Create 2,000 new jobs through the management and contractual services required by our Partners
- Have paid £150 million in tax
- Donate a substantial amount to charity
The concept of shared housing benefits both landlords and tenants. While landlords can maximise the income of a single property, tenants can save a huge amount of money by renting rooms in shared accommodation – this in turn gives them the opportunity to save towards a deposit if they wish to buy, not be tied down to maintaining an entire rented property and in some cases, have one outgoing cost for accommodation that includes bills. And these are only some of the positives of living in multiple occupancy homes so our tenants tell us, but more on that in a later blog.
However, landlords should not be blinkered by making three times as much income and ensure that some of that profit is being reinvested in making their properties high standard, comfortable places to live. After all, tenant loyalty will not be gained by ignoring broken boilers, damp and pest infestation.
On the other hand, this is the exact reason why more landlords should be looking to shared accommodation as an investment option. With a minority of rogue landlords still in operation (read our recent blog on rogue HMO landlords), tenants need more choice.
Here’s a few of the rooms you can find in a PPP property. Why not share your pictures with us?
