Business

Why has renting become so much more popular?

Renting property is becoming more popular in Northern Ireland
Renting property is becoming more popular in Northern Ireland Renting property is becoming more popular in Northern Ireland

WE hear a lot of talk about the housing market. Generally, it relates to house building and house sales. Indeed, RICS’s own residential market survey and construction market survey provides regular insight into these areas.

The private rented sector, on the other hand, is often overlooked in public discourse. But we shouldn’t under-estimate the important role renting plays in the Northern Ireland economy and society.

The most recent Family Resources Survey for Northern Ireland, released late last year but which relates to the period 2014/15, indicates that some 20 per cent of Northern Ireland households now live in private rented accommodation. It is estimated that this is double the number of a decade earlier.

And 43 per cent of households headed by someone aged 25-34 years are now living in the privately rented sector. This has increased from 14 per cent in 2004/05 - up 29 percentage points.

Over the same period, the percentage buying with a mortgage in this category has decreased from 66 to 40 per cent, a reduction of 26 percentage points.

So, renting has clearly become more popular; driven to some extent by affordability issues relating to buying a home, but perhaps also due to people's desire to have flexibility. When you rent, it’s easier to move to another area for a change of job or a change of lifestyle.

This growth in the private rented sector in Northern Ireland puts an even bigger onus on the industry and government to ensure we have a professional and effective private rented sector.

RICS has been closely engaged with government to help achieve this aim. As housing supply continues to be an issue, the private rented sector provides a viable option to many and we would like to see this sector operate professionally for all.

Residential sector regulation is a highly-varied landscape across the UK, and in some respects, Northern Ireland is on the front foot in relation to professionalising the private rented sector. We already have a Tenancy Deposit Scheme and a Landlord Registration Scheme in operation, and are positively moving down the road of better regulation to raise standards further.

However, at present in Northern Ireland, anyone can set up a lettings agency without appropriate qualifications or industry knowledge. Considering that letting agents play such the pivotal role in the private rented sector, this is far from an ideal situation.

Although agents who sell property are subject to loose regulation, the lettings industry has been allowed to remain unregulated.

So we welcome the inclusion of letting agent regulation in the Department for Communities’ proposal paper around regulation, and the potential for provisions to raise standards in the sector.

RICS has strongly recommended to Northern Ireland’s policy makers that there should be a legal obligation for all letting agents to be a member of a recognised professional body, such as RICS or ARLA (the Association of Residential Lettings Agents).

We hope to see some significant progress on these issues in the not-too-distant future, and continue to engage with government on them. And with the number of people renting continues to rise, it won’t come a moment too soon.

For now, we would encourage tenants and landlords to work with letting agents who are members of a recognised professional body and who follows the standards set out in the RICS UK Residential Property Standards.

:: Dr Patrice Cairns is Northern Ireland policy manager for the Royal Institution of Chartered Surveyors (RICS), the principal independent body representing professionals employed in the land, property and construction sectors. The organisation represents 4,000 cross-sectoral members in the north comprising of chartered and associate surveyors, trainees and students.