99. The private rented sector in Northern Ireland has grown steadily in the past ten years and there are now around 49,000 privately rented dwellings.[153] Much of this growth has been achieved through 'buy-to-rent' or 'build-to-rent', and this trend has been fuelled by high capital appreciation rather than excessive rents. It is recognised that the sector, which accounts for 7.6% of the total housing stock, plays an important role in meeting housing need particularly in areas of high demand for social housing.[154] The Northern Ireland Tenants Action Project told us that "households are increasingly turning to the private rented sector because they cannot access the public sector or are probably staying in the private rented sector for a lot longer than would have normally or previously been the case."[155] The advantages of private rented sector housing are that it offers a range and flexibility that may not be available in the social sector. It can also provide an opportunity to live in a mixed community since much of the social housing can be seen as quite polarised.[156]

100. NIHE explained that there are essentially two private rented sector markets in Northern Ireland: one with the old and unfit rental dwellings which require renovation; and the other an emerging market served mainly by buy to let properties. [157] It pointed out that the new private rented sector could complement or compete with social housing provision. For example, in areas of high housing need, such accommodation can attract young single people thereby reducing the waiting list; but in areas where housing demand is low new modern private accommodation can attract tenants out of existing social housing.

101. Worries were expressed to us about standards in this sector. The Foyer Federation was concerned that young vulnerable people moving on from Foyers could find themselves in unfit housing in the private rented sector putting their health and mental well-being at risk.[158] The Housing Rights Service encapsulated some of the problems which could be faced by tenants in such accommodation:

"Often private tenants are paying high rents for accommodation which is unfit, in disrepair or lacks modern facilities such as central heating. Enforcement of repairs is an ongoing issue. Private tenants are normally unaware of their rights and the available remedies in this area. We find that some are reluctant to take any action and are concerned about the possible consequences, such as eviction."[159]

102. The CIH suggested that value for money in the private rented sector needed to be examined given the high level of unfitness, the absence of any regulation in relation to quality, and the escalating cost of housing benefit. The housing benefit bill for this sector had risen recently from £85 million to over £110 million.[160] The NIHE, which administers housing benefit in Northern Ireland, explained that growth in private renting and rent increases in both the private and social sectors had pushed up housing benefit costs. The total housing benefit bill increased from £312 million in 1999/2000 to £347 million in 2003/04. However, over the same period the number of NIHE housing benefit claimants fell by 22%, while the number of private sector housing benefit claimants rose by 35%. The average housing benefit awards rose by 21% in NIHE housing, and by 18% in the private sector.[161]

103. In view of the concerns expressed about the escalating cost of housing benefit in recent years, we welcome the Department's research into the relationship between housing benefit levels and expansion of private renting.[162]

104. The private sector's ability to complement the provision of social housing is widely accepted. However, it is generally recognised that the relevant legislation, the Rent (Northern Ireland) Order 1978, is cumbersome and out of date focusing primarily on rent control determined by the letting history of the property, rather than providing any remedy for poor quality or unfitness. In particular, concerns about inconsistencies in tenants' rights, rent control, and unfitness across sector led the Department to carry out a review of the legislation last year, and a subsequent decision to prepare new legislation "which will aim to improve conditions in the private rented sector and bring us to a situation where government intervention in the sector in terms of rent control will be determined by fitness and not as exists at the moment where government intervention is determined by the status of the property in 1978".[163]

105. In addition, we were told that the NIHE was developing a strategy for the sector to ensure that it can play "a meaningful role as a viable and affordable alternative to social housing for those in need, whilst recognising the rapidly increasing costs of housing benefits to private sector tenants".[164]

106. We recognise the increasingly important role played by the private rented sector in meeting housing need across Northern Ireland, and we particularly welcome the recent publication of the strategic framework for the sector by the Department for Social Development and NIHE.[165] We were pleased to see that the strategy has been developed in consultation with relevant stakeholders and that there appears to be a high degree of commitment on the part of government to its implementation.

107. Some concerns have been expressed to us about the level of fitness standards to be used in the proposed new legislation to improve housing conditions in the private sector; and there was also a call for provision of rent guaranteed tenancy deposit schemes which could assist homeless people in gaining access to the private rented sector.[166] We welcome the prospect of legislative proposals and will wish to scrutinise these in due course.

154   HC 493-II Ev 62 Back

155   HC 493-II Q265 Ev 108 Back

156   HC 493-II Q363 Ev 165 Back

157   HC 493-II Q203 Ev 94-95 Back

158   HC 493-II Ev 158 Back

159   HC 493-II Ev 149 Back

160   HC 493-II Q48 Ev 16 Back

161   HC 493-II Ev 99/100 Back

162   HC 493-II Ev 84 Back

163   HC 493-II Q162 Ev 78 Back

164   HC 493-II Ev 62 Back

165   Renting privately, a strategic framework, Department for Social Development & NIHE, May 2004 Back

166   HC 493-II Q363 Ev 165 Back