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Private renting isn’t working – here’s how to change it

01.04.13 | 4,753 Comments

(from The Telegaph)

Every day millions of Britons travel home from work, walk through someone else’s front door, and go to sleep in a house that isn’t theirs. This is literally true: 8.5 million people in England now rent, and that number is soaring. But it also describes how renting from a private landlord often feels. In a recent survey, nearly half of private renterssaid the house they live in doesn’t feel like “home”.

It’s hardly news that home ownership is an ever-receding dream for increasing numbers of today’s young (and not-so-young). Even after the recent slump in prices, the average house costs over five times the average wage (up from three in 1997). A 21-year-old starting work on a normal income today who manages to save five per cent of her salary, year after year, can expect to have the keys to her own front door – by the time she’s 52.

This all adds up to a simple fact: renting is the new normal for my generation of young adults, and, absent a house-building programme on a scale not seen since the 1960s, it’s set to stay that way.

So why, as more and more people face up to a lifetime of renting, must they do so in the most dysfunctional rental market in the Western world?The average tenancy in England lasts just over 18 months, and for many it’s a time characterised by irritation and fear. Periodically we hear of the need to ‘crack down’ on ‘rogue’ landlords who charge extortionate rents for substandard properties. But, pleasing as it is when the odd malefactor is caught out – like the man in Plymouth against whom the council is seeking an Asbo to stop him leasing dodgy homes– the problems with private renting in the UK have to do with the system, not individuals.

The current arrangement was drawn up in the 1980s, when the private rented sector was small, choked by rent controls and overladen with regulation that made evicting problem tenants difficult. New laws, which allowed eviction without cause at two months’ notice and provided for unlimited rent hikes, led to a buy-to-let boom and a massive expansion of the rental market.

Those changes were necessary to make private renting more flexible for tenants, landlords and investors. But in 2012, when renters are nearly as likely to be families as footloose young professionals and fancy-free students (nearly a third have kids, and almost half are over 35) the system is no longer fit for purpose.

When I asked friends – typical members of “Generation Rent” in their 20s and 30s who work for a living – about their experiences of renting, few were without their horror stories. One arrived in his new flat to find the place already occupied – by a family of large rats – and discovered that the filthy downstairs property, which was owned by the same landlord, was being used illegally as a kitchen for the fried-chicken restaurant next door. Another happened to catch on video the moment a leak in the ceiling turned into a large hole; when she presented the evidence to her landlord, demanding he call a plasterer, he shrugged and said she was overreacting.

These examples are from London, showing how powerless tenants can be in the country’s busiest private rental market. But for every case like these there are many more people up and down the country living in constant anxiety that an unaffordable rent hike will force them to uproot, or worried that asking for routine repairs will lead to them being replaced with more pliable tenants.

In countries like France and Germany they do things differently – and it’s no coincidence that in those places many see renting as an attractive long-term option rather than a purgatory to be endured on the way to the heaven of home ownership. In a recent policy report, the charity Shelter came up with a sensible, detailed plan for how we can learn from the Europeans: by introducing the option of tenancies of up to five years with annual rent increases linked to the rate of inflation.

Not only would this provide the stability tenants need – particularly those with children, for whom being forced to move homes and even schools can sometimes prove genuinely disastrous – there’s evidence to suggest landlords would benefit too. More predictable rent increases would enable them to plan for the long-term, and reduce periods between tenancies when they collect no rent. What’s more, people who expect to live in their home for more than just a year or two are likely to prove better tenants, with more investment in their homes and community.

Our failure to deal with the problem is, in part, due to our national cult of home ownership – as though you have no right to feel secure under your own roof unless you bought each tile outright. Like a neglectful landlord, we have trouble understanding that a rented house should still be a home. The private rental market is falling into disrepair: it’s time to carry out some essential maintenance work.

4,753 Comments