Affordability

High rents prevent tenants from enjoying the quality of life they would have in other tenures. On top of this, speculation by landlords in the property market has made it harder for renters to escape high rents, and also takes investment out of productive parts of the economy that might otherwise build homes or create jobs.

While the government has reformed the tax system to discourage speculation, there remains an urgent need for investment in house building that would reduce private rents and ensure that more homes are affordable to people on low incomes.

We have proposed a number of initiatives that could help build affordable homes and fund them:

  • A secondary housing market where new homes are sold at cost price on the condition that they become part of a regulated market of controlled rents and limited house price increases.
  • A levy on landlords to recoup the billions of pounds of housing benefit they receive. This money could then fund new social homes.
  • Local flexible rent caps where landlords can opt out as long as they pay some of their rent charged above the cap into a local social housing fund.

Alongside rents, other housing-related costs such as energy bills add to the burden on many renters. Fuel poverty affects 1 in 5 private renters - that means that the cost of heating their home adequately would pull them below the poverty line. The most effective way of combating fuel poverty is to make energy efficiency improvements to homes typically occupied by those on low incomes, many of whom are in the private rented sector. Generation Rent works with the End Fuel Poverty Coalition to campaign for government action on this.

The cost of moving can also be made cheaper. Banning letting agent fees to tenants would lower the cost of moving, making the lettings market more efficient and forcing agents to compete for landlords' business instead of creaming off fees from captured tenants. (READ MORE)

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  • commented 2015-02-21 10:10:04 +0000
    I presume Stephen that you are also a landlord and that was a defence of that interest. I would conclude that it should be entirely possible to model the scale of subsidy to the PRS post 2000 and its role in the 2007/8 crash. It is evidence of the paucity of debate, the complicity of thought and action and collusion re the interests of property re neo liberal economics and the current state of the Labour Party, in short it utterly beggars belief, that given the supposed condition of the country’s finances, that a proper analysis of the role of the PRS in 2007/8 has not occurred. I have always considered my self a reasonable man but the phrases that increasingly come to mind and have greater relevance and “bite” are “class war” and the 18th Century adage “property is theft”; if one combines that to the evident collusion and domination of Parliament to the interests of property then the divisions of this country are becoming profound and the PRS is at the heart of that manifestation and the decline in our industrial/agricultural productivity relative to propertied wealth. Dangerous omens.
  • commented 2015-02-19 12:26:28 +0000
    It is hard to quantify the exact figure that was given to the PRS sector when the government intervened. It would have been logistically impossible to set out each individual sector and split it accurately. What happen then is not what is happening now.
    As I have previously stated, the PRS is far from perfect but it is the only vehicle available at this time which does help most but sadly misses the most needy in society.

    We can all argue whether it offers value for money, but the truth remains that we will see no real change to the present crisis until a government puts in place an strategy for housing that is both affordable and allows people to feel secure so they become part of a community. There is no short term answer and it has to become as political as the NHS and education, not as I fear a pre-election sound bite that is being used to stir up feelings and gain support just long enough to get a party over the finishing line.

    HMRC describes residential letting of properties “as a business” and therefore if Landlords are now going to have to view their properties as a business then they are going to run their portfolio’s along side business models which primarily are reducing costs and increasing profits. This does not sound like a recipe for providing low cost affordable housing through the PRS.

    Landlords in general do not rent houses out of a sense of social conscience but for investment. This has been the case since day 1 of renting and all tenancies begin with the words “The Landlord lets and the Tenant takes” There is no co-operative taking place only a tolerance for the benefit of both parties. To have a society where housing is made available to all without cost is unlikely ever to happen. For any government to provide the level of housing required will need funds removed from elsewhere. Do we reduce money in the NHS, Education, what about cutting out MP’S second home allowances?

    What I find most ironic is the MP’s who state there is not enough rented accommodation in London and costs are escalating at the same time getting paid to rent a second home and if your lucky enough to be married to an MP you can get two allowances

    There is no one single solution and sadly it will take a long time, a strong political will, to even get close to addressing the crisis properly. Whilst MP’S decide the best way forward, the problem will continue to grow faster than they can act and the funds required will and only come from the private sector which is the perceived fault at present with ever increasing rentals.
  • commented 2015-02-19 09:24:22 +0000
    The most effective way of targeting fuel poverty is through a Fair Rent Act that will put more money in tenants hands, reduce profits and the unethical returns of landlords to 3.5% annually. Housing is not a “market”; people do not have a choice here; unless they live on the street; the land banks around Bristol should be used “for affordable housing” and invested for the long term for long term returns for local people not the profits of Tory builders ; the likes of Wimpey et al; that will reduce opposition and the hysteria of the privileged. Once again Stephen you have nt told me either the cost of the public subsidy to the PRS (which should have been alllowed to collapse in 2007/8 and the resource nationalised via the public banks ie far better use of public money), the level of multiple owners there’s one in Easton that owns 150 houses or whether you are actually a landlord given your defense of the status quo. Do you think the PRS is value for public money this past decade?
  • commented 2015-02-16 16:38:08 +0000
    Your ideas are interesting not sure how the “Green Party” would react to seeing green belt land built upon. Bristol City Council have no building land left and approached BANES council to build the houses required by the government to meet the target set. The public outcry both in Whitchurch, Keynsham and Saltford was immense. In the end Banes and Bristol ignored these and with the help from the Government Inspector passed plans to build in what was " Green Belt". The sad reality is that whilst everyone believes houses are required to be built, they are happy as long as it doesn’t spoil their view.
  • commented 2015-02-16 15:43:18 +0000
    Stephen it is often quoted that 70% of PRS landlords own one “extra” house but what proportion of the resource does the remaining 30% own ? The fact remains that this is a massive transfer of property ownership to the 10% which is not desirable in an overcrowded island post 1979.
  • commented 2015-02-16 15:02:31 +0000
    No one seems to answer my question as to how many billions or 100’s of billions in public subsidy the PRS has received this past 15 years. There is less social housing I believe than in 1980 and that is the indictment of the post 1979 record of government and intrinsic to UK debt is private sector mortgage debt which outweighs public sector debt by a large factor . The PRS is I believe 15% of the market so I simply do not accept your essential tenet that a Fair Rent Act based on 3.5% returns after a maintenance fee does not have a role in this society; that is essentially the German model and I do not think that it is arguable that Germany works well. The PRS is quite simply not fit for purpose and landlordism at worst is a reversion to a petty and individual Victorian tyranny; at best currently it is a “personal favour” which is hardly a rights based democracy. With regard to the PRS most importantly the profits from the sector over time are not being recycled into new build and drive the need for Green Belt development, student and HB debt. The PRS sector is not overall in particularly good repair and is in decline; landlords should be encouraged to sell; but I do support strong rights of return for the owners of one house if rented out while abroad, which would cover most of your examples and council houses have to have strong powers re empty houses.

    I would note that the current injection of over 100 billions by George Osbourne and the Conservative Coalition into Right to Buy has hardly built a house also and is a bribe to “the haves” and that the cross party housing policy from the many twin homeowners and large landlords of the British Parliament is remarkably in parallel.

    We have very expensive private sector housing indeed; it is the large component of UK debt. My only solution is that Bristol Green Belt land is released to local working people directly at agricultural rates via housing co-ops/council build and would like to see an end to all building of “unaffordable housing” which given the 100’s and 100’s of billions of subsidy, probably half a trillion, might be a useful contribution to the future coherence of the UK. Bristol, if it were to be agreed by its university might follow the traditional model of Cadbury’s or Bourneville estates and make it a long term investment, instead of a quick buck, and lay down a garden suburb for local people, a public legacy, to which Bristol University could hold its head high.
  • commented 2015-02-16 13:07:51 +0000
    Peter, I fully understand your frustration and can only assume that the government felt it was an easier option to subsidise the Buy to Let Market rather than use the monies to provide long term social housing. Where you and I may agree is that I believe that the fault in the Housing Crisis falls solely on Local government and successive governments in not supporting the housing needs of the low income families. Obviously they are unlikely to become House Owners and this should have been recognised and dealt with. Labour governments and the Tories have both ignored this issue to such an extent offering to built 200 000 homes is like offering a breadcrumb to a man dying of hunger.

    What I don’t agree with is the view that the PRS is duty obligated to become a replacement for Social Housing. The two are completely different animals and have different objectives. This battering of Landlords will not resolve the core issue being a shortfall in houses being built year upon year to meet the needs of the people who seek long term security via low cost rented accommodation. It seems to be a great smoke screen is being played to hid the real issues these are not to ban agent letting fees, extend the minimum term of an AST to three years and cap rents.

    Many Landlords like yours, as it seems are happy for you to live at your home as long as you feel you want to. Yes there is always the threat of having 2 months notice but would you feel any safer it was doubled to 4 months, probably not. If you return to the pre 1988 Housing Act where the Landlord was unable to give notice and had to go to court to seek possession, this would severely be detrimental to the current PRS.

    The average Landlord has one property and here are some examples of them who well may not rent if we reverted back to the pre 1988 Housing Act
    1. Service men who rent their houses out whilst they are away on active duty
    2. Children who rent their parents house out to pay for nursing care
    3. People who have relocated for their jobs and were unable to sell
    4. Divorced people who move in together but still want to retain their house in case the relationship doesn’t work

    How would you propose we deal with this Landlords?

    Housing is very personal and it is hard to adapt the housing laws to suit all. What is certain all the legislation in the world won’t change the fundamental problem – The lack of building social housing to meet the needs of hard working people whose income will not allow them to become house owners
  • commented 2015-02-16 11:06:36 +0000
    Mr Seymour. I am 56. I also live and work in Bristol. I have 20 years experience in learning disability and mental health. I earn 9 pound an hour with no holiday or sick pay and have not had a pay rise for 6 years now, I am often responsible for medication leading a shift and supervising other staff, I have paid my rent consistently for 35 years. I have now gone on the staff bank because I take less responsibility there. I have spent my life in the private rented sector so can I suggest as restrained and as politely as I possibly can that I have as much experience of the Bristol rental market as you have and that many of my younger colleagues at work are also what you might describe as “the landllord’s cash cow”; and at the end of a lifetime service to Bristol and of paying rent to your industry I still am on a months (or is it two ?) from instant homelessness and watch the landlord making more than I earn, unearned and over my head. The prices of houses in Easton where I live have more than doubled in 20 years and rents are currently advertised at over 900 a month and I was paying 375 in 1994 so I take your Bristol figures with a very liberal pinch of “sea salt”, Sir. A friend of mine’s grandson and son were hospitalised due to damp in the BRI the other day and another friend’s daughter on Filton Avenue has had the rent put up because “she redecorated and had a baby” and as his accountant states “he’s not running a charity”. How very charming when he has made 50,000 over the past few years ! How does that make the tenant feel with regard to, as you so put it, “happy lives”. We are approaching another Victorian era and the principle divide is housing and the industry in which you work and what is most remarkable about the finance of this industry is that it has not built a single house but merely profitted via bank speculation on the efforts of previous generations of Bristolians; while a two bedroom council house in Easton is 450 a month is in profit and the tenant can expect a consistency of standard and has a complaints structure that is real and empowering. I could have had my representative of your industry if not sacked then disciplined for the manner in which he threatened my friend with eviction (would we have been homeless in one month or two pray tell?) if we did not accept the 30% rent rise. It is frankly institutional bullying and profiteering with returns over 15% on the poor and the young and low paid key workers like myself. 3.5% is fair.

    Now the question that I have repeatedly put to Ed Balls MP re affordability is the role of Buy to Let and how much of the support that the Labour government afforded to private mortgages via Northern Rock HBOS, Alliance and Leicester the hundreds of billions in QE is attributable to the high rental returns, 25 billion in HB and multiple occupancies, student debt that conceal what I argue is the UK equivalence of the sub prime market and both reduces supply and props up the entry level of the market vis Filton Evenue…how doe sthis effect the historic low levels of investment in UK manufactruring when flats on the Gloucester Road are advertised as “high level return investment”. Why did Ed Balls MP not introduce rent controls and strong tenants rights to contain the property bubble in 2000 and how much would this have saved the country in 2007/8. I never get an answer so perhaps your organisation might answer how much public subsidy it received in 2007/8 and on this point and on the proposal to build 50,000 affordable homes by 2020 and the “medieval serfdom” that are tenants rights have resigned Bristol West Labour Party, after a lifetime of membership.
  • commented 2015-02-16 07:31:39 +0000
    As the property drought tightens its grip, average asking prices for property new to the marked bounced up by 2.1% over the last month, Rightmove reported this morning.

    The increase equates to an average of £5,729, with annual asking prices up 8.2% on this time last year. Rises in asking prices are reported in all regions of England and Wales.

    Rightmove said that some agents are reporting the lowest ever stock of quality property for sale, meaning that there is little for home movers to trade up to.

    It said that lower owner occupation, buy-to-let landlords not selling, and owners’ reluctance to put their home up for sale until they had found their next property, were all contributing to a 4% fall in new seller numbers compared with a year ago.

    There are just 58 properties for sale per agency branch, up just one from December but down from 64 a year ago.

    Rightmove said that stock had never been lower at the start of a year.

    According to Rightmove, a 31% increase in housing transactions in the last two years in England and Wales has outstripped the 11% increase in the number of new properties coming to market over the same period.

    Director Miles Shipside said: “Many who are contemplating moving will have noticed a lack of suitable property for sale in their area and may be hoping that it’s a temporary shortage.

    “What they may not fully appreciate is that this is the new norm.

    “It is the consequence of over 20 years of not enough homes being built to meet the burgeoning growth in household numbers, resulting in a lack of quality homes for sale in many popular areas.”

    The survey released this morning was based on 115,853 asking prices of properties put on the market by agents between January 11 and February 7.
  • commented 2015-02-15 13:20:35 +0000
    Peter I have been a Letting Agent in Bridtol for 28 years. I also provide free housing advice and legal assistance to tenants who face problems with their Landlords. I am well aware of the problems some tenants face in respect of rent problems., poor housing and the inability to fight their cause.
    I get tired of reading that All tenants are finding it impossible to pay the rent, suffer at the hand of every Landlord. My company has let over 10 000 homes in Bristol and my comments are based upon my dealing with them. what are your creditials?

    The London rental market is not the whole market place far from it and to judge tenant reaction to escalating rents in London does not represent the views of the 4.5 million houses throughout the UK.
  • commented 2015-02-15 12:10:19 +0000
    I simply do not accept this analysis Stephen, I do not accept your portrayal of the Bristol lettings market, could you perhaps declare your interest ?
  • commented 2015-02-13 13:40:42 +0000
    There are many tenants who do not find it difficult to rent a house , pay their energy bill and live a perfectly happy life. There are however some who are at the other end of the scale and would like to see rent controls. Many believe the high cost of rents are solely down to Letting Agents and Landlords always seeking higher rents without any involvement from the tenant. Simply from my own day to day dealing within the PRS, this simply isn’t the case,

    A property is advertised at a fair rent, prospective tenants view the property and several of them want to rent it. Without doubt one of the tenants will offer more rental if he is chosen and unless the Letting Agent or Landlord is ethical by sticking to the advertised price, then the rent goes up even higher than was advertised. Tenant lives in property for 2 years which during that time an agreed rent rise occurs and at the end the whole process goes on and on. The whole reason rents are escalating is solely down to a lack of supply and despite popular beliefs there are many tenants out there wiling to pay a higher rent to secure the property leaving those on a limited budget struggling to find housing. Ultimately they get forced into poor quality housing as no one else wants this and in turn is allowing poor quality Landlords to thrive in a market that has no place for them.

    Rent controls would help control this problem to some degree but sadly the average level of rents currently are simply too high for the low income families and those who are divorced, single and the elderly.

    In 1988 the price of an average two bedroom family house in Bristol was approximately £375.00 pcm in 2014 the cost £725.00 pcm

    Compared to other essentials rental prices have done reasonably well. When the recession occurred in the late 1990’s and the first time buyer fell out of the market, this slack was taken up by the Buy to Let Landlord. This fuelled house prices and subsequently pushed up rentals. As we moved on and another recession came in 2007/2008 it seemed that having a house to rent became a fashion accessory. However many Landlords found out that renting houses came with responsibilities which they didn’t want and as the selling market improved in 2010/2011, found this to be an opportunity to sell their “Pension Plan”. During the last 12 months despite the hype of Buy To Let, the number of private houses coming on to the market has diminished to a very low levels and now we are back to where the tenant is not having a range of houses to choose from and is being forced into taking properties which may not suit them . Hence we now see tenant offering to pay above the advertised prices.

    There is no single solution and certainly not a solution which in the short term is going to resolve the crisis. No single party is going to be able to magic up the required number of homes. It must be recognised that the PRS is vital to helping the crisis and only through better dialogue and co-operation is a solution going to be found. Active participation by both sides will achieve this. Painting all landlords as profiteering, uncaring people will not get the job done.

    The vast majority of tenants are happy and we can also recite tails of poor Landlords and know of tenants struggling but this is not representative of the PRS. In any sector it is always the bottom that suffers and whilst we must help resolve the problem, there no need to damage the rest in trying to help.
  • commented 2015-01-28 12:14:09 +0000
    It is also important to understand that the principal beneficiaries of the 2007/8 Bail Out of the banks were the landlords; the 1%, that drove private sector mortgage debt post 2000 and in the period post 2007/8 as the Bank of England failed to allow the market to “correct”; out of fear re banks “liquidity”. This therefore is my question to Mervyn King and Ed Balls, why did they “bail out” more than one mortgage per person and why as Bank of England interest rate policy fails repeatedly to contain "housing speculation “Booms and Busts”" did they not consider rent controls and tenants rights and nationalising the assets of failed property speculators. The nation had bought these houses effectively and this was fair collateral for the loan; instead we have paid twice for this housing, in terms of housing benefit and high rents to the ghettoes of these private speculators, built on the work of previous generations.

    3.5% returns and secure tenancies on rented property are the fair instruments to rebalance the economy towards manufacturing investment, and when Angela Merkel is on the record of favouring rent control, the Thatcherite arguments for rent control abolition have to be seen as base profiteering off the poor and simultaneously pure naiivete in terms of her ideal of a “property owning democracy” as post 1980 another 10% of housing has transfered to multiple owners at the expense of the entry level. The colosall scale of landlord investment in the 10% of the already built housing stock has to run into many hundreds of billions and when council housing is in profit, despite the 70 billion leached out by Right to Buy, high rents is the expensive and corrupting debt to national life; the epitaph to Thatcher and New Labour’s “free market” housing policy.
  • commented 2015-01-28 11:47:37 +0000
    If you are renting and agree with the sentiments of this link, please add your own feelings and be heard.
  • commented 2015-01-28 11:40:45 +0000
    As a tenant, I completely agree with the points raised. Despite being a divorced dad on a reasonable average salary, with rent, maintenance and my own meagre household bills to pay I am finding it difficult to exist, let alone live at the moment and I see the lack of control of rental prices as the main culprit. I feel the huge difference between a mortgage on an equivalent or better property than the one I currently reside in and the sum I pay as a tenant, is sapping me of any quality of life and having a huge affect on my ability to meet my own basic requirements, as well as those of my children. High rent costs also mean I have no budget left to spend as a consumer, having an obvious knock on effect to the economy. I feel the introduction of firmer regulation, or higher taxation on landlords to force them to reconsider the high numbers of properties they hold on their portfolios would benefit us all. I appreciate landlords rights to invest in property, but this is having a negative impact on the wider population and our quality of life. This is not a reasonable situation and needs addressing urgently! Enough is enough!
  • commented 2015-01-21 12:36:37 +0000
    Please God yes let’s have rent control! The government must start trying to help normal people. there is no point in their scheme to help first time buyers when we are being gouged by landlords!
  • commented 2014-11-09 11:45:47 +0000
    There is an urgent need for rent controls to protect the homes of people and rebalance the economy. I suggest that 3.5% returns on investment plus a 50% share of maintenance is fair; this would result in rents of around 500 a month on a 150,000 pound house; this is fair and would incentivise work, save the tax payer housing benefit, and put money in peoples pockets reflating the economy not banks. It should not be the responsibility of the tenant to repay the landlords loan; this is indeed invidious and unjust and fundamental reform is required of the principles that underpin this “industry” that has never built a single house but merely speculated on the work of previous generations and the income of its tenants who have no choice but to live in a “tyranny”.