Generation Rent has today challenged politicians to offer the electorate ambitious solutions to fix the housing crisis, as we launch our Renters’ Manifesto.
In the manifesto, which follows a public consultation, Generation Rent proposes:
- Reform of the private rental market, which currently fails the millions of renters now stuck there, with the right to a five-year tenancy and professionalization of landlords and letting agents.
- A new housing market that allows buyers to opt-out of rising house prices in return for a lower initial price.
- A new department with a remit to fix the housing crisis and save the taxpayer billions.
Nine million people in England – or nearly 4 million households – rent from a private landlord. Generation Rent has found that this figure has increased by an average of 180,000 households per year over the past decade as home ownership has fallen out of reach for more people. While mortgages for first time buyers were up by 50,000 in 2013 to 268,800 this is unlikely to reverse the long term growth of renting, especially with new rules that make it more difficult to get a mortgage and competition for houses from pensioners who will be free to use savings to invest in buy-to-let.
There are enough private renters with no party allegiance to overturn the majority in 86 constituencies at next year’s General Election. This Manifesto offers political parties policies that will help them win over this newly important electorate.
Reform “second class” private renting
Private renting is a second-class tenure, treated by government more as an investment vehicle for a small minority than a place to live for 9 million people. Despite policies to help renters into home ownership, the majority of us will be renting for many years to come. We need a place we can call home – something that owner occupiers take for granted.
Generation Rent proposes the right to a five year tenancy, which would give tenants greater confidence in dealing with their landlord and planning their finances and family life. Having the right to a longer tenancy would preserve the tenant’s flexibility if they need to move to a larger home or for work.
Long term tenancies benefit both tenants and landlords who can not only better plan their finances but work together without suspicion to keep the property in good repair. The next government must enshrine the right to a long tenancy into law, otherwise letting agents will simply block them and continue to cream off renewal fees.
Tenants typically have contracts of 12 months, and landlords have the right to serve eviction without giving a reason. More than a third of private rented homes suffer from hazards to health and safety. Shelter has found that 213,000 renters were evicted last year after complaining about poor conditions. There is an urgent need for housing justice for renters.
With the number of families with children living in private renting having doubled since the credit crunch, from 625,000 in 2006/7 to 1,273,000 in 2012/3, there is even greater urgency for the government to ensure children have a safe and stable upbringing.
In the Renters’ Manifesto, we call on political parties to promise this newly important electorate a Landlord and Tenant Act which will create a private rented sector fit for the twenty-first century, with:
- The right to a five-year tenancy, with flexibility for the tenant
- A national register of landlords to help government improve standards and tackle rogue landlords
- Licensing of letting agents to bring the profession into line with estate agents
- Reform decency standards and require landlords to prove they meet them
New housing market to enable people to opt out of the bubble
As speculators have snapped up London’s houses, prices have risen so far people living and working here have simply given up on ever buying a home. Most people want to buy somewhere to live, not something they can flip for a profit.
We propose that the government starts to build houses that can only be sold on for a limited increase in price, which would deter speculators and ensure that people could buy a home for little more than the cost of building it.
With an initial budget of £1 billion of public money, the secondary housing market would allow 10,000 homes to be built on state-owned land and sold leasehold at very near cost price. Properties would be sold to owner-occupiers on the condition that any future sale price would not rise by more than inflation, and to landlords on the condition that rents would be controlled. The proceeds of the sales would continue to finance the building of more houses under the same model.
For a very small up-front cost for government, such a policy could bring tens of thousands of new homes to market, without having to draw further from the Treasury.
This alternative to the free market would help people on ordinary incomes who are priced out of the open market to access home ownership, and boost the availability of genuinely affordable rented housing. It would also provide downward pressure on house prices and rents in the wider market and help to prevent future bubbles, while lower rents would enable social tenants to move to a more appropriate home, and free up council housing.
Read more here.
Cut housing benefit bill with new Department for Housing
The problem of unaffordable housing will never be solved when three departments are responsible for different parts of the housing sector, at least six more are affected by housing issues, and the minister for housing is on the lowest rung of the ministerial ladder.
A Secretary of State for Housing would bring house building, housing benefit, construction and building regulations under one roof and ensure that public money is used more efficiently.
Currently house building is the responsibility of the Department for Communities and Local Government which has a budget of £1.13bn through the Affordable Homes Programme, but the Department for Work and Pensions spends 19 times that - £21.2bn a year – on housing benefit in England. Hazardous housing conditions also increase the costs to the NHS by £600 million according to the Chartered Institute for Environmental Health.
Since 2010, almost 100,000 homes have been built by local authorities and housing associations in England, but during the same period the number of housing benefit claimants increased by 227,000, meaning that public subsidy ends up in the hands of private landlords.
Despite the recovery the number of workers claiming housing benefit has increased from 650,000 when the Coalition took power to 1,050,000 today. With the housing benefit bill predicted to keep on rising, a single department could be funded to spearhead a major house building programme. By making these homes available to new benefits claimants being housed by local authorities, such a move would immediately start to bring down the welfare bill.
Generation Rent envisages that a single Housing Department would take over responsibility for construction – a policy currently in the remit of the Department for Business, Innovation and Skills – while ensuring other Departments consider housing issues as part of their work, and can refer to a consistent government voice on housing to help find solutions:
- Health – poor conditions in housing can cause respiratory problems and accidents
- Education – children’s education can suffer from an unstable home life, and this issue is growing as more families are stuck renting privately
- Energy and Climate Change – homes play a central role in improving the country’s energy efficiency
- Environment, Food and Rural Affairs – any work to prevent and respond to flooding must focus on homes
- Transport – new housing could be planned around major infrastructure projects
- Treasury – as the economy recovers, effective management of the mortgage market is essential
Metro, 17 June, page 4
London Evening Standard, 17 June
Times, 18 June, page 12 (£)
Guardian, 18 June