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)
The private rented sector needs reorganisation. As private renting has grown, there are now a significant number of non-professional landlords with small portfolios, letting out their properties alongside another job. Although voluntary accreditation schemes exist, the uptake remains small and so there is no way for tenants to guarantee that their landlord is a good one. The rise of the PRS has also seen an increase in letting agents across the country, with virtually no regulation of the sector and huge fees paid by tenants, out of proportion to the services offered.
A national register of landlords and the mandatory licensing of letting agents would mean that only professional and scrupulous people could operate in the sector and they would be accountable to tenants. It would also allow government to communicate effectively with the sector and inform policy more accurately. Furthermore, local authorities would then be able to target their resources on criminal landlords, with minimal burden on the better landlords. While several local authorities have introduced landlord licensing in their areas, the last government made it harder to do so.
The previous government did make it mandatory for letting agents to be part of a redress scheme. We are monitoring the effectiveness of these schemes in reducing poor practice and rip-offs in the sector. The government has also forced landlords and agents to carry out checks on the immigration status of would-be tenants. This is a terrible policy that will raise costs and risks breeding discrimination against anyone who doesn't sound or appear British.
Security of tenure
Too many renters in the private sector are worried about their security. Contracts of 6 months to a year are the industry norm and no-fault evictions mean that those outside of a fixed-term agreement face even greater uncertainty about their living situation. As house prices rise, more landlords decide to evict their tenants.
Whereas in the past renting was seen as a temporary option mainly for young people, before they later bought a home, it has now become a long-term reality for people across the population – from families to pensioners, low-income households to professionals. Tenants need security, to build their lives in one place and without the threat of eviction for no reason. Generation Rent is campaigning to change the culture, making long-term tenancies much more available and allowing those who want it to settle in their communities and plan their futures without fear of sudden upheaval or uncertainty about where they will live next year.
In March 2015 we succeeded - along with Shelter, GMB Young London, and other campaign groups - in persuading Parliament to ban retaliatory evictions in the Deregulation Act.
The Scottish government has reformed private tenancies to end fixed-term agreements - they will only end if the tenant decides or the landlord can meet certain conditions. We want the Westminster government to go even further by forcing landlords who evict blameless tenants to compensate them for the cost of moving. READ MORE
Decent living conditions
Three in ten privately rented homes are considered "non-decent" and one in six are physically unsafe – even though councils have a legal obligation to correct hazards in the home.
This is considerably higher than for other forms of tenure and points to a sector-wide problem. Although the law requires landlords to ensure their properties are free from major hazards, we need to go further than that and ensure that there are national minimum standards for any property being rented in the private sector. This could be done by extending the Decent Homes Standard to private rentals and making it mandatory for all new rental contracts. We also need checks and enforcement, such as mandatory periodic inspection and testing of electrical installations and appliances in all types of privately rented homes.
In March 2015 the coalition limited the use of no-fault evictions when landlords haven't made repairs that the local council has ordered - revenge evictions - through the Deregulation Act.
Read more of our proposals for improving conditions in our Queens Speech for Housing.