For many, home ownership remains out of reach. The millennial generation (those born between 1981 and 2000) are four times more likely to be renting privately at age 30 than baby boomers.
Unsurprisingly then, helping those unable to purchase homes has been a core policy focus of consecutive Conservative administrations. Government has sought to support the market through measures like Help-to-Buy, and cutting Stamp Duty relief for the majority of first-time buyers.
But helping those locked out of ownership should be about more than just providing cheap loans and tax breaks to the few who will be able to buy as a result of these policies. It is also important to ensure that those who are unlikely to be able to buy anytime soon do not have to live in second-rate housing. Achieving this requires radical reform of the private rented sector.
Despite being home to around 4.7m households, the private rented sector is not fit for purpose. Too many tenants are exposed to high-cost, low-quality, insecure accommodation over which they can exert little control. All the while, austerity has undermined the structural supports which should underpin the sector, with the welfare state and the court system failing to provide support or confidence to tenants and landlords.
At IPPR we have been conducting focus groups across the country with tenants and landlords, aiming to understand more about people’s experiences of the tenure and what they would like to see done to reform it. Our report released on Monday details the in-depth conversations we have had with tenants and landlords which allowed us to test and refine policies which can address the fundamental problems with the private rented sector.
At its core, a programme of reform of the private rented sector needs to bring the sector up to date with how it is being used. Private renting is no longer a temporary stop on the way to more permanent housing: it is a long-term option for many, including an increasing number of families. The number of families with children who rent from private landlords has grown from 461,112 in 1996-97, to 1.7m in 2016/17.
If the private rented sector is to work for these groups it needs new regulation which give tenants greater stability and more control over their homes. At the forefront of these efforts should be scrapping no-fault evictions (Section 21), ending the current system of fixed-term rental contracts, replacing them with open-ended tenancies and tightening the rules so that landlords can no longer evict people without good reason.
This is important as the current system breeds a sense of instability amongst tenants. As one private tenant in London told us:
“I’d like somewhere that I can call my home because at the moment, you never know when you’ve got to move on. There’s always a phone call to say, ‘That’s it, move.’”
Ending no-fault eviction would be a major step forward for renters’ rights. It would give tenants the confidence that they can stay in their homes in the long term, allowing families to plan for the future. It would also rebalance the power in the sector between tenants and landlords, giving the former greater bargaining power when easy eviction is no longer an option.
At the same time, tenure reform provides an opportunity to improve the control tenants have over their homes. As tenants live in the private rented sector for longer, it is right that they can make their house their home. For this reason, we have argued that landlords should be prevented from banning tenants from having pets and undertaking reasonable decoration.
Our conversations with landlords showed that many were supportive of greater protections for tenants. As a landlord in Bristol put it:
“You think about people with families, like, young children, if they go to local schools, it’s in their best interests to stay put, isn’t it? Otherwise it messes the child up having to keep moving around and, you know, it’s a knock-on effect for lots of things, isn’t it?”
That said, if a government is to command the confidence of landlords it will also need to do something to reform both the financial support available to tenants and the court system to ensure the market works effectively.
Accordingly, we are calling for changes to welfare reforms which have made it more difficult for families in financial difficulties to rent homes in the private sector – including restoring direct payment of housing benefits to their landlord where a tenant wants this. We have also proposed the creation of a specialist housing court and a mediation service, which will give landlords the confidence and security they need whilst still offering greater protections to tenants.
As the private rented sector plays a bigger role in the housing market it is essential that greater reform is undertaken. What is more, doing so commands significant public support.
Polling commissioned by IPPR shows that 72 per cent of the public think government should be more involved in improving and regulating the private rented sector. Moreover, analysis conducted by the housing charity Shelter has shown that, in marginal constituencies, private tenants make up a significant block of voters and could be a key factor which determines coming elections.
For the party that is bold enough to undertake the radical reform that is needed there could be significant electoral rewards.
Darren Baxter is a research fellow at IPPR. He tweets @DarrenBaxter.