Inflexible, insecure, and losing them money: what the “tenancy trap” means for Britain’s renters

Oh god. Image: Getty.

All across the UK, renting is the new normal. The proportion of UK renters has doubled in the last twenty years. Yet when you think of the word “renting”, what springs to mind? The chances are that you’ll still think of students, flat-shares, arguments over milk. Alternatively, dodgy estate agents, sky-high deposits, and a tenancy agreement you need a law degree to read.

This isn’t an attempt to demonise renting – I’m a renter myself. And as both a renter and the CEO of a housing association I think that the rental offer needs to change. Gone are the days when you got the keys to your first home at 30 – middle-aged renters are one of the fastest-growing demographics. More people than ever will be renting into retirement. And the crisis of rental affordability certainly isn’t limited to London – recently Your Housing Group revealed that in the North West, average rents eat up nearly a third (26.7 per cent) of average incomes. With more people than ever renting privately for longer it’s high time that policy-makers thought long and hard about how to make renting better. Renting could and should be an attractive offer in and of itself – not something you’re strong-armed into because you can’t afford to get on the ladder.

It was with this in mind that I commissioned research about the state of renting in my home patch, the North West of England. I wanted to explore the experiences of renters – private and social – of all ages in order to understand their wants and needs, and how the sector could better work for them. There are 1,143,438 people renting in the North West – how do they feel about homes they live in?

Disappointingly, one in six respondents – equivalent to 205,818 households across the North-West – believe that they get a “poor level” of service from their landlord. This wasn’t hugely surprising – new data from MHCLG shows that hobbyist landlords dominate the market. Some 45 per cent of landlords just own one property, and only a meagre 4 per cent of private landlords are in the sector as a full-time job or business.

I know from experience that the upkeep and maintenance of tenants’ homes really is a full-time job – which begs the question of why professional landlords such as housing associations aren’t given a more substantial role in housing Britain’s growing population of renters.

Another issue that really struck me was how many renters feel fundamentally insecure in their own homes – the place they should feel safest. Around 47 per cent of those living in the North West disclosed to our pollsters that they wanted a longer-term tenancy – that’s equivalent to 537,415 households. What’s more, 83 per cent of respondents explicitly said that this was because they wanted greater “security”. Frankly, I don’t blame them – tenancies ended by landlords accounted for 28 per cent of all local authority homelessness acceptances in 2017, and Citizen’s Advice research revealed that renters who complain about problems with their homes are 46 per cent more likely to be evicted.

Precarious tenancies are clearly a really big issue for renters. However, inflexibility – and the imbalance of contractual power between renter and landlord – is also a big problem. Around 15 per cent of North-Western renters revealed that they had been forced to turn down a job opportunity because of the terms of their tenancy. That’s 171,515 people in the North-West turning down jobs.

We hired a former Bank of England economist to crunch the numbers and ascertain the lost income of those tenants having to turn down new roles. His calculations showed that the average tenant is losing out on the new job bump of £1,012 per year because of this “tenancy trap”.

Looking at these figures, it becomes clearer why tenants are turning down opportunities. Fear of excessive costs is clearly a factor. Whilst it’s excellent news that the Tenancy Fees Act will reduce the considerable costs private tenants face when moving, tenants can still be liable for “reasonable costs” for “loss suffered” if they wish to terminate a tenancy early. What’s more, stumping up the cost of a new deposit – even without the additional tenancy fees – can still be costly. For the average earner, after tax that additional £1012 per year will come to about £800. The typical deposit required by a private landlord is 4-6 weeks’ rent, and based on average rental prices in the North West, that could come to between £524-£786. This could all but wipe out that post-tax new job bonus.


As both a tenant and a housing association landlord, these findings really hammered home the need for a new rental offer to me. It’s encouraging that the government is making legislative changes – from exploring scrapping ‘no-fault’ Section 21 evictions to getting rid of tenancy fees – but piecemeal change won’t be enough to deliver the homes and tenancies renters urgently need.

Successive governments’ failure to build enough homes has meant that a housing shortage has entrenched unaffordability in both the purchase and rental market. Only building more homes will turn this sorry state of affairs around. What’s more, it’s time for a serious conversation about what a decent tenancy looks like. At Your Housing Group we’ve been thinking hard about how a life-long “passporting” tenancy could allow our tenants to move with ease from property to property, upgrading and downsizing as their needs change; from the city to the suburbs to a shared community development in old age. We’d like to see more people given the option to enjoy a housing offer that meets their needs, not those of their landlord.

In order to deliver the homes – and tenancies – Britain’s renters need, housing associations must be given a more prominent role in providing homes to Britain’s renters – of every financial and social background. Housing associations are raring to build, and at Your Housing Group we’re working on a number of proposals that could see sustainable sources of finance such as pension funds investing in delivering homes all over the country.

Unless Britain gets building we’ll never tackle the housing crisis in the UK. We need more homes and a radically improved tenancy offer that meets renters’ needs. It’s high time the government ended our country’s reliance on volume builders and private landlords for housing delivery, and let housing associations take the reins.

We build quality, affordable rental and purchase homes, where they’re needed. Tenants are at the absolute heart of our vision. We know what renters want – and with the right money and powers, we can deliver it.

Brian Cronin is the chief executive of Your Housing Group, a housing association with more than 28,000 homes in the midlands and the north.

 
 
 
 

Segregated playgrounds are just the start: inequality is built into the fabric of our cities

Yet more luxury flats. Image: Getty.

Developers in London have come under scrutiny for segregating people who live in social or affordable housing from residents who pay market rates. Prominent cases have included children from social housing being blocked from using a playground in a new development, and “poor doors” providing separate entrances for social housing residents.

Of course, segregation has long been a reality in cities around the world. For example, gated communities have been documented in the US cities since the 1970s, while racially segregated urban areas existed in South Africa under apartheid. Research by myself and other academics has shown that urban spaces which divide and exclude society’s poorer or more vulnerable citizens are still expanding rapidly, even replacing public provision of facilities and services – such as parks and playgrounds – in cities around the world.

Gated developments in Gurgaon, India, have created a patchwork of privatised services; elite developments in Hanoi, Vietnam, offer rich residents cleaner air; and luxury condos in Toronto, Canada, displace local residents in favour of foreign investors. An extreme example is the Eko Atlantic project in Nigeria – a private city being built in Lagos, where the majority of other residents face extreme levels of deprivation and poverty.

A commodity, or a right?

Although these developments come with their own unique context and characteristics, they all have one thing in common: they effectively segregate city dwellers. By providing the sorts of facilities and services which would normally be run by public authorities, but reserving them exclusively for certain residents, such developments threaten the wider public’s access to green spaces, decent housing, playgrounds and even safe sewage systems.

Access to basic services, which was once considered to be the right of all citizens, is at risk of becoming a commodity. Privatisation may start with minor services such as the landscaping or upkeep of neighbourhoods: for example, the maintenance of some new-build estates in the UK are being left to developers in return for a service charge. This might seem insignificant, but it introduces an unregulated cost for the residents.

Privatising the provision of municipal services may be seen by some as a way for wealthier residents to enjoy a better standard of living – as in Hanoi. But in the worst cases, it puts in a paywall in front of fundamental services such as sewage disposal – as happened in Gurgaon. In other words, privatisation may start with insignificant services and expand to more fundamental ones, creating greater segregation and inequality in cities.


A divided city

My own research on branded housing projects in Turkey has highlighted the drastic consequences of the gradual expansion of exclusive services and facilities through segregated developments. These private housing developments – known for their extensive use of branding – have sprung up in Istanbul and other Turkish cities over the past two decades, since the government began to favour a more neoliberal approach.

By 2014, there were more than 800 branded housing projects in Istanbul alone. They vary in scale from a single high-rise building to developments aiming to accommodate more than 20,000 residents. Today, this development type can be seen in every city in Turkey, from small towns to the largest metropolitan areas.

The branded housing projects are segregated by design, often featuring a single tower or an enclosing cluster of buildings, as well as walls and fences. They provide an extensive array of services and facilities exclusively for their residents, including parks, playgrounds, sports pitches, health clinics and landscaping.

Making the same services and facilities available within each project effectively prevents interaction between residents and people living outside of their development. What’s more, these projects often exist in neighbourhoods which lack publicly accessible open spaces such as parks and playgrounds.

This is a city-wide problem in Istanbul since the amount of publicly accessible green spaces in Istanbul is as low as 2.2 per cent of the total urban area. In London, 33 per cent of the city’s area is made up of parks and gardens open to the public – which shows the severity of the problem in Istanbul.

These branded housing projects do not feature any affordable units or social housing, so there are no opportunities for less privileged city-dwellers to enjoy vital facilities such as green spaces. This has knock-on effects on excluded residents’ mental and physical health, contributing to greater inequality in these respects, too.

Emerging alternatives

To prevent increasing inequality, exclusion and segregation in cities, fundamental urban services must be maintained or improved and kept in public ownership and made accessible for every city-dweller. There are emerging alternatives that show ways to do this and challenge privatisation policies.

For example, in some cities, local governments have “remunicipalised” key services, bringing them back into public ownership. A report by Dutch think-tank the Transnational Institute identified 235 cases where water supplies were remunicipalised across 37 countries between 2000 and 2015. The water remunicipalisation tracker keeps track of successful examples of remunicipalisation cases around the world, as well as ongoing campaigns.

It is vitally important to keep urban services public and reverse subtle forms or privatisation by focusing on delivering a decent standard of living for all residents. Local authorities need to be committed to this goal – but they must also receive adequate funds from local taxes and central governments. Only then, will quality services be available to all people living in cities.

The Conversation

Bilge Serin, Research Associate, University of Glasgow.

This article is republished from The Conversation under a Creative Commons license. Read the original article.