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.