The private rental sector has grown enormously in recent years and accounts for approximately 16.5% of all households, nearly 3.8 million homes in England alone and UK wide more than 9 million people are living in privately rented accommodation. There are more households renting privately than socially now, bringing up the overall numbers of households that rent to a third of all households. Rents in the private sector are on average more than twice as high as in the social housing sector.
Calls for better and more regulations have been around for years and anyone who has experience in renting privately knows exactly why. Fixed term tenancy agreements for 6 months or if you are lucky for 1 year or periodic tenancies don’t give anyone the security and ‘feel homely’ factor which is desired, especially once you have started a family. If you are renting a property for longer than a year your rent has probably gone up since you first moved in.
Regulations so far have focused on the landlords staying in control of their properties and help them recover their properties from defaulting tenants. The market however has changed since these regulations came into force with many many people in their twenties and thirties renting as they have not managed to step onto the property ladder during the last 15 years, for reasons which are well known – unaffordable house prices and difficulties in securing mortgages. In fact, more than half of all private tenants are younger than 35 years old. For that age group it has become somewhat ‘mainstream’ to rent rather than to buy and it is that generation who will start families and therefore needs more security and stability.
Probably with those voters in mind Ed Miliband has announced that a future Labour government would cap rent increases and introduce longer-term tenancies in an effort to increase stability for the UK’s private renters.
Currently there is a ‘Regulation of the Private Rented Sector Bill 2013-14’ in the process of being heard in parliament with its second reading due this month. This bill does not address the problems which come with short term tenancy agreements and only talks about ‘fair rents’, not about controlling rent rises like suggested by Miliband.
With a long term housing shortage on our hands, property prices on the up again and stricter lending criteria it has now become even more difficult to get onto the housing ladder. Therefore, demand for privately rented property is only expected to grow which will of course make rents also less affordable. Perhaps it is about time to raise the issue of limiting rent increases and introducing longer term tenancies as a default option and also to come up with policies which will balance the landlords needs with the tenants needs much better than it is currently the case.