Generation Rent

December 31, 2012 10:31 am

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A sad story appeared in my local papers a few weeks ago. A flat in central London was advertised to rent on Gumtree for £600 a month. In an area where it was estimated that a family would need a household income of £72,000 a year to rent a two bedroom flat, this £600 a month flat seemed too good to be true.

It seemed too good to be true because it was. A con-artist had duped up to 30 young flat hunters into paying him thousands of pounds as a deposit for a flat that was not available to rent. The young people turned up to move in, only to find themselves homeless. The conman escaped with around £40,000 of their money.

Incidents like this are in part made possible because the lack of sufficient regulation of the private rental sector. One in six households in the UK live in privately rented accommodation. This number has grown dramatically in recent years. Mortgages have become more difficult to access for first time buyers, and high rents and the squeeze on living standards makes it harder and harder to save to a deposit. Renting has become a way of life for millions.

Despite the emergence of “Generation Rent”, too little has been done to regulate the private rental sector and address many of the challenges renters face on a regular basis. This is anecdotal and unscientific, but just asking friends and colleagues I found, unsurprisingly, that everyone had their own stories of negative experiences of private renting to share.

People complained of rip-off letting agent charges, nosey landlords who kept turning up unannounced and having problems getting things fixed or adequately maintained. A number of people had problems getting landlords to fix broken showers, with one person living for months with no hot water, and another person regularly getting mild electric shocks from their electric shower. Another person, along with five of their friends, paid £1,500 each to a well known high street lettings agent for a deposit. She had booked time off work, had packed up her possessions and was about to move in when the letting agent called to tell her the flat had been let by another group who had offered to pay the landlord higher rent.

Some of the instances listed above do breach existing legislation and could be reported to organisations like Trading Standards. One problem is that many private tenants either do not know their rights or are not motivated to exercise them. Moving is stressful and costly, but is sometimes easier than continuing to live in an unsuitable flat overseen by an unresponsive or unscrupulous landlord or letting agent. Often tenants feel powerless to assert themselves.

I live in a flat owned by a notorious local landlord, who bragged on the BBC’s Secret History of our Streets that “if you have a cow, you milk it”. A group of tenants took exception his attitude to his responsibilities as a landlord. They tried to organise a campaign for better rights for local tenants. The landlord promptly served them with eviction notices.

Political parties have sometimes overlooked the issues facing private tenants, who tend not to have strong tenants or residents associations to speak up for them. Private tenants often belong to demographic groups that don’t vote in large numbers. They can also be harder to reach through traditional campaigning methods. Politicians focus their messages and policies on appealing to those most likely to vote. This may be partly why issues affecting tenants in the private rental sector has been consistently ignored by politicians of all parties.

Labour has the opportunity to show leadership and take the lead on tackling issues in the private rental sector. It is really encouraging to see Labour’s recently launched Your Britain website containing so many policy ideas around this. It very welcome to see Labour discussing the need to “tackling unscrupulous letting agents and ending rip-off charges and “providing stability and affordability for renters and families.”

For many Labour Party members, addressing the UK’s urgent housing crisis is a top priority for Labour’s Policy Review.  Your Britain contains some really positive and progressive policy ideas – logon to the website yourself and have your say.

  • Quiet_Sceptic

    Renting is a poor substitute for owning, reforms to better regulate the industry are long overdue but need to be accompanied by policies to increase house building so that more young people can afford to buy a home.

    • http://www.facebook.com/jim.crowder2 Jim Crowder

      Quite. If we have a surplus of housing, then purchase prices would be lower, and those who chose to rent would have a wider choice of landlords with lower rents.

      Difficult to argue with the suggestion that “If it sounds too good to be true, it probably is!”. Most of us have realised that we can’t afford to live in central London and have chosen not to.

  • aracataca

    This is OK but what if private landlords decide it is not worth renting their flats out because of excessive regulation- we then have a crisis – ee Rachmnan -1960s for reference. There is no substitute for a policy of simply building more houses.

    • http://www.facebook.com/profile.php?id=100001102865655 John Ruddy

      If private landlords do not rent out their properties, then they will be unable to pay the mortgages they have taken out on them in order to buy them. Their houses then get re-possessed, and re-sold.

      • Dave Postles

        Only if the banks foreclose.

      • aracataca

        We had rent controls in the 1960s they didn’t work well. There was no motivation whatsoever for landlords to carry out repairs to flats and houses occupied by protected tenants and while Rachman used violence to get protected tenants out, many other landlords just didn’t bother to carry out major repairs to crucial things like heating or damp. ( The State was largely powerless in this situation since it couldn’t lock every landlord up). Other landlords bought up properties and left them empty (partly because it was so hard to evict tenants) and notoriously the property speculator Harry Hyams bought the Centre Point building in Tottenham Court Road and left the entire edifice empty and waited for the market to drive its value upwards At least now the better the condition of the flat or house prior to renting will typically lead to a capacity to command a higher rent- with controls this motivation will disappear – it won’t matter if the house is falling down because rents will not be permitted to rise above a pre-determined level.
        Let’s just build more houses.

      • aracataca

        Just an afterthought John. If enough landlords leave enough properties empty (in London for example) even for a short period ( many landlords can take a short term hit especially if they prepare for it) then the supply shortage gets worse- leading to more homelessness, rising house prices,etc.

  • Dave Postles

    What about prospective tenants in receipt of Housing Benefit? Fewer and fewer lettings agents will now rent out to them. Where are they supposed to live? In the new Donkey Smith regime, their predicament will deteriorate further.

  • Monkey_Bach

    If the Tories strip housing benefit from the under 25s it will be less a case of “Generation Rent” and more like “Generation Rent Boys and Rent Girls”. Eeek.

    • Dave Postles

      Not least for those young people who have just been rescued from homelessness by organizations such as Centrepoint and YMCA Roomsponsor. Centrepoint and YMCA Roomsponsor can only provide that accommodation for a limited period (usually a couple of years). Where do those period then find accommodation in their early twenties? It looks like homelessness to homelessness in a few years unless benevolent landlords can be discovered.

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