Is stable renting the future?
1 May 2014
This morning Ed Miliband announced that, if a Labour Government is elected in 2015, they will legislate to make long-term tenancies the legal default. This follows the Government’s promise last October to produce a model ‘Family Friendly Tenancy’ and to encourage stable renting through their ‘How to Rent’ guide.
Labour’s default offers longer tenancies that limit rental increases and retain flexibility for renters. This is what Shelter has been calling for since September 2012, which is why we hope the Government’s model will offer the same.
Benefits for landlords
This commitment to stable renting is not only a major turning point for England’s 9 million renters, it will also be welcomed by a growing number of landlords.
Stable renting has many benefits for landlords. In 2012 Shelter commissioned Jones Lang LaSalle to conduct a detailed analysis of landlords’ business models, which showed that longer tenancies could enhance landlords’ returns. Allowing renters to properly settle into their home will mean that they are more likely to stay, look after their property and keep paying the rent. The house becomes part of the local community and the likelihood of voids and re-letting costs are reduced.
Leading the way
The sector is frequently blighted by instability and poor practice. In response, a number of large landlords are recognising the value of offering something different. These landlords are setting themselves apart and reaching out to renters with the promise of better, more stable renting.
Get Living London, the major landlord letting homes in the Olympic Park in East London are offering three year tenancies with flexible two month break clauses for tenants. They specify that rents cannot rise above CPI inflation annually.
A number of Housing Associations are moving in to the private rental market. These associations are relishing the opportunity to provide socially responsible private renting.
In a recent Guardian interview the Chief Executive of Notting Hill Housing Trust Kate Davies commented that, in response to the growing number of families in ‘unsafe, frightening, dangerous’ private rented homes, she “… would like to be part of creating a private rented sector that has rents that are controlled so that they go up by CPI so they are effectively linked to wages.”
Genesis Housing Association are also setting themselves apart by offering tenancies of up to five years. Their slogan ‘renting shouldn’t mean packing every year’ taps into the deep longing for stability felt by many renters. Genesis give renters maximum flexibility and allow them to make their house a home; they have the freedom to decorate and make small adjustments.
Demand from renters
Last week on Mumsnet a discussion post led with the question ‘What do you think will happen about houses with the next generation?’. The post generated almost 700 responses, many of which were lamenting the instability of private renting.
“All we want, as a couple in our 30s, is a stable place to live that we can afford. If we could rent forever, but in a more ‘Continental’ way which means we could stay long-term and make the place our own, I’d be happy with that.”
Frustrated at “feeling that [they] are the least powerful in any negotiation” this young couple were desperate for things to change. A sentiment echoed by countless renters.
This post cuts straight to the heart of the problem. Our private rented sector is not fit for purpose; until it adapts to become somewhere that people can genuinely settle down it will never feel like a viable form of tenure. Yet, for many young families the private rented sector has become a permanent home. Politicians from all parties are waking finally up to this. They are grasping the urgent need to give more rights to renters and to correct our ‘short-term’ private rental market.
As with most things, the devil will be in the detail; any proposed penalties for landlords that might flout the rules of this new tenancy should be severe. Regardless of this, today’s announcement from Labour is welcome. It is a big step towards the private rented sector that England’s 9 million renters deserve.