Do renters in the UK get a raw deal?
A new report from the Social Market Foundation (SMF) think tank says England and Wales have one of the least-regulated rental markets in the Western world between them, with tenants paying the price through high rents and a high risk of eviction.
Added to this, the Resolution Foundation says housing in the UK is the worst value for money anywhere in the developed world, with tenants and homeowners alike paying more for older, smaller homes.
But private rented sector bodies have hit back, saying more regulation and taxation of landlords will lead to higher rents and lower supply.
Tenant satisfaction remains high
Despite these reports, tenants seem happy with their rented homes. A recent survey by mortgage lenders Aldermore found that 69% of tenants have a good relationship with their landlord. And in fact, the SMF’s own study also found high levels of tenant satisfaction: 81% of tenants were happy with their current home, and 85% were happy with their landlord.
But both surveys also found pain points. According to Aldermore, 74% of tenants took longer than they expected to find a property, and 68% ended up paying more than they planned. And while the SMF survey found high satisfaction with renting today, fewer tenants liked the idea of renting permanently.
A PRS that works for everyone?
The SMF’s proposed solutions are unlikely to please private housing providers. The report calls for a stronger system for disputing rent increases, followed by rent controls if that doesn’t help – although it recognises that overdoing it could cause landlords to quit. Additionally, it wants the government to ban Section 21 evictions and streamline dispute resolution and redress into a single body.
Both the SMF and the Resolution Foundation say it’s unlikely that landlords will quit if overregulated, despite warnings from private rented sector organisations. The SMF says there is no evidence to show that tougher regulations in Scotland, for example, reduced housing supply. Meanwhile, the Resolution Foundation said no more than 1% of landlords had quit the sector due to rising interest rates and other costs – and dismissed reports saying otherwise as “scare stories”.
But fighting shrinkage isn’t the PRS’s only objective – it needs to grow, in fact, to keep up with rising demand. The UK population is expected to reach 70 million by 2026. And as both think tanks admit, more tenants will live in privately rented housing for longer as homeownership gets more expensive. Politicians and think tanks looking for solutions to PRS issues will need to think about how to promote more investment as well as protecting tenants.
Other tenant headlines
Tenants buddy up with friends to reduce costs of renting – Landlord Today
Fake tenancies at heart of Bulgarian gang’s £53 million scam – LandlordZONE
One in five tenants spend over HALF their salary on rent – This Is Money
