Private renting in England has grown dramatically in recent years, now accounting for 17 per cent of all households. Ben Pattison argues that housing policy has been slow to respond, and that the government should consider the sensible recommendations of a recent select committee report.
‘Generation Rent’ seems to be increasingly difficult to ignore. Before the global financial crisis we used to have Phil and Kirsty from Location, Location, Location looking for the perfect house in the perfect place. Now we have Cherry Healey’s Property Virgins looking to find anything they can afford. The recent growth of the private rented sector seems to have reached the national consciousness. Recently, the communities and local government select committee has published a major new report looking at how we can respond to this trend.
The growth of private renting in England is not a recent phenomenon. After seventy years of decline private renting began to stabilise in the 1980s and grew slowly during the 1990s. Then from around 2001 onwards it began to grow rapidly, almost doubling in size in a decade. Private renting now accounts for 17 per cent of households and has just overtaken social housing.
Figure 1: Households in the private rented sector, England, 1990 to 2011/12
Source: Department for Communities and Local Government (2013) English Housing Survey: Headline Report
Housing policy has been slow to respond to this major change. The previous Labour government commissioned the Rugg and Rhodes review of private renting but never implemented the substantive recommendations. Since coming to power, the coalition government has been positive about the growth of private renting. Recently, the housing minister stated that “we want a bigger and better private rented sector”. The government has expressed its satisfaction with the regulatory framework for private renting. Instead, they are seeking to improve quality by committing £1 billion in guarantees to encourage investment in the sector from institutions such as pension funds. In contrast, the government is committing just £3 million to tackling ‘rogue landlords’.
The devolved administrations in Scotland and Wales are using their powers to take a much more active approach to managing private renting. A new strategy for the private rented sector in Scotland was launched in May and it included plans to strengthen landlord registration. The Welsh government is consulting on the introduction of a new legal framework for all rented accommodation.
This is the context for a major report from the communities and local government select committee on private renting in England. It outlines a set of proposals that would represent a much more active approach to managing the sector than is currently the case in England. The select committee favours a localist approach as a means to respond to the diversity of the private renting. The range of households accommodated by the sector is increasing and there is considerable geographic variation. For example, in some areas the growth in private renting is dominated by students whilst in other areas it is families that predominate. Each different group will have different needs and experience different problems with private renting.
Local authorities are at the heart of the select committee’s proposals. It is suggested that local authorities should be given greater powers to implement landlord licensing and generate revenue to enforce standards. Other measures being recommended include greater regulation of letting agents with a particular emphasis on removing unfair fees. Possibly the most substantive recommendation is that the government should introduce “a much simpler, more straightforward regulatory framework”. Finally, the committee assess the relationship between private renting and the on-going crisis in housing supply.
The growth of private renting in England can no longer be ignored. It is time for the government to carefully consider this sensible set of proposals from the select committee to ensure that the private rented sector provides decent accommodation for a growing number of tenants.
Note: This article gives the views of the author, and not the position of the British Politics and Policy blog, nor of the London School of Economics. Please read our comments policy before posting.
Ben Pattison is a postgraduate researcher at the University of Birmingham investigating the private rented sector in England. He is part of the Centre for Households Assets and Savings Management (CHASM) and the Housing and Communities Research Network at the University. He previously worked for five years as a researcher for the Building and Social Housing Foundation on a range of topics including Housing Benefit, increasing new housing supply and accommodation for marginalised groups.
First class contribution from Ben Pattison, and welcome to our still small but growing band calling for UK and devolved Administrations housing policy on the private rented sector (PRS) to be reformed and modernised. That has to start with recognition (indictment?) of what UK housing policy makers and their advisers have been doing.
An unfortunate reality that for most of the UK’s modern housing history the greatest numbers of the very worst housing conditions were to be found in the PRS. Attempts at rent control in the late 1950s had the unintended consequence of slum landlordism and racketeering personified in the notorious personality of Rachman.
The misfortune is that post mid-20th century successive (Conservative) Governments have treated the PRS as some sort of totem for capitalism and attacks about the local state (in the form of local authority housing) – hence costly, irresponsible and unsustainable ‘initiatives such as Business Expansion property lettings companies and Buy to Let landlordism. More recently, there is the fiscally irresponsible and nakedly populist ‘Help to Buy’ (which is also seemingly available to Buy to Let landlords who wish to expand their portfolio, part-courtesy of the British taxpayer).
We are, nevertheless, at the stage where there is an increasing body of evidence ond persuasion on the need for more rational, evidence based, tenure-neutral policy making across the UK. Some of that evidence is cited in this blogpiece. The cross-sector nature of the body of evidence is, however, further demonstrated by citing the likes of the 2013 papers from RICS (Housing Commission Report) and ACE (Housing Gap…), and the continuing work from the likes of the Resolution Foundation (‘Generation Rent’). Even the right-wing free-market think tank the Adam Smith Institute has issued a ‘wake up call’ to UK politicians and their obsessing with the myth of ‘affordable’ home ownership for the masses. There is also an implanted, almost unanimous, consensus that the UK can ‘no longer afford’ a mainstream public funded rented housing sector (but not wholly unanimous in-that many of us do not support it, but have to pragmatically accept it is the dominant ‘idea’ of the moment).
A common thread throughout all of this body of work is the need for an up-scaled, reputable, appropriately regulated PRS. That would have to be a PRS populated by reputable (preferably large) private landlords alongside social landlords, and invested in by the major private funding institutions. The Germans and Dutch, for example, can manage it, I believe that even some States in the free-market USA can do it – the UK can, therefore, surely progress towards such a system.