Is this renting’s watershed moment?

The problems of "Generation Rent" seem finally to be getting some political attention, but without more homes being built, renting will continue to boil over.

In a week that a parliamentary inquiry begins into the state of private renting, and official statistics confirm the seismic growth of Generation Rent, it’s starting to look like rental Britain is beginning to get the political attention it deserves.

More than nine million people now rent from a private landlord. With hundreds of thousands priced out of home ownership and unable to access social housing, renting is fast becoming the new normal. And figures this week finally confirmed that for the first time since the 1960s, more people rent their homes from a private landlord than from a council or housing association. More and more of us now understand the frustration of paying hundreds of pounds each month in "dead money" to landlords, for a home that we can’t make our own.

Last week, Shelter’s Rent Trap report painted the latest bleak picture of life for Generation Rent. While wages stagnate, rents are up in 83 per cent of the country; on average, renters are paying out £300 more each year. In some areas, that rises to more than £1,000 a year – and that’s on top of rents that are already higher than mortgage costs.

This is the rent trap: people can’t afford to buy, so are stuck paying high rents, leaving them with little left over for anything else - half have less than £100 after rent and bills. This means they’re not able to save enough for a home of their own - leaving them facing yet another year of renting. As homes remain increasingly unaffordable, this trap sucks in ever more young people who know that the dream of a place of their own is slipping away.  

But the rent trap isn’t just a social issue; it’s an increasingly political one too. Renters are an ever-larger political constituency, with many closely resembling the archetypical middle income voter. And for voters in marginal constituencies, renting is a bigger issue than ever.

Our report found that the cost of renting has increased substantially in a number of key electoral battlegrounds – meaning that prospective MPs will need to become more familiar with the realities of renting if they want to win or keep these seats. Renters in Solihull - a Lib/Con marginal - are paying almost £400 a year more in rent; Lab/Con marginal Thurrock saw rents increase by almost £300; and three way marginal Hampstead and Kilburn rents are up by more than £800. The subject of the newest by-election tussle – Chris Huhne’s Eastleigh seat – saw rents rise by 3.2 per cent over the past year – more than twice as fast as wages. Some might say: does it matter if people rent? It’s commonplace in Germany, and people seem perfectly happy renting there. Should we be worried about this trend?

The trouble is that renting in England isn’t set up to play the kind of role that it plays in Germany and other developed countries. Renting was deregulated in 1989 to provide flexibility for a mobile workforce – the Assured Shorthold Tenancy was introduced and 6-12 month contracts became the norm. Politicians at the time envisaged lots of young people moving around for work before they settled down, bought a home and had kids.

But that’s not the role that renting is playing now. A major part of the growth of renting in recent years has been from families with children – some 1.3 million families now rent. For these families, renting isn’t working. They’ll typically have short contracts, after which they can be asked to leave for any reason, or their rent can be increased with no upper limit. That’s far from ideal when you’re feeling financially squeezed – or when your children are starting a new school year without being sure of where they’ll be living come the summer holidays.

For years, successive governments have tinkered around the edges on renting. Politicians recognise that most don’t want to rent for the long term, so have focused on helping people into homeownership: guaranteeing 95 per cent mortgages, expanding shared ownership schemes. But these schemes aren’t going far enough – and this leaves families stuck in rented homes with no reassurance from government that things will ever improve.

It seems that some politicians are beginning to wake up to the new reality of renting. Boris Johnson has said he intends to pilot longer tenancies in London, and Conservative newcomer Jake Berry has made the case for them too. Meanwhile, Ed Miliband and Labour’s Shadow Housing Minister, Jack Dromey, have spoken about more widespread measures to make longer term contracts the norm, and called an Opposition Day debate on the issue in January.

This week, a Select Committee began sitting for an inquiry into the private rented sector, and Shelter gave oral evidence on Monday, telling the stories of the thousands of people who come to us for help with renting problems.

In the short-term, government needs to tackle the reality of rental Britain, because every indication shows that it’s here to stay. We’ve proposed the Stable Rental Contract: a five-year tenancy with predictable rent increases, which will give renters the certainty they can keep their children in a local school and plan their finances, while also helping reduce the risk of empty periods for landlords.

It’s good news that politicians are beginning to up their game – but they have to translate words into action, as voters will hold them to account. The truth is that the efforts of successive governments have not gone far enough in helping people on ordinary incomes get a decent, stable, affordable home.

The government needs a much bolder plan of action for helping people achieve this basic aspiration. The bottleneck of supply and demand is worsening. Without more homes being built, renting will continue to boil over. Rents will continue to rise; people will struggle even harder to put money aside; the dream of a home of their own will continue to slip away.
 

More than nine million people now rent from a private landlord. Photograph: Getty Images

Robbie de Santos is a policy officer at Shelter.

Getty Images.
Show Hide image

How Theresa May is trying to trap her opponents over Brexit

An amendment calling on MPs to "respect" the referendum outcome is ammunition for the battles to come. 

Theresa May is making a habit of avoiding unnecessary defeats. In the Richmond Park by-election, where the Liberal Democrats triumphed, the Conservatives chose not to stand a candidate. In parliament, they today accepted a Labour motion calling on the government to publish a "plan for leaving the EU" before Article 50 is triggered. The Tories gave way after as many as 40 of their number threatened to vote with the opposition tomorrow. Labour's motion has no legal standing but May has avoided a symbolic defeat.

She has also done so at little cost. Labour's motion is sufficiently vague to allow the government to avoid publishing a full plan (and nothing close to a White Paper). Significantly, the Tories added an amendment stating that "this House will respect the wishes of the United Kingdom as expressed in the referendum on 23 June; and further calls on the Government to invoke Article 50 by 31 March 2017". 

For No.10, this is ammunition for the battles to come. If, as expected, the Supreme Court rules that parliament must vote on whether to trigger Article 50, Labour and others will table amendments to the resulting bill. Among other things, these would call for the government to seek full access to the single market. May, who has pledged to control EU immigration, has so far avoided this pledge. And with good reason. At the Christian Democrat conference in Germany today, Angela Merkel restated what has long been Europe's position: "We will not allow any cherry picking. The four basic freedoms must be safeguarded - freedom of movement for people, goods, services and financial market products. Only then can there be access to the single market."

There is no parliamentary majority for blocking Brexit (MPs will vote for Article 50 if the amendments fall). But there is one for single market membership. Remain supporters insist that the 23 June result imposed no conditions. But May, and most Leavers, assert that free movement must be controlled (as the Out campaign promised). 

At the moment of confrontation, the Conservatives will argue that respecting the result means not binding their hands. When MPs argue otherwise, expect them to point to tomorrow's vote. One senior Labour MP confessed that he would not vote for single market membership if it was framed as "disrespecting Brexit". The question for May is how many will prove more obstructive. 

George Eaton is political editor of the New Statesman.