We need rent capping

Housing insecurity has a profound effect on every aspect of our society, increased anxiety of the workforce in the workplace, a derogatory impact on people’s mental health, instability for children and young people, a rising housing benefit bill, less money in people’s pockets to spend within their local economies. It’s very clear the Government needs to introduce regulators to ensure rental properties are of a good standard; to increase length of tenure; and most importantly of all, introduce a rent cap so that rents are affordable relative to the median average income of the local community.

As John Healey, Shadow Secretary for Housing, says, “£2.3bn a year – around £1 in every £10 spent on housing benefit – is going to private landlords renting out sub-standard homes.

The figures, drawn from the official English Housing Survey, show the scale of public subsidy for private landlords whose homes are classed as of a ‘non-decent’ standard – containing a serious hazard, or in a poor state of repair.”

In his blog published on 23 January 2017, Healey goes on to point out that “the number of households renting privately has grown by nearly a million since 2010.”

There has been a rise in the number of people aged between 25 and 54 in private rents between 1994 and 2015 according to Office for National Statistics (ONS) English Housing Survey Private Rented Sector Report, 2014-15. However, this trend is reversed for young people below the age of 25, suggesting that young people are living in their parental homes for longer most probably because they can’t afford to rent.

Private renters also face severe housing insecurity. About 30% of them on average have a tenancy for less than a year.

English_Housing_Survey_Private_Rented_Sector_Report_2014-15.jpg

Couple this with findings according to the ONS publication, Comparing measures of private rental growth in the UK: 2016, private renters on average also experience rapidly rising rent when there tenancy ends and they have to find a new rental property. When a landlord has a new let they tend to raise the rent.

The ONS measure rental price rises using the Index of Private Housing Rental Prices (IPHRP). When collecting data about rental income from housing agents, “almost all of the private sector measures primarily focus on newly let properties. [however] There is evidence that the greatest price rises occur when properties are newly let, that is, when new tenants move into a property.”

“Data from Countrywide in Figure 2 shows that newly let properties tend to have both higher and more volatile growth patterns compared with its “occupied lets” series.”

Figure 2: Countrywide new lets and occupied lets percentage change over 12 months, January 2013 to September 2016

12-month percentage change

Figure_2-_Countrywide_new_lets_and_occupied_lets_percentage_change_over_12_months__January_2013_to_September_2016_(1).png

Housing insecurity has a profound effect on every aspect of our society, increased anxiety of the workforce in the workplace, a derogatory impact on people’s mental health, instability for children and young people, a rising housing benefit bill, less money in people’s pockets to spend within their local economies. It’s very clear the Government needs to introduce regulators to ensure rental properties are of a good standard; to increase length of tenure; and most importantly of all, introduce a rent cap so that rents are affordable relative to the median average income of the local community.

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