LONDON, ENGLAND – OCTOBER 26: Letting signs are seen outside properties in Maida Vale on October 26, 2020 in London, England. As many young people renting rooms have left the capital due to the Coronavirus Pandemic, rents are dropping and in some places have fallen by a third. Aldgate has seen a 34% fall in price per room, whilst prices in Little Venice and Maida Vale dropped by 20%. The average rent drop for a room in London’s Zone one dropped by 11% in comparison to this time last year. (Photo by Peter Summers/Getty Images)
Renters need more rights, but scrapping minimum tenancy terms would leave landlords unable to stop their properties being used for holiday lets, party flats or worse, says Rick de Blaby
Let’s be really clear – residents who rent their homes deserve essential protections against exploitation.
An efficient, transparent and professional rental market should offer benefits for both investor and occupant, but the mismatch in supply and demand has, at the margins allowed poor landlord behaviour to flourish to the detriment of the quality of homes and the security and provision to which any paying resident is entitled.
But underlying many of the issues is the fundamental problem that the UK has failed to build enough new homes.
Rental homes have become an important part of the housing ecosystem. Importantly, the market not only serves those who are awaiting home ownership but also an increasingly broad demographic that value the lifestyle and flexibility that renting offers.
That growing demand means ever more homes are needed. In fact, Savills has estimated we need up to one million more new rental homes in the next seven years, requiring an investment of over £250bn, which realistically has to predominantly come from national and international institutional pension funds.
For both investors and consumers, regulation that is designed to protect the latter whilst ensuring that good players in the market have the ability to continue operating and growing, should be a positive. Balancing the interests of all parties is no simple feat, but when done right, such legislation enables a market that is far more effective and encourages, rather than stifles, investment.
It is therefore a welcome and long overdue step that the government has seen fit to bring forward legislation in the form of the Renters Reform Bill to tackle the short-term issues in the rental sector.
The longer-term problem, which is the underlying lack of supply, requires a bigger political vision for housing and all the related infrastructure with its interdependence on national growth and productivity, which sadly no political party has yet articulated.
Many elements of the Bill are positive and will support a more balanced market in a world where renters’ needs are too often ignored.
However, the concern of many in the industry is that some of the proposals seek quick-fixes without tackling the underlying causes; the risk being that another blunt tool is passed that gives rise to unintended consequences.
One example is the proposal to scrap minimum tenancy terms. This would provide residents with the ability to serve two months’ notice as early as the first day of their tenancy, having the potential to upset the balance in the market, leading to a spike in rental homes being used for the very short term.
Ultimately, there would have been very little responsible landlords could do to prevent homes being used as holiday lets, party flats, or worse, causing enormous disruption to those living nearby and upending stable communities.
It is therefore hugely encouraging to see that the Department for Levelling up, Housing and Communities (DLUHC) has put forward an amendment to the Bill, which receives its third reading in the Commons today, to prevent tenants ending contracts in a tenancy’s first six months.
This minimum six-month period will ensure that communities can thrive without constant churn and potential anti-social behaviour, whilst investors have greater clarity and certainty.
Ultimately, this change helps landlords and operators of rental schemes to establish happy and thriving communities and will in turn drive further investment and growth in a sector that sorely needs it.
As a leader of a business that has pioneered large-scale rental communities in the UK for a decade, we know our residents want to live in places in which they feel safe and secure, as well as connected to the people around them and their neighbourhood.
Renting is not simply a stopgap before people buy a home. For a growing number of people it is a lifestyle choice, and they shouldn’t have to compromise on the way they live because of that choice, be it the quality of the home or the community they become part of.
For most of our residents, renting is not a short-term decision and we find that 90 per cent of our residents choose to live with us for longer than 12 months.
A national poll conducted recently by Opinium also revealed that the average ideal tenancy lasts more than two years.
When asked how they would feel about the prospect of ever-changing neighbours, 50 per cent of the renters surveyed said they would not be comfortable with their neighbours changing every two months. And when it comes to the wider neighbourhood, feeling like there is a sense of community was important to 70 per cent of them.
11m tenants and 2.3m landlords across England will welcome legislation that drives up standards and protections for residents but also encourages investment to increase supply.
At a time when investment in the UK is low, productivity has stalled and businesses are competing for talent across the UK, the stakes in getting the right balance couldn’t be higher.
That is why once the amendments the government is making are passed, we now encourage Members of Parliament to support the Bill and its passage, so that we can all benefit from a better and more professional rental sector which delivers on the major investment the UK housing market desperately needs.
Rick de Blaby is chief executive of Get Living
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