An in-depth report, authored by Jamie Gollings and Niamh O Regan, entitled, ‘Let down: Rental regulations, subsidies and tenants’ rights across the English-speaking world’ has been published by the Social Market Foundation.
Gollings is deputy research director at the Foundation and Regan is a member of the SMF research team. The Foundation’s main activity is to commission and publish original papers by independent academics and other experts on key topics in the economic and social fields, with a view to stimulating public discussion on the performance of markets and the social framework within which they operate.
The foreword to the report is written by Dan Wilson-Craw, the deputy chief executive of Generation Rent. He says, in part:
“Renting used to be what students and young adults new to a city did. For many people over the age of 50, including many of our elected representatives, this is their only experience of renting. Living in a mouldy dump with a cantankerous landlord has long been seen in the public imagination as a rite of passage before you buy somewhere a few years into your career.
“But over the past 20 years renting has become a much bigger part of our lives and old attitudes no longer apply. With the decline of council housing, and house prices so high in prosperous cities only people with family wealth can buy, one in five of us now rents from a private landlord.
“…private rented homes are more likely than other tenures to contain hazards to the tenants’ health, and thousands of families face homelessness every month because their landlord wants to sell or re-let the property.
“…the General Election is a valuable opportunity to take a step back and consider how other countries manage their rental sectors.
“England is something of an outlier in how it treats renters and if we want to be bolder in our solutions it pays to learn lessons from our neighbours. The authors of this report have made an essential and timely contribution to the debate.”
The UK’s private rental sector has grown since the 1990s, but the report says long term renting is still not an attractive option for many due to high costs and limited renters’ rights. The report looks at the rental markets in the UK and other countries, and has arrived at a number of key conclusions.
The private rented sector contracted from the 1920s to the early 1990s, but has since grown, doubling from less than one in ten households in 1990 to just under one in five today.
Most renters would like to move into homeownership, but the age at which people buy their homes, if they do so, has risen, and so people are staying in the private rented sector for longer.
There is a need to acknowledge that long-term renting is here to stay, and that the renter experience needs to improve.
Apart from English-speaking countries, others such as Denmark, the Netherlands and Germany, with greater experience of a large private rented sector, can also provide valuable lessons in how renting for the longer term can be done.
Regulations like rent controls can help renters, but are tricky to calibrate to avoid unintended consequences. A broad analysis of controls in Europe indicates that controls do not hold back the growth of the sector. Places with rent controls do not necessarily have lower rents as a share of income, but changes in this ratio are more stable. Countries with rent controls also have had a faster growing private rental sector in the decade to 2022, than countries without controls.
Stronger renter protections do not seem to have a negative effect on supply. Despite concerns that greater protections for renters, particularly abolishing no-fault evictions, will have a negative effect on supply – there is limited evidence to support such concerns, and where the data does exist, it generally indicates that protections have little effect on supply.
The report makes a number of recommendations, some of which are
Use the planned ‘Private Rented Sector Database’ [a provision in the Renters Reform Bill] to understand the rental market better.
Make renting genuinely affordable for the long term.
Streamline dispute resolution to a single body.
Abolish section 21 evictions.
