With interest rates soaring, attention has rightly been drawn to the squeeze on mortgage-holders. But less has been said about the impact on the 4.4 million households in England who rent their homes privately. Almost a quarter of families with children now rent privately. Even before the cost of living crisis took hold, private renters had the highest housing costs of any tenure. And now, 1 in 7 private renters have had their rent raised within the space of just one month between September and October this year.
Recent media focus has revealed some of the appalling conditions experienced by people who live in social housing, with the tragic death of two-year-old Awaab Ishak as a result of respiratory condition caused by mould in a housing association flat a shocking reminder of the consequences of such negligence. It is worrying that the private rented sector, as well as being the most expensive housing tenure, is also the least regulated. It has the worst quality housing, with over 1 in 5 homes failing to meet the decent homes standard. Although the loss of social housing stock in recent decades means millions now rely on private landlords for their homes, the rights of private tenants can still more of less be summarised on the back of a postage stamp, despite relentless campaigning by housing charities.
Housing is one of the most important social determinants of health. Alongside physical factors like damp, mould, cold temperatures and overcrowding, research has found that private tenants’ wider experiences of housing precarity, and inability to fulfill the basic human need for a home that provides more than temporary shelter has a devastating effect on both physical and mental health. Tenants in the private rental sector show significantly higher levels of stress hormone CRP than both homeowners and those living in social housing, research by the universities of Bristol and Essex finds. The health impacts of poor-quality housing are estimated to cost the NHS over £1bn a year.
But what about the impact of the high cost of renting on the wider economy? The average single renter in the UK currently spends 38% of their income on rent, rising to 52% in London. The most recent data from the OECD shows that the UK has amongst the highest proportion of renters (23%) among developed countries who spend more than 40% of their income on housing costs. For households on low incomes, this proportion rises to half. Such high costs prevent households from spending on other essential and non-essential goods, which has a knock-on effect on growth. The higher your rent, the less money you have to spend on transport to get to a new job, goods and services in your local area, or clothes for your children. It makes your life more miserable, and limits your participation in the economy, at a time when across the political spectrum there is universal agreement that we desperately need economic growth. And as well as costing households, expensive housing costs the state dear: at a time when our public finances are in a ruinous state, the UK has the highest expenditure on housing benefit in the OECD (1.4% of GDP).
Many working on the fight for better housing breathed a sigh of relief when Michael Gove was reinstated as Secretary of State at the Department for Levelling Up, Housing and Communities (DLUHC). It was he who first tabled the Renters Reform Bill three years ago on the back of a manifesto pledge, although progress has been muted since then. The Bill introduces essential reforms for improving rights and conditions, including the removal of section 21 eviction notices which see tenants being evicted through no fault of their own, the removal of fixed term tenancies, limitations on rises in rent, and the introduction of a decent standard.
With Gove now reinstated and reaffirming his commitment to the agenda, there are faint signs of renewed momentum, although with a government fighting crises on all fronts, there is a risk that renters once again slip down the agenda. In the November Autumn Statement, help was announced for mortgage-holders struggling to make interest repayments, but there was nothing to help the UK’s 11 million private renters with their housing costs; many of whom will be facing sharp rent increases without recourse to challenge, and potential homelessness.
For these reasons it is imperative the Government commits to expediting the Renters Reform Bill in the immediate term. The freeze on housing benefit should also be lifted. In considering further immediate support measures, it should also look to Scotland as an example in introducing a Cost of Living Tenant Protection Bill, which sees a temporary freeze on in-tenancy rent increases and a temporary moratorium on evictions until at least 31 March 2023 with the possibility of this being extended. Such interventions have been called for by Mayor of London Sadiq Khan and other local leaders, who find themselves without policy levers in the face of a tidal wave of need as the crisis deepens.
If the government wants to get serious about levelling up the economy and protecting the most vulnerable through the cost of living crisis, it must recognise that access to decent, affordable housing is a fundamental building block for health, wellbeing and economic opportunity. A lack of rights in private rented housing leads to conditions which damage tenants’ physical and mental health; high rents eat up limited incomes, leading to an unacceptable assault on living standards. Not only does this entrench inequality, it robs people of the economic opportunities that so many people in stable, affordable housing take for granted. The Renters Reform Bill is the first step to overhauling the private rented sector and creating a housing market that works for everyone.