Private rent reform: The key to more secure and affordable housing

The UK’s rental market is in crisis. Private renters in the UK are now spending, on average, 35% of their income on rent, with at least 1.6 million people faced with damp, mouldy, and barely functional housing. A lack of rental controls means that rent prices have now reached record highs, and according to research from Rightmove, the average rent outside London is now 11.8% higher than a year ago, with areas such as Manchester seeing the biggest hike, jumping by more than 20%.

The 1988 Housing Act removed rental controls, meaning that since then, there has been no legal restriction on how much a private landlord can charge. With the cost of living crisis bringing millions of people to the brink, many are now calling for tighter regulations around rent prices, rent freezes and more rights for renters.

Proposed legislation, such as the Renters’ Reform Bill, would go some way to addressing the various issues facing renters in the UK, however, it has been significantly delayed, and many argue that it doesn’t go far enough.

The Renters’ Reform Bill

Back in 2019, the Conservative Party pledged, as part of the wider Renters’ Reform Bill, to end “no-fault evictions,” permitted under Section 21 of the Housing Act 1998. Since that pledge, over 48,000 households have been put at risk of homelessness, a figure that is 19% higher than before the pandemic. As homeless charity Shelter has outlined, this piece of legislation has the power to transform the renting system for good, but the three-year delay means that many renters are still at risk and lack rigorous legal protections.

Some of the main areas of focus, aside from the removal of Section 21, include:

• The introduction of a landlord register,
• The creation of a renters ombudsman to help enforce renters’ rights. As per the creation of the ombudsman post, remedies will include mandatory apologies, an obligation to provide information and undertake remedial works,
• Binding decisions on the part of the ombudsman post, enforceable in courts,
• More powers afforded to councils, including new investigative powers and the ability to issue civil penalty notices,
• A proposal to make it illegal for landlords to refuse renters who receive benefits,
• No ban on pets
• The introduction of no more than one rent review per year, with a legal requirement that renters be given two months’ notice.
• The introduction of no-fixed term tenancies and the ability to give two months’ notice at any point during a tenancy.

The government has claimed that the legislation will create “a generational shift that will redress the balance between 4.4 million private rented tenants and landlords.” However, it looks like renters will have to wait even longer, with Michael Gove, the Secretary of State for Levelling Up, Housing and Communities, admitting that protections for renters won’t come in until 2023.

Rent freeze

Although the Renters’ Reform Bill will undoubtedly bring positive changes for renters in the UK, it does little to address the unchecked, continued increase in private rental prices, which is forcing people out of their homes and onto the streets. The Green Party, which is in strong support of introducing an immediate cap on rent rises to tackle this issue, as well as a ban on no-fault eviction notices, which it said have increased by 76%. The data from the Ministry of Housing, Communities and Local Government shows that currently, 5,940 households in England are at risk of eviction after being given a Section 21 eviction notice between April and June – up from 3,380 in the same period in 2021.

Speaking about the desperate situation so many people are facing in the UK, Carla Denyer, co-leader of the Green Party of England and Wales, said: “Rising private rents and increasing evictions have also been cited as major causes of a dramatic increase in homelessness in London and other cities. The number of people sleeping rough on the capital’s streets has jumped by a shocking 24% in the past year. We are calling on the government to introduce an immediate freeze on rent rises and a ban on evictions by landlords who simply want to increase rents between tenancies.”

Denyer referenced the recent legislation brought in by the Scottish government to safeguard tenants this winter; a temporary rent freeze and an eviction ban until March to provide those who are struggling with respite. She went on to call for the housing minister to introduce similar measures in England and for the Senedd to “use its devolved powers to do so in Wales.”

In an outcry at the government’s inaction, there have been a number of protests across the country, with tenant unions leading the way. At the beginning of December, protests took place in Manchester and six London boroughs calling for a rent freeze to be introduced. Rebekah Hesse-Clark from the London Renters Union (LRU), one of the bodies fighting for change regarding rent prices, said: “Landlords and estate agents like Foxtons are using the current economic crisis to artificially increase rents and boost profits. The rent rises being pushed through are unfair and unjustifiable.” The union called landlords “out of control,” and demanded that politicians take notice.

Rental control consultation

As unions across the country call out for a rent freeze, in Bristol, there is an ongoing consultation regarding rental control to limit the amount of money landlords can charge tenants. In the city, over the last ten years, average rents in Bristol skyrocketed by 52%; during the same period, wages only increased by 24%.

Bristol City Council and The Living Rent Commission launched the consultation in June 2022 to gather reflections from the public about possible rental controls in the area and make recommendations on possible rent stabilisation powers. Formed of sector experts, tenants, landlords and academics, the consultation ran until 29 December, with some of the areas open to consultation including: capping rents across the whole of Bristol or parts of the city, introducing temporary/long-term rent controls and one-off increases if the landlord pays to improve their property.

It is also important to note that, at this time, Bristol City Council does not have the legal power to introduce these kinds of rental controls, City Hall chiefs are lobbying the government to change the law. Speaking about this, Councillor Tom Renhard, cabinet member for housing, said: “The powers needed to ensure the rental market is accessible and works for all do not exist. The powers come from the government, so we want to work with Westminster on policy development to reform the private rented sector, enabling Bristol to become a Living Rent City.”

That said, while some praised the consultation, it has not been without controversy. Some argue that despite the consultation being set up to discuss the challenges faced by those in crisis, the rent commission itself was whitewashed. ACORN, a community-based union, for example, claims it was excluded, with the commission instead platforming the region’s two major landlords’ federations, ARLA and ALL Wessex. As Bristol’s largest housing organisation representing renters in the city, the organisation said that its exclusion showed the council to be “wilfully silencing the voices of thousands of renters across the city.”

In response to being asked if the government would consider introducing rent controls, a Department for Levelling Up, Housing and Communities spokesperson, said: “We understand the cost of living pressures that households are facing, however evidence suggests rent controls in the private rented sector do not work.” Likewise, in November, Felicity Buchan, Under Secretary of State for the Department of Levelling Up, Housing and Communities, said rental controls led to “disinvestment in the sector,” outlining that the government does not support them.

The commission’s report will be published in early 2023, acting as Bristol’s response to the Renter’s Reform white paper.

In the current crisis, swift action is required by the government to safeguard those across the UK being faced with poor housing conditions, skyrocketing rent and homelessness. The government’s inaction will have real and devastating effects on thousands of people, and it cannot afford to delay further.