3 in 10 renters can't afford to pay their rent. Few will get on the housing ladder. London's Mayor is getting serious about changing this.
The latest annual English Housing Survey came out on Wednesday, revealing that three in ten renters find it difficult to pay their rent. This means families are making choices between paying bills and mounting up debt – an unforgiveable situation in the 21st century.
Most of these renters are entitled to housing benefit, but, as the survey finds, of the 889,000 private renter households who receive it, the payment covers the full rent for only 110,000 of them. Many will be working but 473,000 are not in paid work so have to top up their rent with other benefits – and go hungry.
A generation ago, the Conservative government began selling off council housing and encouraging buy-to-let in its stead. Worries about market-driven rents were dismissed as housing benefit would “take the strain”. But as demand outstripped supply and housing benefit rose in line with rents, the Cameron government targeted it for cuts, and the link between rents and local housing allowance was broken. This week’s figures show how this growing shortfall is hurting millions of us.
Even for private renters who can cover their rent every month, the survey is clear how difficult it still is to put money aside for the future – 2.8m households – well over half of 4.5m in private rented homes – have no savings. Of those, half expect to buy a home, but if they’re to have any chance of this, rents have to come down dramatically before they can raise the deposit needed.
There are still about 1m private renters who expect to buy and have some savings – including 299,000 who have more than £16,000. But it’s clear that many private renters could only access home ownership if the Bank of Mum and Dad can help them out.
Those who don’t have well-off parents or a lucrative job face growing older in private rented homes. As well as the cost involved in that – to individuals and the state – there’s the insecurity associated with private rented homes. The EHS tells us that 12% of tenancies are ended by the landlord, 25% private rented homes are non-decent and 14% are simply unsafe.
We’re expecting the government to launch a consultation shortly on ending unfair evictions. As well as giving tenants stability, this has the potential to transform the quality of rented homes too. By removing the threat of retaliatory eviction, tenants would have more power to compel their landlord to fix disrepair. But we’d still be left with high rents.
Sadiq Khan has just published his ‘model tenancy‘ and, alongside it, the most ambitious proposals to intervene on rents we’ve had from an elected politician in a generation. London is being stifled by expensive rents – people are being priced out of the areas they grew up in, and PricewaterhouseCoopers this week highlighted the difficulties faced by public sector workers in the capital.
While we need to build to meet the demand for homes, it will take years for this to make a serious dent in market rents and for renters’ household finances to recover. Renters need relief now so politicians must consider short term solutions that can complement long term investment. Sadiq Khan recognises the urgency and ambition needed – we now need this across the political spectrum.
Dan Wilson Craw is the Director of Generation Rent.
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