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Working from home or living at work?

On March 23rd, 2020 UK was formally placed into lockdown. Those who were not key workers were asked to not work or to work from home. This meant the decades-old tradition of working professionals putting on suits and commuting into work to go into an office and sit at a desk for several hours a day ended. Abruptly.

At first, some rejoiced at this news. We all learned about the intricacies between Zoom and Microsoft Teams and most of us became pop-quiz experts. The concept of moving from your home to go miles away to do the same thing you could do from your couch seemed insane. Most of us also found that we work better in pyjamas and are never late when our bed is also our office. Long live the “Boffice” we cried!

However, as time went on, difficulties emerged for the working poor. Those who could leave their cramped city flat and run away to a big house in the country did. Oxford University found that during lockdown over 250,000 people left London to go to live elsewhere, many whom were under 30. Those who could upgrade their Wi-Fi did. Those who could create an “office” like environment with comfy chairs, a working desk, and several monitors, did. Those who could not – struggled.

Many young people realised that no garden, no living room, and several people using the same kitchen and bathroom were acceptable before Covid-19, but not during lockdown. Landlords profiteering from turning that pesky living room into a third, fourth or even fifth bedroom in a House of Multiple Occupancy were making homes unliveable in lockdown. After a few weeks – the “Boffice” was not as great as we thought it was. People were not working from home. They were living at work.

The property developer Pocket Living found that 37% of those in London who were living in shared accommodation, were living and working in their bedrooms during the lockdown. Many reported that this was affecting their mental and physical health.

Participants reported issues like “noise, lack of work surfaces, and privacy” that severely affected their ability to work. Of those asked, 46% of participants reported not having a suitable place to work. Now, after the first lockdown and as a result of these changes, the Independent reported that 70% of young people are feeling more anxious about the future as a result of the Covid-19 pandemic.

This year might be the first time that young people move out of London and other city centres on masse – or do not actually move there in the first place. At the beginning of the year, it was predicted that the number of young people living in their own private rented sector (PRS) was going to rise by over 1.3 million. Now, I would not be so sure.

But fear not landlords – help is at hand. A landlord’s best bet lies in effectively extending regulation of the minimum shared space required for houses in multiple occupation (HMO). Regulation should enhance the need for shared living spaces. Young renters need to have space in order to live and work in separate and private areas. Ensuring shared living spaces are available would provide the stability and space young people need to be efficient and productive at work.

By creating living spaces that are living and working friendly – landlords will ensure that they can keep their tenants in good mental and emotional health, and ensure their properties are occupied. It is not a huge amount of effort – but it will be well received by tenants thrice over. As young people find themselves in a new working environments and central offices become a thing of the past – landlords should act now to ensure a good relationship with their tenants for the future and the “New Normal”.

Additionally, for those unlucky enough to be on the ever-growing list of industries impacted by Covid-19 and find themselves now on furlough or in a tough job market, landlords should allow late or partial rent payments. The stress of renting as a young person is high enough, and a little flexibility from landlords would go a long way.

The “New Normal” does not have to be all bad for young renters. Instead – tenants and landlords must act together to ensure better working and living conditions. There should always be a difference between working from home and living at work and with a little communication and adjustment, better housing is possible.

<strong><span class="has-inline-color has-accent-color">Cathleen Clarke</span></strong>
Cathleen Clarke

Cathleen Clarke is a youth campaigner and Labour Party activist. She is currently running for Chair of Young Labour and works for a migrants’ rights charity.

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Time is running out for renters

At the eleventh hour, late on a Friday afternoon, the Government finally decided to stop ploughing ahead with reopening eviction cases in the courts on 24 August.

This news came as a relief to the many thousands of renters struggling to pay their rent due to the economic shock of Covid-19. However, a stay on evictions keep renters safe for now but it is just a sticking plaster. It is time the Government dealt with root cause and took action to end the rent debt crisis.

Even before the pandemic hit, two million households in the private rented sector were struggling to pay their rent – paying a staggering 40% of their income to private landlords on average. 

Already stretched thin and with no savings to fall back on, private renters now find themselves without work or at risk of losing their job. 

Having to rely on the welfare system, many for the first time, renters wait anxiously for money to arrive and are devasted when the housing allowance, even with the recent Government increase, nowhere near covers the rent they owe.

New research by Generation Rent found that just 12% of those who applied for benefits after lockdown have been able to cover their rent – meaning hundreds and thousands of renters have been forced to rely solely on their landlord’s goodwill.

With unemployment rising, the furlough scheme coming to an end, and an endless wait for an inadequate benefit payment, thousands of renters are at serious risk of losing their homes.

Renters like Elizabeth, Tim, Roy, Laura and Chrissie:

Elizabeth: ‘Our three-year contract is up. We informed our landlady we weren’t able to pay full due to cuts in our salaries due to Covid19. The landlady agreed – then the landlady gave us Section 21 eviction notice.’

Tim: ‘Covid 19 has meant that income has dried up. My landlord wouldn’t or hasn’t taken the three month mortgage payment holiday. I am 3+ months behind with my rent and frightened about receiving a Section 8 eviction notice from my landlord.’

Roy: ‘My landlord has been texting me once a month since this (pandemic) started telling me I’m going to be “out on my ear” if I don’t pay, trying to increase the rent while my income has halved and my savings are dwindling, I’m terrified for my children’s future.’

Laura: ‘I’ve been furloughed and the money hasn’t been coming in until the middle of the month so I’ve been unable to pay the rent on time. I haven’t slept I’ve been ill anxiety and depression levels have gone up.’

Chrissie: ‘We explained that we hadn’t been able to work for 3 months and we’ve rented for just under 30 years. The landlords agent said ‘well you know what to do, give the keys back if you can’t pay’. We’re not eligible for benefits as we own a retirement property abroad. We are both over 60.’

These stories break my heart. Sadly, Elizabeth, Tim, Roy, Laura and Chrissie are not alone. Their stories are just a snapshot of the renter experience Generation Rent hears every day.

Many have lived in their properties for years. They have children at local schools but now find themselves priced out of the area they call home. Some are behind with rent and others haven’t even been given a reason; their landlord has simply issued a ‘no fault’ eviction notice and asked them to leave.

Our research, carried out just a few weeks ago, has shown 1 in 5 private renters who has struggled to pay rent during the pandemic has already been told to move out, been given a rent increase or been threatened with eviction. Nearly half of struggling tenants were found to be already searching for a new home, with 59 per cent unable to find one they can afford or a landlord who will accept them – meaning homelessness will be the only option for renters as they find themselves with nowhere else to go.

Time is running out for renters.

In March, Robert Jenrick promised to keep renters hit by Covid-29 in their homes. He has to deliver on this promise. He has to put in place a permanent solution to alleviate the coronavirus rent debt crisis being faced by hundreds of thousands of renters. 

With Parliament back from the summer recess, Generation Rent are more determined than ever to help renters saddled with rent debt. 

That’s why we’re campaigning for an end to the rent debt crisis through lifting the benefit cap and increasing benefits to cover average rents, no rent increases until March 2021, and make grants available to cover the rent of the most financially vulnerable through our Coronavirus Home Retention Scheme.

We want to see an end to coronavirus evictions through emergency legislation to prevent ‘no fault’ evictions and evictions for rent arrears. This will ensure renters who have been hit by the pandemic do not lose their homes through no fault of their own.

And we want to see a permanent end to Section 21. Evictions for no reason were a leading cause of homelessness before the pandemic. Section 21 eviction notices are in frequent use and the pandemic has highlighted that the law is not fit for purpose. The Government has pledged to end ‘no fault’ evictions, and now is the time for it to honour this pledge. 

Without a permanent solution to the rent debt crisis and evictions due to Covid-19 thousands of renters are at serious risk of losing their homes when the ban ends.

Generation Rent will be doing all it can to stop private renters tipping over the edge into homelessness.  Homelessness destroys lives. Help us end the rent debt crisis – sign up at GenerationRent.org

<span class="has-inline-color has-accent-color"><strong>Alicia Kennedy</strong></span>
Alicia Kennedy

A leader in strategic planning and campaign organisation, Alicia has had a 25-year career operating at the highest level of national politics.

She worked with Prime Ministers, Cabinet members, hundreds of MPs, and thousands of Councillors and volunteers to deliver successful local and national election campaigns for the Labour Party. She was made a life peer in 2012 and is non-aligned.

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Rescuing the Affordable Housing Commission Report from the chaos of Covid-19

It is the misfortune of the Affordable Housing Commission to release their report in March 2020, just as Covid -19 took hold. Not only did the report get buried by more pressing news, but the Commission also had to rush out a Covid-19 supplemental report in July 2020.

We need to rescue the report because it offers a great analysis of the housing crisis and realistic policy proposals. This is exactly what you would expect from a Commission headed by Lord Best, one of the sharpest minds in UK housing and supported by the left leaning Smith Institute.

The main argument is the last 20 years has seen the continuing decline of social rent housing, and the doubling in size of the Private Rented Sector (PRS) up to 22% of current housing. There are now 1.5m private landlords. Whilst, the social rent sector has continued to decline. The problem is that people who need the security of social rent sector face the insecurity of the PRS. Those on a low and insecure income, elderly, the ill and those with children should not be living in a sector where you can be required to leave with just a couple of months’ notice. For instance, a quarter all households with children now live in the PRS compared to 8% in 2004.  People are staying longer in the PRS, often into old age. The Commission describes this as a ticking time bomb, as an increasing number of older private renters will find that they can no longer pay the rent when they retire.

The commission found that 23% of private renters are paying more than 40% of their income on rent, which is creating poverty. A Nationwide Foundation survey in 2019 found that a third of private renters had less than £39 per week to live on after they had paid essential bills.

In London the difference between social rent and private rents is the greatest, driving many below medium income into poverty. In the area of Bermondsey, south London where I work 50% of ex –council homes are now rented out, with private renters paying nearly four times more than their council neighbours and having to find a deposit of around £2,000.

The other effect of high rents is that it stops renters from building up the funds to escape into owner occupation. Bob Colenutt estimates a third of people born in the 1980’s and 1990’s will never be able to afford to buy their own home (Colenutt 2020). The average deposit needed by a first time buyer is London was a staggering £146,757 in 2019. Also the Commission highlights that the explosion of Buy to Rent mortgages has helped to force up house prices. Even George Osborne, the most political of Chancellors, recognised the need to slightly dampen down the increase in Buy to Let.

Within social housing, there has been a trend towards higher rent ‘affordable’ homes, rather than genuinely affordable social rents. Higher rents are seen as the way of spreading government money more thinly and building more ‘sub-market’ homes. Government subsidy has dropped by a third since 2010 and housing associations have moved 100,000 properties from social rents to higher affordable rents. The problem, as noted by the Commission, is that for low earners higher rents mean more poverty.

The Commission argues for a re-balancing of the housing market by increasing social rent housing, to provide an alternative for those for whom PRS is unsuitable. The Commission accepts that it will take 25 years to rebalance, and proposes that we start now so that a child born today should be able to live in an affordable home when they are 25 and want to live independently.

To achieve this, 90,000 new social rent and 55,000 shared ownership/ intermediate rent homes are needed each year to address the overall shortage of 3.1m social rent homes identified by Shelter

This will require an increase in government expenditure from 1.9% to 3%, which is £12.8 billion per year. To put this into context the housing benefit bill was £25 billion in 2016 and £1 billion was spent on poor quality temporary accommodation for homeless people in 2019, but neither expenditure resulted in any new homes. The cost of Help to Buy, aimed at helping first time buyers, was £10 billion in 2013 and there is a debate about whether the scheme added to supply or merely forced house prices up.

The Commission does argue for PRS rent caps, the end of Section 21 evictions and a landlord registration scheme to give some protection to those remaining in the private rented sector.

The Commission also calls for local authorities to be given discretion over the selling of their council homes, in the context of the intensity of housing need in their area.  

In a Zoom meeting with LHG members, Thangam Debbonaire, Shadow Secretary of State for Housing, was clear that this is too early in this Parliament to make spending commitments, especially as the full effects of the Covid-19 recession are not known. However, this report seems to set out a good general direction of travel.

<strong><span class="has-inline-color has-accent-color">Andy Bates</span></strong>
Andy Bates

Andy is on the Executive Committee of the Labour Housing Group and is a member of Old Southwark and Bermondsey CLP.

His is an advocate of residents collectively managing their own homes. Andy is a JMB Manager at the Leathermarket JMB. Southwark’s largest resident-managed housing organisation covering over 1,500 homes.

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Out of area placement incentives need to stop

England’s housing system is broken, and the out of area placement process could not make it more obvious. Out of area placements are used by local authorities across the country in order to address the ever growing demands for housing. Council’s often failing to find a local solution, will offer individuals the opportunity of accommodation outside of their hometowns.

Generally, authorities will use this option to source temporary accommodation opportunities, which are meant to provide short –term housing, but in some cases can last for over three years. Residents can also be offered permanent relocations out of an authority’s jurisdiction, if suitable housing is not available locally, through the private rented sector.

On the face of it that sounds like it should make sense, but in practice where real lives are involved, it is often a tragedy bordering on farce. Struggling London boroughs, not able to meet housing demands in already heated markets, eye up housing in the comparatively cheaper Home Counties to relocate their residents. Likewise, the now saturated out-of-London housing markets in turn force those local authorities to seek housing solutions elsewhere, some sending residents as far as 250 miles away to northern cities, in order to secure affordable accommodation, having made deals with private sector landlords.

These are capacity and cost based decisions that reflect the state of our housing market. In fact, some councils are paying hefty incentives to private sector landlords outside of their borough, in order to secure accommodation. Such incentives can be for thousands of pounds and can undermine an authority’s ability to procure housing in the local market, creating a vicious cycle of need.

In theory people can only be placed out of area for housing with their consent. In reality there are increasing questions about the legitimacy of this claim. A recent documentary, Forced out Families*, featured families from Medway who were moved as far as Bradford. One resident interviewed, claimed that he had been threatened with having his children placed in care, if he did not take the accommodation offer, while another was told he would not be able to keep his dog if he decided to stay local. The pressures placed on the housing system makes it incapable of addressing the needs of residents, forcing them to make decisions with little ‘real’ choice.

It is often the most vulnerable in our communities who find themselves in such challenging circumstances with the potential to have significant long-term impacts. Residents in need could potentially be moved hundreds of miles away from their families and local networks to completely different towns and cities without the support they need. Most at risk are children who in their formative years could be faced with unstable circumstances, with the potential to have a detrimental impact on educational achievement and mental health.

The impact on local resources is also significant. The law governing out of area placements requires that the receiving authority is made aware when residents are placed in temporary accommodation within their borough, but this does not always apply when the transfer is on a permanent basis. This means that local authorities will often have no real grasp of the numbers moving into their jurisdiction. In places like Medway, the increasing number of families relocating under this system is placing additional pressures, on already creaking local services, including schools and health care.

Most local authorities will express their frustrations at the current system, and stress that out of area placements are often a last resort. So what can really be done to fix this growing trend? Understanding the origins of the problem is the first step in finding solutions. A housing crisis, which sees house building failing to keep up with demand and chronic lack of social housing is central to the challenge.

It has been exacerbated in recent years by an increasingly unaffordable private rented sector and changes to the welfare system, driven by a Conservative government, which has placed an increasing number of households at risk of homelessness and left local councils struggling to meet housing demands. Regional economic inequalities are also highlighted, confirming that house prices in London and the South East are no longer sustainable.

The causes are complex, which means that the solutions are also not simple. Local authorities do not necessarily have the answer and in the long term it requires a complete overhaul of our housing system, addressing the inherent problems which have led to the current crisis. In the short term, local councils need to come together to look at how we can work better together to manage housing demands, share information and alleviate the burden on local resources.

* ITV Documentary: Ross Kemp: Living With ‘Forced Out’ Families

<strong><span class="has-inline-color has-accent-color">Naushabah Khan</span></strong>
Naushabah Khan

Naushabah Khan has been a Medway Councillor since 2015, and is currently Medway Labour’s Spokesperson for Housing. Naushabah is passionate about securing sustainable development in Medway which includes sufficient affordable housing and proper infrastructure.

Naushabah was a Parliamentary Candidate for the Rochester and Strood in both the by election in 2014, and the general election in 2015. She is the Local Government Representative for the South East and works as a Director in Public Affairs.

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We cannot borrow our way out of the housing crisis: mortgage credit is part of the problem

We cannot borrow our way out of the housing crisis: mortgage credit is part of the problem

One of the key issues highlighted in my new book about ‘Generation Rent’ is how mortgage lending drives the UK housing crisis. I am far from the first person to point this out: my understanding of the problem is drawn from the research of the think tank Positive Money, IIPP economist Josh Ryan-Collins, property cycles expert Philip J Anderson, and many others.

But no-one in government seems to be taking it seriously. As a result, a dangerous policy proposal in the 2019 Conservative manifesto has gone largely unchallenged: the promise to support the mortgage industry in delivering long-term low fixed-rate mortgages for first-time buyers, which will ‘slash the cost of deposits’. This may sound like an enticing idea, but in practice it will only pour more petrol on the fire.

The truth about where mortgages come from

When you take out a mortgage, the lender conjures new money into existence. The money doesn’t come from other customers’ savings accounts, nor does it come from bank ‘reserves’: it is created from nothing.

The main constraint on mortgage eligibility is the borrower’s ability to repay the debt. Effectively, a mortgage is a large withdrawal from The Bank of Future You. And while you can typically only borrow 90%-95% of the property value, this does little to keep mortgage borrowing in check, as property prices can rise in response to expanding mortgage credit and vice versa.

When property and mortgages collide

When cheap and readily-available mortgage credit meets residential property, house prices shoot up. This is because the supply of land, which accounts for about 70% of the value of a home, is fixed. No market can produce new land in response to the demand for housing created by expanding mortgage credit. And you cannot take out a mortgage against a home that hasn’t been built yet.

So, what you get is an ever-expanding supply of money chasing after a finite amount of property. Maybe we should think of it this way: rather than house prices going up, the value of money itself has been systematically trashed relative to the value of property.

What if we pour new money into new homes instead?

This was the rationale behind the government’s Help to Buy Equity Loan scheme, which was reserved for new-builds only. The idea was that, because the new loans would be used to increase the housing supply, the scheme wouldn’t lead to house price inflation.

But since the scheme was rolled out via huge private housebuilders, these companies were able to control the supply of housing by hoovering up as much land as possible and drip-feeding their (often shoddy) new-builds onto the property market at a slow enough rate to keep sale prices artificially high. In consequence, housebuilders’ profits have swelled, and Which? recently reported a trend of Help to Buy homes falling in value, despite rising local house prices. Most worryingly of all, Help to Buy mortgage arrears are running at six times the ordinary rate.

A culture of land speculation entrenches the issue

Maybe the land-credit feedback cycle would be dampened if it were possible to take out a mortgage to fund a self-build property. But to acquire land, you normally have to satisfy a landowner’s price expectations (claiming vacant or unregistered land in this country is almost impossible). These expectations are likely to have been warped by the speculative nature of the land market.

Most landowners know that, under current rules, a piece of agricultural land can become around 92 times more valuable with a grant of planning permission for residential buildings. If the seller doesn’t like the price on offer, they can withhold their land indefinitely with no consequences.

A whole ‘land promotion’ side-industry has sprung up to enable speculators to share in the planning uplift, using legal mechanisms like ‘option agreements’ and ‘promotion agreements’ to reduce risk and increase profits. As a result, land is scarce and acquiring it is both costly and difficult, despite the fact that only around 6% of UK land mass is actually built on.

Why planning reform won’t solve the problem

Perhaps because land speculation is so rampant in Britain, the planning system is currently painted as the big bad wolf of the housing crisis amongst conservative thinkers. There is a belief that the land market will magically start behaving like any other free market if we scrap the 1947 Town and Country Planning Act. But for all its flaws, the planning system is not the fundamental issue here, even if there is a genuine case for planning reform.

In Victorian Britain, slum housing, rising rents and overcrowding plagued the Capital and other areas of rapid economic growth. This had nothing to do with rules and regulations (which were next to non-existent), and everything to do with the power that comes with land monopoly. The poor got poorer and the landed got richer: ‘twas ever thus.

We need to keep talking about land and credit

The only way to permanently stop the price of property ballooning out of all proportion is to tax the land beneath it. A land value tax could replace council tax (a ‘highly regressive’ policy that falls hardest on the least well-off), business rates and Stamp Duty Land Tax, and would disincentivise land speculation. It could raise much-needed revenue for public services hit by austerity cutbacks. Or it could even be redistributed in the form of a ‘citizen’s dividend’ or Universal Basic Income.

This idea has garnered support from across the political spectrum, but has traditionally been opposed by governments beholden to wealthy landowners and a predominantly homeowning public. So, since it may take some time to get the electorate to come round to the idea of a land value tax, a more urgent and politically possible course of action would be to reform the land acquisition process, so that local authorities can afford to build genuinely affordable social housing at scale.

In addition, the Right to Buy policy must be scrapped immediately to stem the loss of social housing – especially given that nearly half of the homes sold are ending up in the private rented sector and contributing to the soaring cost of housing benefit. The shortage of genuinely low-cost homes is acute; the number of people stuck on social housing waiting lists stands at well over 1 million.

For too long, spiralling house prices have been dismissed as an inevitable force of nature, or the product of too little housebuilding, or too much immigration – even though research from the Bank of England has concluded that the quadrupling of house prices over the last 40 years is ‘more than accounted for’ by falling interest rates. It may be dry, knotty and difficult to fit into a soundbite. But until we increase public understanding of the land and credit feedback cycle, the housing debate will only keep going around in circles.

<strong><span class="has-inline-color has-accent-color">Chloe Timperley</span></strong>
Chloe Timperley

Author of “Generation Rent: Why You Can’t Buy a Home (Or Even Rent a Good One)”. ORDER: http://bit.ly/2AX2LhE

Chloe’s professional background is in financial planning, which involves analysing pensions and investments. This led her to delve into how the financial sector sits at the heart of Britain’s housing crisis. During her research, Chloe went undercover at landlord events, spoke to MPs and activists, and joined a tenants’ union.

She also listened to the stories of scores of tenants who — like her — remain stuck against their wishes in the private rented sector.

Now, she wants to shift the housing debate away from simple narratives of supply vs. demand, and towards the underlying mechanisms that drive our dysfunctional land and housing markets.

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Post-Covid crisis how should the Private Rented Sector change?

The Covid crisis exposes weaknesses at the heart of our housing system. The emergency ‘all in’ policy for rough sleepers, temporary eviction ban, lifting of Local Housing Allowance rates are all life-saving measures.  But we should all be ashamed that our housing system is so broken that such interventions were needed.  

Access to a safe, secure and affordable home is no longer available to hundreds of thousands of children and their families.  Our whole housing system has to change and alongside national investment in genuinely affordable homes, major reforms to the private rented sector must be a core part of that change. 

Labour Housing Group Patron Karen Buck MP, has done outstanding work on improving rights for renters, including bringing forward the Homes for Human Habitation Act in 2019.  Labour needs to campaign for a private rented sector where renters pay a fair rent, are treated decently by their landlord, get their repairs done on time and can put down roots in a community. 

There is hope that this is a moment to reflect on the powerful impact that our housing situation has on our health and inequalities in our housing system but this Tory Government is not bringing forward the legislation needed. For a decent and fair recovery, where no-one is left behind, we need urgent measures to keep renters safe and a programme of long-term reforms.

Renters need secure homes – this is better for them and for economic recovery.  It is a huge relief for renters that the eviction ban has been extended to the end of August but there is so much more to do.  Following years of collective action, the Government has scheduled the Renters Reform Bill, but we must continue to press them and our representatives in Parliament to make sure that it is debated and enacted as soon as possible.  The sooner that Section 21 ends, the sooner that tenants can feel secure in putting down roots in their community.

Private renters have very few rights to information about their landlord or new home.  It is not right that renters cannot check whether landlords have met certain standards.  Mayor Sadiq Khan’s blue print for renters in London sets out how we can improve access to information for renters and we should campaign for devolution to local and regional authorities to establish accountability locally for landlords.  For Labour activists, preparing for local elections in May 2021 will be a key moment to speak to private renters, listen to their experiences and work on local policies to support private renters.

As a local Councillor, I know just how hard it is to use the legislation available so that repairs are done on time, homes are properly maintained and renters are treated decently.  The powers to take action on these issues rest mostly with local authorities who have endured a decade now of funding cuts.  For a fully functioning private rented sector, which works for renters, landlords and the economy, we need a transparent and standardised funding settlement for local authority enforcement services.

The connection between housing and health was cemented in public policy nearly 150 years ago in 1885 in the Royal Commission on the Housing of Working Classes.  This relationship was maintained when Nye Bevan became the Minister for Health and Housing in 1945.  The Covid crisis reminds us just how linked our health is to our housing. We cannot afford to wait another 75 years before this connection is renewed in policy. 

Many renters report not just a detrimental impact of insecure housing on their physical health but also a strain on their mental health.  Not only are some of our most vulnerable households living in insecure homes but many of the key-workers who care for us, feed us and nurse us are spending their already low wages on private rented homes with very few rights.  We urgently need transformation of the private rented sector, for a recovery that leaves no-one behind.

<strong><span class="has-inline-color has-accent-color">Rachel Blake</span></strong>
Rachel Blake

Rachel is the Deputy Mayor for the London Borough of Tower Hamlets. She was elected to represent the Labour Party for Bow East Ward in May 2014 and appointed to Cabinet in July 2015.

Rachel has held Cabinet Member roles for Regeneration, Planning, and Air Quality. Rachel is now the Cabinet Member for Adults, Health and Well-being.

She has previously been called in as an expert witness to the Housing, Communities and Local Government Committee on its inquiry into the long-term delivery of social and affordable rented housing.

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UK’s private rental sector – growing but not grown up

What can we learn from Germany?

One of the biggest changes in housing over the last 20 years has been the huge, unplanned growth of the private renting sector (PRS). But its unfettered growth has come at a price – which is paid for by some of our newly lauded key workers in the NHS and care sectors and the vulnerable – who are sacrificing their life chances, trapped in insecure, unstable, expensive accommodation.

Can Germany, which has the largest PRS in the EU, offer some lessons on a better way of doing things?

This is what I set out to explore last year when I got a Churchill Fellowship to carry out research on lessons we can learn from housing in Germany. The report Private Rented Housing: a broken system in Britain? Lessons to help fix it from 3 cities in Germany has just been published.

Can Germany, which has the largest PRS in the EU, offer some lessons on a better way of doing things? #redbrickblog

The PRS has grown enormously in the UK. It has doubled to 4.7million – i.e. 1 in 5 households – over the last 20 years, and in England it now houses more tenants than the social housing sector. It is a diverse sector with accommodation ranging from high end to housing of last resort. It is no longer a rite of passage for the young and transient – it is a sector that millions will live in for life.

It houses those who are unable to afford to buy, including many key workers and those in ‘Generation Rent’, and many families who in previous years would have qualified for social housing. The difference is they can be charged four times as much for a private rent as a social rent in areas like London. Sometimes for a neighbouring flat on the same council estate! And unlike their neighbours who rent from a social landlord, private tenants in England have to live with the threat of losing their home on the whim of a landlord as they have Assured Shorthold Tenancies.

The PRS was never designed to fulfil such a major role in UK housing and it needs to change to meet the real needs of our communities.  

The picture is very different in Germany. Germany has the largest PRS in Europe – 40% of households rent and this rises to 70% in major cities. Renting is affordable and mainstreamed – not stigmatised.

Overall Germany has a better PRS. ‘Better’ in the sense that it gives tenants greater security of tenure, more affordable rents, higher standards and a stronger voice to advocate for their rights and represent their interests.  And it is ‘better’ as a sector that supports and incentivises good landlords for the long term, thus improving local housing provision and sense of community. Crucially, Germany’s local government is stronger and better resourced and this helps Germany to build twice as many homes, including affordable ones, as the UK.

Obviously we cannot transplant another country’s housing system onto our own. Not least because each country’s housing market has grown in different cultural, historical and political environments. However, I found 5 factors that offer some important and transferable lessons for the UK. These are:

  • Stable and secure tenancies – We all value a stable and secure home – never more so than in the current lockdown. Yet, notwithstanding the current temporary ban, most private tenants in England can be evicted with 2 months notice for no reason, and this will apply after the ban. In contrast Germany, and most of the developed world, have secure, open ended tenancies where the grounds for eviction are based on breaking the rules eg rent arrears etc. Scotland introduced open ended tenancies in 2017 with no reported adverse effects on landlords or supply – so why not England?
  • Tools for regulating the PRS – Rent levels are more affordable and stable largely because they are regulated. There is data transparency – everybody knows the average rent in their area as they are published in a comprehensive local Rent Index (Mietspiegel). This information is used to help regulate rents effectively. It means rents in Berlin are typically 50% of equivalent lets in London.
  • A stronger voice for tenants –Tenants have greater access to advice and advocacy through a national network of self-funded tenants associations (Mieterverein). This also gives tenants a strong political voice and more power.
  • Better support for landlords– One of the surprises in my research was that landlords were as supportive of the German rent regulation system as tenants. They find it provides transparency, encourages good tenants and a more stable long-term rental stream. The system also provides more incentives to good landlords through tax breaks and subsidies.
  • Growing the supply of affordable housing – a strong local vision translated into building affordable homes and communities – To ensure the PRS works well it needs to be underpinned by an adequate supply of affordable housing. Local Government in Germany is better placed to drive this as it has more powers and is better resourced than councils in the UK. I looked at 3 cities in Germany and found that each had developed its own different, but effective, housing strategies to provide affordable housing and support mixed, vibrant communities in their local areas. The result – stronger neighbourhoods and overall more housing built. Since the end of the 2nd World War Germany (West and East) has built twice as many homes – 30 million compared to 16 million in the UK.

These are all things we can learn from and implement in the UK.

Most economic and social changes occur after times of war and crisis. After 1945 Britain introduced massive changes, such as the NHS and welfare system. After the 1st World War the Government introduced the Wheatley Act, which led to extensive council house building programmes. Changes we have reason to be grateful for today.

When we come out of this national Coronavirus crisis we will need to rebuild a better Britain – a new normal.

The current crisis has exposed the unfairness and fragility of our current broken housing system. We clap for the NHS, care and other key workers every week. But the average wage for a nurse is £25k pa. So with London rents averaging £1450 per month this would eat up 84% of their take home pay. They can get a handclap but they struggle to afford a decent home.

It’s good to see the G15 group of large housing associations joining together on the ‘Homes fit for Heroes’ initiative to tackle this. And good to see London’s Deputy Mayor Tom Copley convening a housing taskforce to tackle the challenges Covid-19 poses.

Let’s make fixing Britain’s broken housing system and building homes fit for our new heroes and heroines a priority.  So that it serves everybody fairly and establishes the building blocks to a healthier, happier and better-housed society.

To find out more and read the report – Private Rented Housing: a broken system in Britain? Lessons to help fix it from 3 cities in Germany click on https://www.morehousing.co.uk/

The report is also published by the Winston Churchill Memorial Trust and is available on https://www.wcmt.org.uk/fellows/reports/lessons-germany-prs

<strong><span class="has-inline-color has-accent-color">Maureen Corcoran</span></strong>
Maureen Corcoran

Mo Corcoran started in housing as a tenant and community activist in the area where she was born – Waterloo in London – including being a chair of a local housing co operative and a member of the successful Coin Street campaign in London’s South Bank. 

She went on to work professionally in housing, rising up the ranks from being a front line housing officer to become Head of Housing in the Audit Commission where she ran the housing inspection regime.

She has also taught on the housing and community studies degree at Birkbeck College and served on several housing association boards. She currently continues to serve as a board member and works as a London Blue Badge Tourist Guide, specialising in tours on social history, housing and the suffragettes.

Mo is a Churchill Fellow.

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Lurking danger in red tape review

Once upon a time Governments cared about the neutrality and independence of people that were appointed to undertake public tasks.  But the announcement that the Cabinet Office’sRed Tape Challenge’ review of housing regulation is to be championed by Simon Randall and Stephen Greenhalgh puts two of the country’s most dedicated Conservatives in charge of a dangerous exercise that could have major ramifications for the social, private rented and construction sectors.
Simon Randall CBE has a string of Tory appointments and Cllr Stephen Greenhalgh – described by Conservative Home as ‘a successful entrepreneur and landlord’ (no conflict there then) is of course the Tory Leader of Hammersmith and Fulham.  Greenhalgh notoriously co-wrote the Localis pamphlet on social housing which, despite denials by Grant Shapps and others at the time, became the template for the destruction of the social rented sector which the Government is now pursuing.  He is also behind the policy of redeveloping social housing estates in his borough against the wishes of the residents.
We have previously warned on Red Brick that the Red Tape Challenge holds serious dangers for the sector and the standards it operates to, and is mainly a device to bring in deregulation whilst no-one is looking.
As an example of the lurking danger in this exercise, most people in the sector believe that there is a need for stronger regulation of standards in private renting and in particular in houses in multiple occupation.  Yet a series of regulations to do with private renting and HMOs are on the Red Tape list for review and possibly for abolition.  Indeed, the Cabinet Office trumpets as beacons what has already been done by the Government to deregulate short-term holiday lets and HMOs.
The need for greater not less vigilance in housing is amply demonstrated by the publication of a shocking report by a group of housing associations in Staffordshire warning that the housing benefit cuts could see private landlords ‘subdivide’ properties to provide homes for those displaced from social housing.  The report shows the extreme danger posed by de-regulation when it is driven by the supposed need to provide ‘choice’ for tenants and reduce the ‘burden’ on landlords.  Unlike the Red Tape Challenge, the report concludes that councils should increase regulation of the private rented sector and give higher priority to the ‘enforcement of minimum standards’ as the number of low quality but more affordable houses in mutliple occupation increase.
The Staffordshire case is the reality of what is happening in the sector, with benefits increasingly cut well below even reasonable social rents and many more desperate people seeking solutions on the private market.
Messrs Randall and Greenhalgh claim they wish to hear the sector’s views and, always willing to help, here is the reply email: redtapechallenge@cabinet-office.gsi.gov.uk  I hope points like those contained in the Staffordshire report are made loud and clear.  But I fear that the Red Tape champions will hear only that which fits their world view.  Deregulation is set to become the next in a long line of battlegrounds.

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Cameron makes it up

If Ed Miliband had said anything as ludicrous as David Cameron’s claim that private rented sector rents are going down he would have been all over the news facing demands that he apologise with detailed analysis by pundits of the figures that show he is wrong.
In response to a question by Joan Ruddock MP, Cameron had the nerve to claim that the housing benefit reforms were bringing rent levels down: “what we’ve seen so far, as housing benefit has been reformed and reduced, is that actually we have seen rent levels come down. So we’ve stopped ripping off the taxpayer.”
Cameron’s statement was contradicted by everyone who has ever done any work on private sector rents.  Chartered Institute of Housing quoted National Valuation Office Agency data showing that LHA baseline rates, which are based on market rents, have increased or stayed the same in 853 out of 960 local authority areas since March 2011.
However the apparent misleading of Parliament never made it big in the mainstream news.  The fact is that Cameron gets away with saying things that aren’t true and gets an easy ride from the media.  No 10 set out the case for the defence.  They told Inside Housing “We are hearing of cases where in return for direct payments to landlords our reforms are beginning to work” but, as IH notes, the spokesperson “was not able to provide numbers to back up the claim, saying that the Government will publish data on the impact of LHA reforms later in the year”.
If Miliband had tried such a pathetic explanation as that deployed by No 10  – “we’ll let you know in a few months” – he would have been ripped to shreds.  “Hearing of cases”?  What cases, where, how many, publish the data!
It is interesting, though, that commentary on private sector rents now often includes reference to Ken Livingstone’s idea of the London Living Rent, even if it is often misunderstood.  Ken is seeking to open up the debate about rents by setting a benchmark – after due research – for the proportion of income that should reasonably be taken by rent if households are to retain sufficient income to meet their other needs.  As the idea develops it should put pressure on social landlords who are beginning to charge excessive rents under this Government’s policies, but also kick off a debate about how to exert an element of control over the private sector as well.
The countries with the most successful private rented sectors have a stronger measure of rent control than we do, and better security of tenure as well – but it is difficult to work out how we get from where we are to where they are.
Apart from saving cash, which they look increasingly unlikely to do, the argument deployed most frequently by Iain Duncan Smith and Lord Freud, and repeated by Grant Shapps, was that the HB changes would bring down rents.  It’s how markets work, they explained.  We argued at the time that this was nonsense economics: the policies would do nothing to bring rents generally down as there was excess demand in the system, but would put upward pressure on rents in the lower end of the market as more people chased fewer affordable homes.
Labour Housing spokesperson Jack Dromey MP has been chasing Cameron over his mis-claim, but it would be good to see it feature in a future PMQs so that Labour nationally can show, as Ken Livingstone is doing in London, that someone will stand up for private tenants on low incomes.

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Housing horrors

A new campaign launched by Ken Livingstone
Rip-off agency fees. Deposits lost unfairly. Rogue landlords evicting tenants with little notice and hiking rent with no warning.  Smashed windows, faulty locks and broken fridges not being fixed for weeks or months. Rodent infestations. Damp and mouldy bathrooms being left to rot.
These are just some of the housing horror stories Londoners renting in the capital have told me about in recent months. But I am under no illusions that there are many more out there.
Hundreds of thousands of people live in the private rented sector across London and I am determined to stand up for ordinary Londoners and improve housing for all.
In the coming months I will be setting out ambitious plans to improve the private rented sector which will be shaped by the experiences of Londoners.
I’m urging people to  tell me about their housing experiences so that if elected I can take action to improve housing for all.
You can leave your story on my website (click on the link at the top of the page), or get in touch on my facebook page, or on twitter using the hashtag #housinghorrors
Ken Livingstone