Some six million more people in Britain are living in short term rented housing than 15 years ago and as a result their financial stability has been hampered, according to a hard hitting new report.
Overall reduced levels of home ownership are adding to the malaise says the report from the Housing and Finance Institute which criticises Government housing policies and calls for £44 billion to be prioritised for social renting and first time buyers.
It proposes a radical new deposit loans system for young people and a first home deposit tax allowance to help first time buyers and give people with insecure tenancies in the private rented sector the chance to become owners.
The report also suggests that poor quality rented homes and high levels of private renting have failed to promote labour market mobility so fewer people are moving than in previous decades.
It adds that this fall in housing mobility has damaged the economy as fewer people are moving for work, especially younger people. It also means younger people are losing out on the wage boost that comes with labour market mobility.
‘This is a landmark report that sets out an urgent need to change direction in housing policy. The 15 year experiment of expanding the private rented sector on a huge scale has failed. It has left too many people facing exorbitant rents for poor quality homes, with severe detrimental effects on their living standards and future opportunities. The evidence is compelling. It is time for a rethink,’ said Natalie Elphicke, HFI chief executive.
‘It is time we introduced a strategy that incorporated both social housing and home ownership as priorities instead of peddling the usual narrative that one is good and the other bad. We need a fresh perspective to ensure we don’t just provide more and more homes, but that we provide good homes for all generations. We need to move away from the current emphasis on the private-rented sector,’ she pointed out.
‘The younger generations faces triple difficulty in that they have less access to social housing, less access to home ownership and pay the highest rents compared to their pay. We need radical new measures to help the younger generation and to regain a balanced fair housing market,’ she added.
The report explains that while almost four million households currently in social or private rented housing expect that one day they will own their own home, over the last 15 years there have been more homes created in the private rented sector at 2.56 million than the total number of new households created over that period.
It claims that the recent announcement on plans for a minimum three year tenancy system in the private rented sector may not help. It suggest that an extension of the flagship Help to Buy, scheme, deposit loans for young people and a first home deposit tax allowance to help young people get on the housing ladder will have a more positive effect.
It also calls for a market renewal programme to improve the standard of poor quality housing and the auto-enrolment of landlords into a national landlord licensing scheme in areas where there are high numbers of poor quality private rented accommodation.
The HFI recommends the setting up of an independent National Housing Delivery Commission to produce a 10 year housing delivery which would include assessments of housing tenure, public and private finance, needs of different housing markets as well as the maintenance and safety of rented homes. It should be published and presented to Parliament for scrutiny.
According to Mick Sweeney, chief executive of the housing association Radian, the report is stark. ‘Something must be done to reverse a concerning slide towards the private rented sector too often characterised by short term, insecure tenancies, otherwise it will have long lasting consequences for many generations to come,’ he said.
‘Owner occupation and social renting provides flexibility, affordability, opportunity and stability, the four pillars of a good home. The findings in this landmark report can help more people have access to a good home,’ he added.
