George Osborne’s pre-election budget was announced yesterday and among all the vote spinning measures, such as the increase in the personal allowance, and the cut to beer duty (a sure fire way to guarantee votes if ever there was one!), there was little, if any, direct help for renters. This is despite the fact that the news has been full of the unsustainable cost of renting in the UK in the past year.
Since the Coalition came to power, house prices in England and Wales have risen from £162,712 to £179,492, according to the Land Registry. We have seen Help-to-Buy loans (as well as the new ISAs), and the rethink of the Stamp Duty regime but the bare fact remains that the UK has a huge housing shortage, which has pushed up house prices beyond the reach of a significant proportion of the population who, a decade ago, would have been already on the housing ladder. What this means in practice is that the rental sector in the UK is growing and for the first time in a long time many of us are looking at becoming lifetime renters.
While housing problems are often discussed in terms of what can be done to create new buying opportunities, some industry experts have suggested that what we actually need to do is change the way that we view the housing shortage in the UK. Speaking at a seminar hosted by a Midlands law firm at the end of last year, Jon Bellfield, managing director of the Barberry Group, a privately owned property development and investment company, said “We need to have a shift in attitudes towards renting, and the private rental sector could be the solution to the UK’s housing problems.”
Predictions indicate that the rental sector will continue to grow at pace and, although this is related to the lack of opportunities to buy, many believe it’s also the result of changing lifestyle choices. For example, a large proportion of the under 35s don’t see property ownership as the Holy Grail it once was and many more favour the flexibility that renting offers. There are, of course, many benefits to renting, from being able to move around freely without financial ties to the fact that the cost of repairs remains someone else’s responsibility. And if the UK is moving towards a majority renting – rather than buying – housing sector then it wouldn’t be alone. In Switzerland, for example, more than 50% of people rent and in Germany the figure is in excess of 40%.
So is the rental sector the solution to the UK’s housing problems? If this is to be the case then it’s clear that there needs to be a strengthening of legal protection for renters in the UK and better overall management of the market. This is in addition to measures to make renting more affordable – something the chancellor (whoever that may be) could bear in mind at the next budget. At The Tenants’ Voice we hope to be at the heart of making renting better value for everyone. This is why we have set up a directory of Vetted Letting Agents, help and advice for tenants, as well as industry awards that recognise and reward agents and service providers who are meeting high standards. If you’re one of the many in this country looking at renting long term then add your voice to ours to help make the rentals sector a fairer and more reasonable place for all.