The Secretary of State for Communities and Local Government Sajid Javid (pictured, right) presented the government’s housing White Paper to the Commons today with the aim of fixing the UK’s ‘broken housing market’.
During the run-up to Javid’s statement to parliament several ministers including housing minister Gavin Barwell had suggested that the government was keen to break its historical fixation on home ownership and focus instead on the rental market.
His preamble to parliament sounded promising. During it he warned that even renting a decent home had become a “distant dream” for many, and that this was the “biggest bar to social progress this country faces”.
But there is less evidence of this in the White Paper than many within the industry were expecting, and Javid only referred once to the rental sector in his statement, saying he wanted to “improve safeguards in the private rented sector”.
You have to scroll down to page 50 in the White Paper before key measures designed to achieve this aim are found, not quite the seismic change of direction many were expecting.
Build to rent
The first measure is to encourage more institutional investors to get into in Built to Rent, which is not new, in order to increase the number of purpose-built rental properties in the UK. But it was welcomed by commentators.
“Simply building more homes is not enough, but building more homes specifically designed to rent rather than buy should go some way to increasing the number of people able to get a foot on the housing ladder down the line,” says John Goodall, CEO of peer-to-peer lender Landbay (pictured, left).
Also, the White Paper highlights how the number of tenants renting in the private rented sector has doubled over the past decade to 4.3 million, and then reiterates the government’s recent commitment to banning letting fees after a consultation.
“We will consult early this year, ahead of bringing forward legislation as soon as Parliamentary time allows, to ban letting agent fees to tenants,” it says.
“This will improve competition in the market and give renters greater clarity and control over what they pay.”
Today’s White Paper also confirms an existing commitments to ban rogue landlords from the market and enable local councils to issue fines in order to “drive up safety and standards”. It also reveals that the government is consulting on whether to make electrical safety checks mandatory, and that it is considering more stringent client money protection rules for agents. Next steps on these initiatives are to be set out ‘shortly’.
The most radical measure mentioned within the White Paper is to introduce or ‘make available’ family-friendly tenancies of three years or more for those tenants who want them, although these is framed as an initiative to support investor interest in Built to Rent, rather than a policy for the wider private rented market.
“It is great that renting has finally been acknowledged as a long term tenure of choice, without putting so much emphasis on buying,” says Lizzie Stevens (pictured, left) who is the Acting Director of Rent at Folio London, the lettings arm of the Notting Hill Housing Group.
“We have always offered longer tenancies up to three years, so it will be interesting to see if the law changes and we can offer longer. Typically our average tenancy is 12 months, but we anticipate this will start to change as the market develops.
“We have begun to stipulate what the yearly rent increases will be to ensure that residents can sustain their tenancies into the future. We know that the number one priority for most renters is the cost, so being transparent with those who want longer tenancies is very important.
“For us, we encourage longer tenancies as we want our tenants to make where they live ‘home’, establishing themselves in a community. Longer tenancies will no doubt be beneficial for families who are looking for long term stability, for example near to their preferred schools.”
Valerie Bannister, head of lettings at Your Move (pictured, left), says: “There is nothing to prevent longer tenancies becoming the norm much sooner, in cases where this fits both the tenant’s and the landlord’s needs.
“We have seen tenants rent the same property for 20 years on a rolling monthly basis which has suited both the landlord and the tenant without any formality required of a three-year tenancy. In the long term, we want to bridge the gap between renters and landlords and form trusting relationships which are in step with market needs whether a short term let or a longer tenure.
“Although home ownership is out of reach for thousands in the UK, if the flexibility of renting can be combined with the stability and reassurance of longer residencies or suitable short term possibilities, for many, renting would be appealing for the long-term, as well as short-term option.”
Association of Residential Letting Agents response:
“We welcome today’s Housing White Paper; thinking about homes across tenures is really important and it’s reassuring that the Government is seeking a holistic view of all housing needs,” says David Cox, ARLA’s managing director (pictured, left).
“The White Paper raises many of the significant issues the housing sector is facing. The important next step is that the industry puts forward robust solutions and that Government listens and takes these forward to really make a difference.”
Download the full White Paper by clicking here.
Tell us what you think of today's White Paper.
Have your say