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21CC: Life off the ladder

21CC: Life off the ladder Paul Maguire/Shutterstock.com
14 Jul
2016
As the UK’s – and London’s – housing situation has tumbled towards ‘crisis’ in recent years, over 11 million people are now housed in the private rental market. The RGS-IBG’s 21st Century Challenges team explores the rise of the long-term renter

The average rent in the UK (excluding Greater London) is now £773 per month, 3.5 per cent higher than a year ago, while average rent in London is now £1,575, up 3.9 per cent, according to the latest figures from HomeLet. What solutions are necessary in order to make the country – and especially the capital – more affordable? Would enforcing longer leases provide the protection tenants need? What about building smaller homes? Is it possible to make renting a more desirable option, to offset the explosive rise in house prices?

Rosie Walker, co-author of The Rent Trap and coordinator of Renters’ Rights London:

We need properly enforceable standards. We’ve got these things called Licensing Schemes at the moment, where councils can make private landlords get a licence. Which in theory is meant to make them meet certain standards, and they can have their licence taken away if they don’t meet those standards. In practice it’s not really working because councils just don’t have the money to handle it properly. So we would have a properly funded, enforceable standards system, which would include a publicly accessible register of landlords.

We need some form of rent controls. It’s better to talk about rent controls than ‘rent control’, because everyone thinks rent control is some mad communist plot. Actually it’s quite normal in most of Europe. Doesn’t work so well in New York, I agree, but does work pretty well in Germany, Sweden, and lots of Europe. That would still allow landlords to make a profit, just a bit less.

We need minimum five-year tenancies. The assured shorthold tenancy (AST) must last five years, unlike now where it only lasts for six months – or if you’re lucky you get 12. That doesn’t mean you have to stay for five years, as a tenant you can leave, just give a month’s notice. But you have the right to stay for five years. Some landlords do want to offer longer tenancies but their mortgage providers don’t let them, so that’s another thing that needs to be changed. Five years just gives you the right to stay for that long, crucially the right to complain, and the right to know what the rent increase is going to be over years, which means you can plan ahead and raise a family.

 

Ben Pentreath, architectural and interior designer

There’s a feeling in this country, probably uniquely, that the only way to succeed economically is to own your home. Of course, this is a deeply ingrained generational issue. My own parents bought their first house in the early 1960s when they got married, and it cost them less than £1,000. Their second home cost them £1,200. The largest mortgage that my father has ever owned in his life is £20,000. Of course now they’re sitting on a nice-ish house in the Isle of Wight probably worth £350,000. So to lock in that generational wealth in one or two generations has skewed the whole way that we think about things. I think that the chickens will come home to roost in that regards when – as is already happening through legislation – old age care is being paid through the value in the house.

The flip side of it is that so many of my friends who have got onto the housing ladder are at absolute full stretch as far as I can see, living slightly in cloud cuckoo land with the low mortgage rates right now. Very few of them are saving into a long-term pension of any form – so they’ll have a house when they stop working, but not necessarily money to eat.

Given the amount of invested interest that we have in the game, I think it would be very hard to legislate all of a sudden to say ‘Every lease must be five years long’. It would cause huge disruption in the mortgage markets and the housing market. I completely support the long-term aspiration, but I think that would have to be a piece of law which is passed that in ten or 15 years time, we would have this as a target. I think it would have to be a very slow shift back into longer leases.

 

Tim Lowe, ‘Secret Tenant’ and founder of Lowe Cost Guardians

London currently has a minimum size design guide, set by the GLA, where a studio is 400 sq ft and a one-bed is 500 sq ft on a new build property. I’m completely against that – I feel if we want to start making London truly affordable, the only way to do that is to start building smaller units.

I’m very happy living in a small unit, it’s not a problem for me. I accept that the reason they’re doing that is that when you have a family, space suddenly becomes a much bigger criteria for you. But when we’re getting these developments where you’re saying ‘Okay, you’ve got to have X amount of one-beds, X amount of two-beds, X amount of three-beds’, all of a certain size, you’re alienating a lot of that affordable option.

If you speak to developers, they want to build smaller units. They realise that demand housing-wise is for that affordable sector. We get a lot of negativity about what’s going on in Nine Elms where these schemes are being sold off overseas. I agree it’s not right, it’s a bit of a kick in the teeth on the affordable side. But that’s a very small issue compared to small criteria like that.

There’s a company called Pocket Living, and it gets away with building below the minimum spaces standards, and in doing so it says ‘We’re going to build 20 per cent less than what you set, but then we’re going to set it 20 per cent below market rate.’ It’s a really interesting model because it’s profitable, but it’s also serving a purpose for the wider generation of what Londoners want.

These panelists were all speaking at Life off the Ladder – a 21st Century Challenges public panel discussion hosted by the Royal Geographical Society (with IBG) and chaired by Aditya Chakrabortty, senior economics commentator for the Guardian

The UK's ‘housing crisis’ will be explored in The Housing Callenge, featuring in the upcoming August 2016 issue of Geographical

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