Policy makers are being asked to make significant changes, as a new report suggests a third of Britain's young people will continue renting for the rest of their lives.
"Britain's housing problems have develop into a full-blown crisis"
A generation of young people are facing the prospect of renting their home for their whole lives. Policy makers are being called upon to radically overhaul the private rental sector and tackle Britain’s housing crisis once and for all.
The claims follow a new report from Home Improvements, setting out a blueprint to resolve the situation.
Tax reforms to discourage multiple home ownership.
Better support for home ownership among the young.
Backing for councils to build more affordable homes.
The private rending sector has grown rapidly over recent decades, At the age of 30, four in ten millennials are living in this way. This is a much higher rate than previous generations and four times that of baby boomers at the same age.
In this way, concerns are growing, as more millennials reach their child-rearing years, bringing up children in the Private Rented Sector is becoming the norm.
The ratio of children in owner-occupied housing compared with those in the Private Rental Sector:
2003: 8:1 (600,00)
2018: 2:1 (1.8 million)
Issues with Private Rented Sector:
- Standard 2-month notice periods.
- 1 in 4 properties fail the decent homes standard.
- 6 or 12 month fixed term contracts.
- Large rent rises at short notice.
The report by Home Improvements argues the sector will continue to be a major feature of Britain's housing for many years to come. A rapid acceleration of millenniam home ownership would still not be enough to match the levels the 'baby boomers' have seen.
More pessimistically, If home ownership follows the weak pattern of the 2000s, up to half of milennials could still be renting (either privately or in the social rented sector) in their 40s. Worse still, a third could be renting by the time they claim their pensions.
It wouldn't just be millennials who suffer from the housing crisis either. If the number of retiree rents continues to rise, coupled with an ageing population, the housing benefit bill for pensiors could more than double from £6.3bn today to £16bn by 2060.
So what's the solution?
In order to improve the housing offer for renters, the Resolution Foundation is calling for:
• The introduction of indeterminate tenancies as the sole form of contract in England and Wales, following Scotland’s lead and the practice in Germany, the Netherlands, Sweden and Switzerland.
• Fair balancing of the needs of tenants with the rights of landlords. A landlord could remove a tenant that fails to pay the rent or treat the property well, or if they wish to sell or reoccupy the home, but cannot simply end the tenancy at short notice without good cause.
• Light-touch rent stabilisation that limits in-tenancy rent rises to CPI inflation for three-year periods.
• A new housing tribunal, to ensure landlords and tenants can have disputes resolved swiftly.
Lindsay Judge is the Senior Policy Analyst at the Resolution Foundation.
She says; “Britain’s housing problems have developed into a full-blown crisis over recent decades and young people are bearing the brunt – paying a record share of their income on housing in return for living in smaller, rented accommodation."
"Up to a third of millennials still face the prospect of renting from cradle to grave."
“If we want to tackle Britain’s ‘here and now’ housing crisis we have to improve conditions for the millions of families living in private rented accommodation. That means raising standards and reducing the risks associated with renting through tenancy reform and light touch rent stabilisation."