Good morning! The demand for rental properties in Britain has significantly increased, with an average of 20 people requesting to view each property that comes on the market. This is more than triple the demand seen in 2019. In some parts of the north-west, the number of people requesting to view a property reaches 30. The rental market has become a battleground for many, as rents continue to rise and exceed the available supply, leading to increased stress for individuals looking to move.
The chronic shortage of housing is a major factor contributing to this crisis. However, campaigners and tenants argue that they can’t wait for the government to build more homes. Homelessness has increased by 34% in London between 2021 and 2022, and over 2.5 million people are consistently struggling to pay their rent, according to the housing charity Shelter.
The UK stands out as an example of a country with minimal regulation and protection for renters. In Denmark, renters can stay in their homes indefinitely, while in France, landlords cannot evict tenants during the winter months. In Germany, landlords cannot charge more than 10% above the average rent for similar properties in the area. In Sweden, social rents set the standard for private rents.
In today’s newsletter, I had the opportunity to speak with Beth Stratford, co-founder of the London Renters Union, about the state of the rental crisis in England. But before that, let’s get into the top stories for today.
1. Global health: A study published in the Lancet Planetary Health journal suggests that air pollution is contributing to the rise of antibiotic resistance, which poses a significant threat to human health worldwide.
2. Asylum: People seeking refuge who were ordered to live on a giant barge have been spared after legal challenges argued that the vessel was unsafe and unsuitable for traumatized individuals.
3. Retail: British stores are being forced to lower prices to stimulate business due to poor summer weather and increasing interest rates, which have led to a decrease in consumer spending in July.
4. South Korea: The UK contingent at the World Scout Jamboree in South Korea faces relocation costs of £1 million, which will impact the work of the Scout Association for up to five years. Meanwhile, South Korea is dealing with the need to relocate thousands of people due to an approaching typhoon.
5. Lobbying: Tech firm Palantir, founded by Peter Thiel, a libertarian billionaire and supporter of Donald Trump, has been lobbying the UK disabilities minister to adopt new technology to combat benefits fraud.
Now, let’s delve into the rental crisis in England and the experiences of renters. According to a survey by Citizens Advice, 300,000 renters were forced out of their homes last year due to unaffordable rent increases. Private rents across England saw a 4.5% increase in the year leading up to June, the highest annual rise in a decade. In London, private rents increased by 15.2% in 2022. Members of the London Renters Union reported an average increase of 20.5%. These rising rents have put a strain on households, with mortgage payers spending 22% of their income on housing, compared to 33% among private renters and 42% in London.
The scarcity of housing is a major issue, with 4.3 million homes missing from the national market. This backlog has been building since the 1950s, as governments have consistently failed to meet their housing targets. The oversaturation of the private rental sector is due to individuals who want to buy but can’t afford it due to high interest rates, and those who would rely on social housing but face extensive waiting lists. This high demand has created opportunities for some landlords to take advantage. “The only people who can really afford to buy houses at the moment are second homeowners with a lot of cash. If this happens, we’ll see an even greater transfer of homes into second home ownership, which will be used for short-term lets, Airbnbs, or sitting empty,” says Stratford. The number of available rental homes remains between 20% and 40% below pre-pandemic levels in most regions.
It’s important to emphasize that political choices have contributed to the housing crisis. While it may not have been intentional, the result is a lack of regulation and reliance on private investors for the provision of a basic human need, leaving vulnerable renters at risk.
Rental inflation has seen consistent double-digit growth for 15 consecutive months. Property website Zoopla predicts that rental growth will slow down to 8% by the end of the year, but this provides little comfort to renters who already struggle to afford current increases. Once rent prices go up, it’s difficult for them to come back down, as there is little incentive for landlords to lower prices after successfully increasing rents.
No-fault evictions have seen a rise of 116% in the past year, with landlords initiating nearly 61,000 eviction court proceedings since the government pledged to ban section 21 evictions. The Renters (Reform) bill, which the LRU has campaigned for, includes a ban on section 21 evictions. However, Stratford notes that loopholes allow landlords to continue evicting tenants unfairly. The tribunal system does little to protect renters who may not have the means or ability to challenge their landlord in court. Additionally, landlords can still evict tenants when they want to sell their property or use it for their own household, which accounts for most evictions. The LRU argues that landlords should at least provide a fixed number of years of guaranteed housing to provide tenants with some security.
The government’s focus on homeowners and mortgages has often excluded tenants from the political conversation. However, there appears to be growing interest from politicians in addressing this issue. “When they published their Renters (Reform) bill, they wanted a quote from the LRU on it, which we didn’t give them. But the fact that they wanted us to write a quote for their press release indicates that the government now recognizes the need to consider renters’ interests,” says Stratford. “We will continue to push and build on that leverage.”
In other news, there’s an interesting story about Seahorse Parents, Alex & Jerome, and their journey. Click the link to read more.
That’s it for today’s newsletter. Have a great day!
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