3 September 2014
With the sustained upward pressure on property prices even the Government’s Help to Buy Scheme isn’t enough to get everybody on the housing ladder. For millions of people there is no hope of ever achieving the Thatcherite Utopia of a home owning society.
For many the wage/purchase price gap is simply too high. For others mortgage eligibility is limited due to insecure work contracts or self employment and many are happy to have the flexibility that home ownership cannot offer.
Like it or not, the rental market is here to stay. So isn’t it time it cleaned it’s act up?
- Shelter, the Housing Charity have long been pressing to end Letting Agent Fees with over 16,000 so far signing a petition in agreement.
- The scarcity of available property in many areas is driving up rents and excluding many lower income families from getting the home of their choice.
- Sub-standard accommodation is commonplace.
- Many immigrants are being exploited by rogue landlords.
The last serious piece of legislation in the private rental sector was over 20 years ago when Assured Shorthold Tenancies were created, opening up the market to a new generation tenants and buy to let landlords. And it worked pretty well for many years. The supply of property increased and rents remained fairly constant.
But following the credit crunch many people found themselves unable to find a mortgage. This has eased lately but increased prices have compounded the problem. Cue rising rents and tenants having to accept high fees and poor quality housing.
There are a few things that could be done as soon as possible to allow more people access to a decent home. These include;
- Increasing the length of an Assured Shorthold Tenancy to give both landlord and tenant more security.
- Ease the process of evicting a bad tenant to encourage more landlords into the system.
- Encourage landlords to sign up to a Code of Conduct stating that they will maintain and improve the property, will register a deposit, provide safe and secure housing, will respond to calls in a timely manner and so on.
- Provide tax incentives to landlords to do more than simply maintain the home. Currently repairs can be offset against income for tax purposes but improvements cannot (these have to wait for CGT Relief). In other words you can repair a grotty bathroom and get tax relief, but you cannot replace it and claim easily.
- Build more. Generally housebuilders looking to resell can pay more for land than one looking to rent. Councils could therefore offer land with covenants restricting resale to encourage private sector landlords.
Some simple carrot not stick ideas could even out the unfair two tier system we currently have.