In England, more people now rent their home from a private landlord than from a council or housing association. There are more than 4 million privately rented homes in England housing over 11 million people. The proportion of people living in the private rented sector is higher in England (20%) than Scotland (15%) and Wales (15%), but is growing across Great Britain.
What needs to change
We are calling on government to change the law in England to improve conditions for people who rent from private landlords. This would mean landlords have to be registered to rent out a home and must provide longer tenancies to make sure homeless people can access a secure and stable home. Read more about housing conditions and security of tenure
Private renting and homelessness
In the past a large proportion of people at risk of homelessness would have had their housing need met by councils or housing associations. Today many single homeless people have no choice but to rent from a private landlord particularly in England.
Private renting can be the only option available but it is often not fit for purpose. This is because:
- the high up-front costs of deposits and rent in advance are a barrier
- many properties are in poor condition and tenancy agreements don't offer long-term security
- rents are set at unaffordable levels (read more about housing affordability).
In recent years successive governments have encouraged the development of new homes for private rent, with a type of housing known as Build to Rent.
Barriers to private renting
Homeless people struggle to get access to homes let by private landlords. The up-front costs of private renting can be high because tenants are asked to pay a deposit and rent in advance. Our research has also found that some landlords think, wrongly, that it is too risky to let their property to people claiming housing benefit. This makes it even harder to find a property to rent. Read more about this in our Home. No less will do report.
Our Help to Rent programme addresses these barriers. The programme has funded a number of projects that support both landlords and tenants to establish lasting tenancies in decent properties. We also offer professional service packages to landlords to encourage them to become part of the solution to ending homelessness.
We want to see an expansion of Help to Rent services. From 2010 government funding helped deliver more than 150 Help to Rent projects across England. Together these delivered over 10,000 private tenancies for homeless people. An independent evaluation from the University of York showed that these projects worked well. Disappointingly the government ended funding for these services in 2016. In Scotland every local area should have a scheme to help people access private tenancies.
In the Autumn 2017 budget the Chancellor announced £20 million for Help to Rent projects to support homeless people, vulnerable tenants and their landlords. This funding should help fund services that will match tenants with landlords, and provide financial guarantees for deposits and rent, as well as ongoing support for both parties.
The Scottish and Welsh Governments should consider the case for creating national Help to Rent schemes, including national funding for deposit guarantee schemes.
Housing conditions and security of tenure
In England, nearly a third of private rented homes fail to meet government standards. Our research has shown that poor standards have a negative impact on the physical and mental health of homeless people re-housed in privately rented homes (see A Roof Over my Head report (PDF)).
Many landlords in England and Wales offer only short tenancies of 6 or 12 months. This undermines the security of people living in private rented housing. It is also often a cause of homelessness. The end of a private tenancy is now the leading reason for homelessness in England (see Homelessness Monitor).
England
Steps are also being taken to improve the standard of homes let by private landlords in England. For example the government have:
- introduced banning orders for landlords that have committed serious offences against tenants. This includes threatening tenants with violence, illegally evicting tenants or failing to carry out work to the property where this has been ordered by a local council
- applied rules protecting tenants living in houses in multiple occupation to more homes.
The government are also planning to stop letting agencies charging fees to tenants.
We welcome these plans, but call on the government to do more to improve conditions for renters in England. We want to see a change in the law so that landlords have to be registered to rent out a home. This would make it easier for councils to tackle poor standards. We are also calling on the government to create longer tenancies of at least three to five years for private renters and to limit rent increases during the tenancy.
Read more about our proposals for private rented housing in our Home. No less will do report.
Scotland
The Scottish Government has taken steps to improve security for tenants in the private rented sector.
In 2017 they introduced a new open ended tenancy that must be used for every new private rented tenancy. This means that tenants renting from a private landlord in Scotland will be able to stay in their homes as long as they don't break the rules of the tenancy. The landlord will only be able to evict tenants in specific circumstances, such as if the tenant does not pay rent or if the landlord needs to have the property back to sell it or use it themselves. There are also restrictions on the way landlords can increase rents, for example only imposing one increase in any 12 months.
Private landlords in Scotland need to register with their local authority to show they are a ‘fit and proper person’.
In Scotland it is already the case that letting agents must not charge fees. From 2018, new rules will mean all letting agents have to register and work to a new Code of Practice.
Wales
In Wales the private rented sector continues to be characterised by short term fixed contracts of only 6 or 12 months. The Welsh Government has recently introduced reforms to simplify private rented contracts, however these changes will not significantly improve security of tenure for private renters.
The Welsh Government has a central registration scheme for all landlords - Rent Smart Wales - which launched in November 2015. All landlords in Wales are required to register with the scheme.