Thursday, 24 April 2014

Private rents 'unaffordable' in most of country

Average rents in the private sector are unaffordable for ordinary working families in more than half of local authorities in England, research shows.

The housing and homelessness charity Shelter released findings from its rent watch which showed that in the majority of councils, typical rents from private landlords were over a third of average take-home pay.

Rural areas are among the worst hit with findings showing that it is now more affordable to rent in Manchester, Liverpool or Birmingham that it is to rent in north Devon, north Dorset or Herefordshire.

London boroughs were the most expensive, with the average rent for a two bedroom home at £1,360 – almost two and a half times the average in the rest of the country (£568).

The least affordable local authority area outside London is Oxford, where typical rents account for 55 per cent of average earnings.

Shelter is calling on the government to take urgent action to stabilise the private rental market and develop policies to bring rents in line with average earnings.

Campbell Robb, chief executive of Shelter, said: ‘With huge differences in affordability across the country, there are now worrying signs that families are likely to be displaced by our out-of-control rental market.

‘Over recent years we have seen more and more people forced into renting, as high house prices and a lack of social housing have made it the only option for thousands of ordinary families.  

‘What we’re seeing now is that renting is no longer the easy, cheap alternative to home ownership.

‘We have become depressingly familiar with first time buyers being priced out of the housing market, but the impact of unaffordable rents is more dramatic.

‘With no cheaper alternative, ordinary people are forced to cut their spending on essentials like food and heating, or uproot and move away from jobs, schools and families.

‘With rural areas suffering just as much as cities - or in many cases, even less affordable - it’s no longer enough to encourage people to move out of crowded urban areas.

‘Government must urgently consider how private renting can become a stable, affordable option for families, and not a heavy financial burden that makes parents choose between buying food for their children and paying the rent.

‘This should be the wake-up call needed to finally take action to address our renting crisis.’


Readers' comments (81)

  • F451

    I remember someone once saying something along the lines that when faced with a fact that proves he is wrong, or a question he can't answer he answers another instead. I remember someone else pointing out that the same could be applied to the person making such a statement. How often it is that I am proven to be correct.


    Meanwhile Jono: Can landlords afford to reduce their rents? It is a very simple question that only needs a Yes or a No.

    Unsuitable or offensive? Report this comment

  • Rick Campbell

    Is it right to force someone who is providing an agreed service at an agreed price to provide more service for a lower 'reward'?

    I don't think so.

    But the government does -- by dropping pensions?

    Unsuitable or offensive? Report this comment

  • Jono

    I'm not avoiding your question - just stating that it is irrelevant.

    Say the answer is 'yes' for arguments sake. Landlords can afford to lower their rents (which assumes every landlord is in the same position which is of course an easily rejected assumption). A rent cap within the 'affordable' level will reduce the landlord's income in order to reduce their tenants costs. But not to an extent where supply or quality is necessarily impacted.

    Or let's say 'no' for arguments sake. Landlords cannot afford to lower their rents (an assumption which is as questionable as it was before). A rent cap will result in diminished supply and quality of private rented homes, as well as being detrimental to private landlords.

    These are pretty much what a yes or no means in terms of superficial outcomes. Superficially, you might say if the answer is yes, then as the landlord is not harmed, then it is OK.

    Regardless of a yes or no, in each case the imposition of a rent cap is still unethical for the reasons I gave before. The landlord should not be forced to give up his earnings because of the position his tenant is in, whether he can afford to or not does not factor.

    Rick seems to get the principle of it.

    Unsuitable or offensive? Report this comment

  • Rick Campbell

    Indeed so Jono, sort of -- but only in the simplest terms.

    I'm not against private landlords per se -- as many are damned good around here according to private tenants but not as good as the cheaper social landlords such as my landlord and the well more than a dozen others operating in the area.

    Private rents are quite dear here -- our rents aren't all that cheap (48 week year) but other than the densly populated areas, land values and property values are very high.

    Unsuitable or offensive? Report this comment

  • F451

    Go on then Jono - you get out of the corner that you backed yourself into.

    Let's just say both sides of what you say are true.

    Landlords if capped would struggle, but those same landlords will reduce their rents when benefits are capped because they will feel happier that it is their choice. So yes they can afford to reduce their rents and still run their businesses, but no they'd rather max out the benefit system whilst they are allowed to.


    On the plus side Jono - by holding two opposing views on the same subject you do increase your chance of being right, at least half of the time!

    Unsuitable or offensive? Report this comment

  • Jono

    Funny F451, if it were true. My position is unchanged.

    Your yes or no question was designed as a trap, which failed.

    It is not about the landlord feeling happier. It is about whether it is right for one party to an agreement entered into voluntarily, or their representatives, to force the other party to give them a better deal than the one they entered into.

    Is it right to force someone who is providing an agreed service at an agreed price to provide more service for a lower 'reward'?

    I don't think so!

    Unsuitable or offensive? Report this comment

  • McMadman

    My observation is this. If private rents are unaffordable in most of the country, and newbuild and new lets are forced to be at "affordable" (eg 80% market rent), how can "affordable" housing be "affordable ?"

    Unsuitable or offensive? Report this comment

  • McMadman

    Jono

    Interesting philosophical point. "Is it right to force someone who is providing an agreed service at an agreed price to provide more service for a lower 'reward'?"

    Well, yes it is. On the one hand, you might call it negotiation. Or, on the other hand, if you are one of the devolved governments of Britain, or even one of it's many local authorities, that is precisely what happens right now.

    Unsuitable or offensive? Report this comment

  • F451

    Poor Jono - you were clear that rent capping could not work because Landlords could not afford to reduce rents, then you were clear that because of HB capping landlords would reduce rents, and you were clear that tenants should negotiate reduced rents, implying that they can be reduced.

    Can't you just admit that you were wrong when you said rent capping could not work because landlords could not afford to reduce their rents. Your proposition that they should not be forced to reduce rents is an entirely reasonable argument which is debatable, but your categorical denial of the landlords ability to reduce rent was wrong - however much you try to wriggle against that, it is the the case.

    Yes/No was not a trap but simpy indicating to you that you have tried to be on both sides of the argument and are now trying to recover face - badly.

    In response to your question, because I know you get so upset if questions are not answered, yes it is - that is what negotiation results in does it not. Or are you now saying that the tenant's negotiation should be a once and for ever exchange, never allowed to be revisisted - that's a little restrictive upon the tenant isn't it Jono.

    How about this question: Is it right to permit a Landlord who may have more power (through owning the property wanted) to exercise that power over a prospective tenant who may have no recourse to support or advice, or any leverage to negotiate with? Does your world view support such an arrangement?

    Unsuitable or offensive? Report this comment

  • Joe Halewood

    Mc Madman

    National Average private rent level is £164.55
    National average LHA in payment is £113.74

    Hence LHA covers 70% of the 'gross market rent'

    Shapps' "Affordable" rent (sic) is up tp 80% of gross market rent or currently £131.64 and so is a higher cost to public purse for this social housing model than the private rented sector cosy.

    Unlike Jono,who asks how much time I spend on rents (about 1% of the time he spends avoiding these pesky facts is the answer!) these facts reveal the economic bankruptcy of the theory of affordable rents model.

    Why the sector has not exposed these figures as part of its strategy baffles me. As I've said numerous times whats the point of arguing whether AR is right or not. moral or amoral, dogma or correct - if the figures expose it produces the opposite of its intentions (to reduce HB bill and benefit dependency) then surely it is right to expose its economic inevitability, that is failure!

    Pesky facts again methinks! Shame as they spoil the fun on here of those that seek to deny them or ignore them with convoluted abstract theory

    Unsuitable or offensive? Report this comment

View results 10 per page | 20 per page | 50 per page |

Have your say

You must sign in to make a comment

sign in register

Newsletter Sign-up

More Newsletters

Related

Articles

Resources

  • Back on the front line

    15/11/2013

    WM Housing chief executive Pat Brandum went back to the shop floor to experience first-hand how her organisation helps vulnerable young people. Alex Turner finds out what she learned

  • Housing's IT crowd

    27/09/2013

    What does it take to keep a landlord’s technology running smoothly? Austin Macauley spends a day in the life of an award-winning IT team to find out

  • The kids are alright

    11/10/2013

    Southampton Council’s junior warden scheme, now in its 10th year, has given 1,000 kids the opportunity to look after their community. Simon Brandon finds out why it’s so popular

  • A bright idea

    22/11/2013

    Why has a Sunderland-based social landlord set up a charity providing solar powered lamps to communities in Africa? Martin Hilditch finds out

  • Protecting the vulnerable

    19/07/2013

    Homeless legislation should change to reflect the truly ‘vulnerable’