The great tightening of British tenants

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If you’re sitting in a rented house right now, the numbers won’t be a comforting read.

We already know that landlords fare much better than long-term renters. But even in the short term, the latest wave of numbers shows just how precarious the immediate financial situation of tenants is compared to that of their landlord peers.

Only one in five private renters believe their finances are healthy. Twice as many people with a mortgage think the same thing.

One-third of renters wouldn’t last a month with their savings, compared to just one in six mortgage holders and just one in 20 who own their homes.

But don’t dismiss this “resilience gap” as something that only affects the young and the underpaid.

It’s a growing problem over time, culminating in the biggest gap among those over 65, according to new data that sheds light on the harsh, long-term reality of being a tenant – for life or no – in a nation obsessed with and still fully property-driven.

“The generation’s rent is drying up and spending cuts are making the situation worse. Their finances are on a razor’s edge, so even the smallest surprise can cause financial chaos, ”says Sarah Coles, personal finance analyst at Hargreaves Lansdown.

Renters have to work much harder to build resilience as they are crippled by the fact that they spend much more of their income on rent than landlords spend on mortgages.

“On average, nearly 30% of their income is spent on rent, compared to less than 20% for those with a mortgage. This means there is much less in the budget to save for emergencies, ”Coles notes.

“Workers should have between 3 and 6 months of essential expenses in an easily accessible account, just in case of a nasty surprise, and retirees should have between 1 and 3 years of expenses, which can seem like a mountain to climb when you’re just making ends meet.

“The spending cuts have made everything more difficult, with the cost of everything from gasoline to energy bills and food soaring.”

Base costs are also rising, with the latest rental market survey showing strong rental growth in a decade.

Growing by more than five percent year on year for properties outside London, the average cost now stands at £ 790 per calendar month, an additional £ 456 per year from the same period last year.

Gráinne Gilmore, head of research for Zoopla, who released the figures earlier this month, said: “As always, a lot will depend on how well the current rules around Covid continue as they are. But since there is no deviation from the current landscape, the demand for rental properties, coupled with lower supply levels, will continue to put upward pressure on rents. “

Against this backdrop of affordability comes the Tenant Reform Bill – the next step in the snail’s paced process of enshrining greater protections for tenants into law.

Promised in 2019 before becoming one of the many administrative victims of the Covid, the bill is back on the agenda this fall with the response from the consultation that would cover occupancy rights, sureties, housing standards and social housing.

With emergency eviction measures and six-month notice periods still on the minds of tenants, the changes are expected to strengthen tenants’ protection, including the prohibition of ‘no-fault’ evictions, the introduction of life bonds, the crackdown on criminal owners and the implementation of the charter for residents of social housing.

A new tenant needs and wants survey by roommate site SpareRoom shows the focus is on abusive landlords, with calls to finally release rogue landlord information to tenants.

Introduced in April 2018, the Rogue Landlord and Realtor Database targets what the government describes as “only the most serious and prolific criminals who are convicted of the limited range of prohibition order offenses. “.

In October 2018, the Prime Minister promised to extend access to the information in the database to tenants.

Elsewhere, tenants are asking for the establishment of a national landlord register, the generalization of open-ended leases, facilitating rental with pets and, above all, facilitating rental if they receive housing allowances.

Designed to help you pay your rent if you are unemployed, on low income, or on certain other allowances, many private landlords have long excluded recipients of housing allowances for a variety of reasons, including fear that the allowance might be paid in arrears, and after being invited to do so by their agent.

In July last year, a York County Court judge ruled that blanket bans on renting properties to those who benefit from them were indirectly discriminatory and therefore illegal under the Equality Act of 2010. But little seems to have really changed for those trying to rent a home with state financial support.

Meanwhile, lifetime deposit plans, where a rental deposit is transferred from one rental to another, should help alleviate the stress of having to deposit the next deposit – often thousands of pounds – before that. the last is returned.

“The government has promised rental market reform, with lifetime deposits one of their stated intentions. It will certainly make a big difference to tenants, but it is clear from our research that landlord regulation is at the top of the list in terms of what tenants really want to see from government, ”said Matt Hutchinson, director of communications at SpareRoom.

“It’s great that tenant rights are back on the agenda but, as always, cracking down on the worst offenders must be a priority for the industry as a whole.”

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