Landlords: Don’t be scared of commitment

There’s an ever-growing group of people in Britain who feel that the rental market isn’t working for them.

They’re concerned about securing the right length and flexibility of tenancy to suit their needs; fair rent prices; and an uncomfortable asymmetry of power between landlords and tenants. And they’re worried that the government won’t do anything to fight their corner.

I’m not talking about the 9 million people in England who rent privately, but landlords whose numbers have increased to an estimated 1.4 million in recent years.

According to the Private Landlords Survey 2010, 89 per cent of landlords are private individuals responsible for 71 per cent of all private rented dwellings. More than three quarters of all landlords only own a single property for rent, and the majority work to support themselves while renting out their property.

Of course there are some landlords who are profiteers, plain and simple. My ex-landlord wouldn’t return my calls when a dehumidifier sucking pints of water out of the air couldn’t belay the mushroom jamboree happening on my bedroom walls. There remains a lot of work to be done to deal with poor quality housing.

But the cold reality is that we’re increasingly becoming a nation of renters and while building more social housing and properties to buy is absolutely vital, we urgently need to make the prospect of a life of renting work better for both tenants and their landlords.

Because when it comes down to the crunch, when we talk about renting for the most part we’re talking about millions of relationships between individuals. And we should be focusing on how to make these relationships work better for each party involved so that each tenancy provides a safe and high quality home while providing security for tenant and landlord alike.

At the moment, this doesn’t happen often enough, with contracts typically lasting six or 12 months. Government figures show that in 2010-11, 1.26 million households within the private rented sector had moved within the previous year – the highest in decades. Millions of tenants worry about unpredictable rent increases and their contract ending before they are ready to move. Instability means higher costs for renters, unsettles families, impacts educational attainment and reinforces poor housing standards.

To this end, Shelter has called for a stable rental contract which would give renters five years in their home during which they could not be evicted without a good reason, and allow landlords to increase rents annually by a maximum of CPI during the five years.

Many landlords are perfectly happy with this idea – the National Landlords Association, Genesis and Qatari Diar Delancey East Village Operations have all been supportive. Ed Miliband has also spoken in favour of this idea and the Labour policy review explores both tax incentives for landlords and the possibility of giving local authorities the power to implement longer contracts.

However, though built on strong foundations, the stable rent contract is currently missing a supporting wall. A report published last month on behalf of the Residential Landlords Association attacks the case for longer-term rents.  The RLA represents 20,000 landlords in the private rented sector, who manage between them over 250,000 properties across the UK.

The report argues: “Uncertainty is rife in life. Why should privately rented housing be any different?” It’s hard to agree. Almost a third of renters are families with children. Teresa Pearce MP recently wrote about the school children in her constituency at their fourth school before the age of 10 due to multiple evictions in a short lifetime.

The RLA argues that it is “by no means clear” that a substantial proportion of families with children want to settle down for a long time in their current rental homes. In fact, Shelter found that 62 per cent of renting families would like the option of longer term tenancies.

Whatever your thoughts on the RLA’s concerns, the report is an eye-opener. There is a delicate balance to strike in the renting market and perhaps surprisingly, both tenants and landlords feel they are the underdog. In order to make a success of the stable rent contract, we need to accept that the renting market is broken for landlords, too.

So the left must argue the case that long term contracts can deliver better returns, and avoid the expense of void periods and re-letting costs.

More than anything, instead of demonising them, we need to work hard to persuade sceptical landlords not to be commitment-phobes. The trusting relationships built by longer term rents can benefit them too, and in turn will create stronger, more stable communities.