Is Renting Wrong?

For Times of TW

What’s so wrong with renting your home?

By Kent Barker

Oh, no. Here we go again. A government policy designed to achieve one thing is going to have precisely the opposite effect. When, in five or ten years time, you come to look back on the crisis it will cause, just remember: I told you so!

In case you haven’t guessed, it’s housing again. And, although the difficulty of finding a home is equally problematic in towns and cities, I contend that it’s out here in the country that people have the hardest time.

Take Kath: a hard-working woman with two children in their late twenties. They’d both left home and she was just relishing having her house back to herself to enjoy a little peace and quiet with her husband. But then her daughter’s flat–share came to an end and she had to move back home. Even if she could get another person to share with, the chances of them being able to find suitable accommodation at a price they can afford on minimum wage jobs (she’s a care home assistant) are next to nil. 

Then Kath’s son asked if he could move back into the family home after he split up with his partner. Kath loves her children to bits. She just doesn’t particularly love living with them anymore. But she can’t see how they can possibly get their own place. Private sector rentals are too high round here and there is almost no social housing available. Plus, as previously discussed, there will soon be even less under the government’s plan to allow Housing Association tenants the ‘right’ to buy. 

So Kath’s kids’ best hope is to wait for a new affordable rental unit to be built. For the past 25 years this was most likely to happen under a Section 106 agreement. That’s a deal by which a developer has to provide affordable homes or a financial contribution towards them, in return for the local authority granting planning permission. It’s a great idea. Make the developers –and thus the private housing market—provide or contribute towards some public housing.

A private hospital in my village wanted to finance an expansion by building 40 new houses on its site. Good; we need new homes. But they’d all have been sold at premium prices which few locals could afford. After an impassioned speech at the borough council planning meeting, I persuaded them to stick by their Section 106 responsibility and actually provide eight affordable units on the same site. Assuming it actually happens and that they are affordable rental units (and there’s many a slip…) then it may rate as the single most useful thing I achieved in my two terms on the parish council.

But now David Cameron is proposing to abandon Section 106 agreements on the back of his “Generation Rent to Generation Buy” commitment. It’s a good sound-bite and, if it does indeed produce large numbers of starter homes at 20% below the market price, then that could be a useful contribution to the housing crisis. But to do it at the expense of affordable rental homes is sheer madness.

Just look at the figures. You’d need to be earning £77,000 a year in London or £50,000 outside to be able to get a mortgage for one of these ‘Starter Homes’. Well, sorry, but you might as well ask Kath’s children to fly to Mars as to hope ever to have that sort of money. And what about those on the wrong end of the Government’s £12 billion benefit cuts, or those three million hard working families who each stands to lose £1,000 a year in tax credits? Does anyone seriously think they are going to be able to afford a Cameron Starter Home?

Another more fundamental question raises its head. Just what is so wrong with renting? I’m not talking about sink estates or tower blocks, but pleasant well-maintained housing association OR private homes. I was brought up in a rented place. It was, admittedly, the wing of a Georgian house owned by a charity in Blackheath, but it was the sort of place we’d never have been able to afford to buy.

 They happily do it in Germany and Switzerland and Austria and Denmark.  Even France has a (slightly) bigger rented sector than we do. I’ll concede that much greater security of tenure and serious rent controls need to be introduced.  But it’s this obsession with home ownership that has so skewed the housing market over the past 50 years.

You may say that huge individual wealth has been generated from the exorbitant rise in property prices—but I’d argue that’s exactly what’s made it so impossible for the next generation to get on the housing ladder.

So I predict abandoning Section 106 agreements and artificially curtailing ‘Generation Rent’ will only make things worse.  Much worse.

ends