Are you a forty- or fiftysomething who recently spent your whole Saturday in a queue for Oasis tickets, only to discover that, as you finally approached your purchase, you were unwillingly subjected to the whims of “dynamic pricing” – a sudden surge in the ticket cost the moment before you buy? If so, you experienced something like what most renters experience every time we try to find a new rented home.
Often in London (and increasingly elsewhere), trying to secure a new tenancy – as I have done five times in the last eight years – involves attending a “‘mass viewing”. These usually take place on a Saturday morning. Interested parties arrive at 10-minute intervals over three hours or so. A gormless letting agent will make sure that you see the previous hopefuls on the way in, and the next group on the way out.
This isn’t an accident – they want you to see the enthusiasm and desperation in each other’s eyes. That way, when they ask you to “put your best foot forward”, you’ll know you need to stretch beyond your limited budget in the forthcoming “bidding war”. In this all-too common practice, landlords and agents pit renter against renter to wring out every last ounce of profit. Ticketmaster is being investigated by the Competition and Markets Authority for the Oasis fiasco, but renters are price-gouged across the country day in, day out.
The government’s renters’ rights bill, published today, intends to stamp out bidding wars. It’s good that this is being discussed, but it’s not yet clear how it would work in practice. In my experience, bidding can be subtler than the brutal mass-viewing tactic.
We in the Renters’ Reform Coalition – a campaign group of 21 organisations pushing for comprehensive reforms to private renting – believe the most effective way to stamp out bidding would be to simply require that the advertised rent is the maximum allowed, rather than seeking to ban soliciting bids, which could result in agents adopting a “nudge and wink” approach instead. Indeed, the Australian state of Victoria, which initially only banned the solicitation of bids, found that was ineffective and subsequently implemented a ban on all bids above asking price.
As unpleasant as bidding wars can be, they are only a symptom of our utterly broken renting system. And they are far from the worst symptom. I can weather a few Saturday morning indignations every year or so – I now have a roof over my head, even if the amount of rent I pay makes it difficult to save much. For so many people, the crisis in renting is far more serious.
About one in five renters in England live in a home that doesn’t meet the government’s definition of “decent” and about one in 10 have a hazard that poses “a serious and immediate risk to a person’s health and safety”. Insecurity is rife – and landlords hold all the power. They can evict you with only two months’ notice and without specifying a reason – a so-called section 21 notice. It’s no surprise then that the average tenancy length in England is 2.5 years, compared with 11 years in Germany. Rents are out of control, with record rises in recent years, outpacing wages and prices. With roughly half of renters having no savings, it’s not hard to understand how all this is producing shocking levels of homelessness. More than 150,000 children in England are growing up without a fixed abode – their development essentially put on hold, living in temporary accommodation that’s often unsuitable or unhealthy.
The renters’ rights bill is a huge opportunity to start to fix this broken, immoral system. It involves the long overdue abolition of section 21 no-fault evictions, making all tenancies open-ended from the start. Instead of invoking section 21, a landlord seeking possession will be required to prove certain “grounds” in court. The key to the success of the legislation will be ensuring that these grounds aren’t abused by landlords seeking to game the system; we’ll need to see the detail before passing judgment.
The bill proposes creating a private rented sector database, where landlords will be required to register their properties and tenants will be able to check their compliance. It will introduce new regulations that will require landlords to respond to complaints of serious damp and mould in a certain time frame.
These are basic protections that renting campaigners have had to fight tooth and nail for. They must be the start, not the end, of this government’s attempts to offer renters a better deal.
Unfortunately, the bill has very little to say about the main issue facing renters – rents! Though the government claims that this bill protects tenants against “unreasonable” rent increases, in practice there is very little to stop unaffordable rent hikes continuing to force people out of their homes. However, neither this essential protection, nor banning bidding wars, will solve the affordability problem alone. Renters must have basic protections and security in their homes – but the next task will be to address the soaring rents making life miserable for so many.
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Tom Darling is the director of the Renters’ Reform Coalition