With added pressure on the lettings market and more competition for homes, renters often feel like they're at the mercy of an unregulated market. Is it time for legislation?24th June 2011
It’s estimated about 40 per cent of us – as many as 9 million households - rent our homes. On the whole, those who rent privately tend to be younger, have a job, but also the social mobility to strike out on their own.
We’re also staying in the rental world longer than we used to as fewer of us can afford the big reserves of cash required to get a mortgage.
The latest FindaProperty.com Rental Index shows rental prices in the UK increased by 4.9 per cent in the first quarter of 2011. However, there are now fewer rental properties available than at the end of 2010, and market supply is 35 per cent below its peak in April 2009. Is it fair that renters - the life blood of the property market – are the most exposed when it comes to finding a place to call home?
The renter is now under enormous pressure to find a suitable property at the right price. And as if this challenge weren’t enough, those who rent have the added angst of being at the mercy of an unregulated market, who holds all the power in the relationship, especially before a tenancy agreement is signed.
FindaProperty.com research found one in eight of those looking for a rental property were gazumped over the past 12 months. While this makes life difficult for the renter, the real problem is actually the pressure on the market.
With so much demand and such limited stock, a landlord is well within their rights to ask prospective tenants for a holding deposit before the tenancy agreement is signed. Without an agreement in place, the tenant is completely at the landlord’s mercy as to whether that money is returned should the tenancy fall through.
Once a tenancy agreement is signed, the landlord has a general framework for action and must carry out basic repairs and ensure water, gas, electricity and heating are in good working order. But apart from those very general requirements, there’s no other “law” that looks out for the renter; and as all renters will know – there can be a lot of funny business going on behind the scenes.
Even the Association of Residential Letting Agents recognises there’s a problem and have long campaigned for better regulation of the private rented sector. Likewise, Claire McAnulty, a policy expert at Consumer Focus, says the landlord is firmly in the driving seat when it comes to renting, despite the cost to the renter being massive.
Much is made of our national distaste for regulation, but although for example, our pensions are among the most regulated in the world, the billions spent on rental homes every year in the UK ask the question: isn’t it time to seriously consider how we can make therenting experience more balanced and tame those sharks?