The rise and fall of the private rented sector

IN Britain today 4.5m households are renting in the private sector. An increasing number are young adults and families with children. Eighteen per cent of homes are privately rented. In Newcastle there are more than 22,000 private renters – more than double the amount in the 1980s.

Tenant rents are high. Across England private landlords charge an average monthly rent of £650. London had the highest median monthly rent, at £1,453. In the North-East it’s £475 to £550 for a two-bedroomed Tyneside flat. According to the campaign group Generation Rent, three out of ten privately rented homes are classed as “non-decent”, a far worse figure than for owner-occupied homes and social housing. Little wonder that affordable housing has topped the policy agenda.

But private renting isn’t a new phenomena. At the turn of the 20th Century the dominant housing tenure was made up of private landlords renting for profit. Tenants had few rights. Conditions were appalling. On Tyneside housing conditions were, in many respects, the worst in the country and not that different from 1850.

Lack of town planning and inadequate housing laws gave the opportunity for unscrupulous landlords to throw up low quality, insanitary and damp homes which were rented out to the poorer groups in society. During the First World War the situation was so dire for working people and their families that a number of rent strikes took place, led by women in Glasgow. The Government passed the 1915 Rent Act which laid down rent controls on private landlords.

One result of this legal change was that many landlords refused to invest in their properties as a way of maintaining high profits. True, rents were cheaper in 1919-1938, but the condition of homes declined with overcrowding a big problem across the industrial heartlands of Durham, Tyneside and south-east Northumberland.

Despite the growth of council housing and owner-occupation, the post war Conservative government recognised the demise of the private rented sector and brought in the Rent Act 1957 which removed the rent controls reintroduced in 1946 by the Attlee administration.

The change in law unleashed Rachmanism – a new breed of aggressive landlords like Peter Rachman who manipulated housing regulations in such a way to increase rents massively and winkle out decent tenants. By 1965 the Labour government increased security of tenants in unfurnished dwellings and introduced fair rents. By 1974, security was extended to furnished accommodation.

Conservative attempts to support private landlords mean that in the 1980s newer, looser forms of tenancy could be agreed between landlord and tenants, which weakened tenant rights.

However, by 1988, private rented homes had become almost irrelevant to the housing needs of the majority of the population, as it had been replaced by council, housing association and owner occupancy.

Conservative administrations were ideologically committed to reducing the role of local authorities as housing providers and were strongly in favour of the free market. Mrs Thatcher as PM saw the reintroduction of private rented housing as an alternative to council homes.

In 1988 a new Housing Act was passed bringing in a raft of measures designed to undermine council provided housing and to build up alternatives. One feature of this was the repeal of rent controls, so that private landlords could, once again, be enticed back into providing properties to let. Sadly rent controls have not been re-introduced.

In the second decade of the 21st Century the private rented market operates to meet two very different type of housing need. At one end of the spectrum the properties are let out to well-off professionals, who seek high-quality, flexible homes in prestige neighbourhoods such as Northumberland’s Darras Hall estate or Gateshead’s Quayside. At the other end are those who are either too poor or whose salaries are too low to get a mortgage.

The number of people privately renting in England rose by a staggering 121 per cent between 1996 and 2016. In 2017, almost half (46 per cent) of 16 to 34-year olds were privately renting, up from 21 per cent in 1997. Too much of it is sub-standard with thousands of renters still living in homes unfit for human habitation.

What most young people want today is an affordable, warm, dry and decent home either to rent or buy. The challenge for central government is to provide it while re-introducing rent caps in the UK private rental market which works well in most European cities. With a policy commitment from all the main political parties to build more social homes, local councils across the region must re-establish themselves as the “private tenants’ champion”.

l Stephen Lambert is a Newcastle City councillor and a former senior lecturer in social policy and social science at Bishop Auckland College