A growing army of renters could throw the Tories out of power at the next election, a new analysis of the housing market has revealed.
The warning from housing charity Shelter comes as government figures show the number of people in the private rented sector are on course to almost match those with a mortgage by the 2022 General Election.
And with the renting boom fuelled by a surge in the 35-44-year-old demographic – a group more likely to vote in elections than their younger counterparts – charities are warning the Government needs to do more to ensure tenants are not ripped off by landlords and agents who could use loopholes to avoid a planned ban on letting fees.
A group of MPs highlighted last week how some letting agents have already admitted other fees involved with renting a property will be increased to make up for the money lost by the ban, due to come into force in 2019.
Polly Neate, Shelter’s chief executive, said: “In recent years the number of families renting privately has soared, meaning political parties can no longer afford to be tone deaf to the needs of renters and listen only to homeowners.
“It is vital for renters that this government bans letting fees properly, without leaving the back door open to agents to continue charging.
“It’s their main pledge to renters and if they get it wrong they might well feel the consequences at the ballot box in years to come.”
Data from the Government’s most recent Family Resource Survey shows the share of people in private rented housing increased for every age-group between 2007 and 2017, with the exception of over 65s.
As well as the 35-44 age group going from 13% to 26%, the share of those aged between 45 and 54 in the private rented sector went from 8% to 14%, and the 55-64 age group went up by three points, to 9%, over the same period.
Overall, the share of Brits living in private rented accommodation increased from 17% in 2010 to 20% in 2017, whereas the share of those in a home with a mortgage dropped by 4% over this period.
If those trends continue, 23% of voters could be living in privately rented homes by 2022, with just 24% in homes with a mortgage.
Data from the British Election survey shows that in 2017 voter turnout was over ten percentage points higher among 35-44 year olds than 25-34 year olds - 69% vs. 56% - highlighting the growing power this group will have at the ballot box.
The ban on fees chargeable to tenants by landlords and letting agents will be rolled out in spring 2019, but Parliament’s Housing Select Committee last week raised concerns over the Government’s plans.
While acknowledging the move “has the potential to save tenants in the private rented sector hundreds of pounds”, MPs called for security deposits to be capped at the equivalent of five weeks’ rent as anything above this “can cause financial difficulties for tenants.”
The report also flagged up how some lettings agents are already planning to recoup the money lost in letting fees by upping “default fees”.
“This is of particular concern given some evidence we received from the lettings industry suggesting that letting agents may seek to charge disproportionate default fees in order to recoup revenue lost as a result of the legislation. Northwood [Estate and Letting Agents] considered that ‘fees for any breach of the tenancy agreement, such as late payment, will increase and be applied more rigorously’. Regal Lettings supported this view by stating that ‘the fees that agencies would be allowed to charge tenants, i.e. default fees, would be increased severely as the loss is attempted to be made up elsewhere’.”
Clark Barrett, director of the Renters Alliance, warned banning letting fees is not the only issue affecting those in the private rented sector.
He said: “The main problem we see is not the letting fees, it’s poor service, it’s deposits not being returned, it’s repairs not being done.
“Banning letting fees will just see landlords pass on the cost to the renter by taking more of the deposit at the end of the tenancy.
“It’s a systemic problem, and the real issue is the shortage of good properties in the rented sector.”
One renter who has been stung by expensive fees is Amy Warren, who lives in Brixton, South London.
The 26-year-old and her two housemates were each hit with upfront fees of more than £1,800 to move into a property two years ago.
It was only after querying it with their lettings agent was the sum reduced, but they still paid out £1,603 each – the equivalent of a months’ salary for Amy.
She said: “You kind of get to the point where you’re so desperate to get a flat because everything goes so quickly you don’t really have much choice.
“We’d been looking for quite a while and all of our contracts were ending.
“Initially I was going to move into their flat and their landlord upped the rent by something like 25% from the year before, which is absolute insane.
“It’s a bit of a panic where we’re just going to have to pay up and go for it and then the whole thing was a disaster.”
A spokesperson for the Department of Housing, Communities and Local Government directed HuffPost UK to an announcement on Sunday April 1 around plans to “professionalise” the private rented and leasehold sectors.
According to the announcement, a new mandatory code of practice is proposed to stop managing and letting agents from flouting the law, and letting and managing agents will be required to obtain a nationally recognised qualification to practice, with at least one person in every organisation needing to have a higher qualification.
Labour’s Shadow Housing Minister Melanie Onn said: “This Conservative Government has failed to take the necessary action to support hard pressed private renters.
“Labour is on the side of private renters and will empower tenants by introducing new consumer rights, minimum standards on quality, standard three year tenancies, rent controls and properly tackle unfair charges by letting agents.”