Is this the best time-ever to be a tenant?

The government’s English Housing Survey shows that the reality of the private rental sector is far from the one that some (including many in parliament) portray i.e. one of disgruntled tenants in conflict with greedy uncaring letting agents and landlords.

The National Landlords Association, analysed the EHS’s latest findings, showing that in 2015-16 in England the private rented sector accounted for 4.5m or 20 per cent of households; predominantly occupied by people aged between 25 and 34. 

Comparison to 10 years ago is informative. In 2005-06, 24 per cent of those aged 25 to 34 were private tenants, whereas by 2015-16 this had increased to 46 per cent, confirming the importance of the private rented sector as part of an integrated housing strategy. The NLA says that over the same period, the proportion of 25 to 34 year olds buying with a mortgage decreased from 53 per cent to 35 per cent.  It is believed that this is a combination of tougher requirements for deposits and affordability criteria implemented by lenders and, a shift in consumer preference towards the flexibility of renting.

Tenancies are also longer than many believe, according to the EHS data. The survey finds the current average time a tenant lives in their home to be over four years.   

Perhaps most surprising of all is that as a proportion of household income rent has fallen in the past 12 months; on average households spent 35 per cent of their total income on rent.  

Energy efficiency is also continuing to improve.  The share of rental properties in the F and G efficiency bands are down from 10.6 per cent in 2013-14, to just 6.3 per cent in 2015-16. 

Within the context of these figures, the best way to speed up improvements in the private rental sector will not be through more legislation and demonising landlords, but through funding the enforcement of existing laws and recognition in the tax system of the vital role landlords play.

Based on this evidence, government policy to hit landlords financially is misguided and unnecessary.  The move to ban fees paid by tenants to letting agents is not designed to reduce tenant expenditure (as that is already reducing as a proportion of income), but instead is purely a populist policy to gain votes.