Report: A better deal - towards more stable private renting

By: Robbie de Santos  Published: September 2012


Around 8.5 million people in England now rent privately, and the image of them being students and young professionals no longer applies. Almost a third of renting households are families with children, and nearly half are older than 35.

The current set-up of private renting is not meeting many people’s needs. Renters in England typically have short contracts of only 6 or 12 months, resulting in uncertainty for renters and high levels of churn in the sector. Millions worry about unpredictable rent increases, their contract ending before they are ready to move, and never having the certainty of knowing they will be able to make their rented house a home.

High turnover renting is not good for England’s landlords either, most of whom are individuals and couples rather than professional businesses. Landlords want their property investment to deliver good returns, and managing it to be as straightforward and hassle-free as possible. Short-term contracts can bring costly void periods and expensive re-letting costs, which make landlords’ jobs harder and undermine their returns.

Private renting should offer people the flexibility they need to take up jobs or respond to changed circumstances, and give landlords and investorsthe opportunity to run successful businesses. But it should also offer the millions of renters with no other choice the chance to put down roots and maketheir rented house a home.

A more stable and balanced private renting offer can be developed from the existing legal framework. There is nothing in law to prevent contracts offering people longer-term certainty in their home. Contracts can also be written to ensure renters have the flexibility to take up job opportunities or respond to changed circumstances, and to make rent increases more predictable.

Shelter believes that a new rental offer should be developed using the current legal framework. It should be called the Stable Rental Contract – and it would:
  • give renters five years in their home during which they could not be evicted without a good reason
  • allow landlords to increase rents annually by a maximum of CPI during the five years
  • give renters the chance to decorate their home as long as they return it to neutral afterwards
  • allow renters to give two months’ notice to end the tenancy
  • give landlords the right to end the tenancy if they sell the property.

The Stable Rental Contract can be brought to market immediately, and Shelter will play its part in driving forward the design and take up of better rental contracts. But practice in the market is deeply entrenched, and policy makers will need to design well-considered nudges, learning from behavioural economic insights, to encourage landlords to offer the Stable Rental Contract. Political and industry promotion is highly unlikely to be sufficient in itself, as shown by international experience.


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