On the wrong side of the property ladder
If you’re of a certain generation then the decision to rent rather than buy a home is one driven by many factors. Yet for those under the age of thirty, it often comes down to having little choice.
Time was that renting a place was as much a lifestyle choice as an economic necessity. Things have changed dramatically.
I won’t bore you with the all the stats but it’s enough to say that the number of private-sector rented households has doubled to 4.8 million in the last decade or so. The figure is set to grow even more rapidly.
As you also may have noticed, the property world is going through a manic time. The market is playing post-lockdown catch-up and homes that once couldn’t attract a buyer are now suddenly saleable.
Unlike the social housing sector, where tenancies are secure and subject to strict regulation, the private sector very much operates on a commodity principle - and owners are cashing in.
A few weeks ago, the law affecting tenants’ rights shifted which means a landlord can once again end a tenancy without a reason by serving what’s called a Section 21 notice.
This measure was suspended during lockdown but it’s now estimated that around 850,000 families could be at risk of losing accommodation.
Things are even more tenuous for those living in Houses in Multiple Occupation (HMOs). In such cases, things are often handled through a lettings agency.
I know of one instance where a household was shared by five young professionals. They each had an individual contract and paid rent accordingly. Whenever someone moved on, the agency would find a replacement.
However, things changed when the owner suddenly refused to replace a departing tenant because he wanted to sell the property. Unable to make up the difference in rent between them, the remaining four reluctantly packed their bags. All perfectly legal too.
Students previously occupying down-at-heel properties in seaside towns are also finding their goods and chattels on the doorstep as the staycation phenomenon now offers owners the incentive of an income worth five times more in holiday lets.
However, it would be wrong to portray all landlords as bad ‘uns and leave it at that.
I know of owners who have helped tenants on hard times by dropping or deferring the rent. The problem is that the mortgage repayments still have to be made and some tough calls will soon be necessary.
Elsewhere, an acquaintance of mine who was renting out a former family home recently discovered that his tenant had gone missing – along with the fridge freezer, washing machine and a couple of doors. He’s having trouble getting an insurance pay-out because he didn’t make quarterly inspections.
Incidents of this kind inevitably mean landlords and agents feel they need to ask for hefty deposits along with rent payments in advance before handing over the keys.
In some cases, things get taken to extremes. One media report highlighted how a tenant had to take out a bank loan to pay for an upfront six months' rent on a new flat.
According to the financial media, rent arrears has become a serious problem for private landlords. However, the National Residential Landlords Association cautions its members from demanding excessive downpayments.
It can be tough business on the wrong side of the property ladder. Whatever the circumstances, and regardless of whether you’re a tenant or landlord, I’d say the smart move is to get some good local legal advice before taking your first step.