Close to home: How renters can ensure tenant security

Rising house prices, stagnant wages, and two recessions have left a generation without a permanent residence

People in their mid-30s to mid-40s are three times more likely to rent today when compared to 20 years ago (PA)

The truth is that the circumstances are stacked against tenants - from rising rents to unscrupulous landlords. But reform is coming. So how can you protect yourself in the meantime?

A decade of rising house prices, stagnant wages, and two economic recessions have resulted in people in their mid-30s to mid-40s being three times more likely to rent today when compared to 20 years ago, according to the Office for National Statistics (ONS).

Meanwhile, around three-quarters of people aged 65 years or over in England own their home.

But why is there such little protection for renters and where is the justification to charge them over the odds to live in often dangerous and sub-standard properties they may have to move out of at any time?

First, we need to look at some of the major barriers.

Rising house prices are key. In May they were almost 10 per cent more annually, which means first-time buyers would need to find around £25,000 extra to buy a house than they did 12 months ago.

The recent stamp duty holiday, which saved some up to £15,000, still left first-time buyers having to find an extra £10,000 to buy a home.

The re-introduction of 95 per cent mortgages are also unlikely to provide much help. Mortgages requiring a 5 per cent deposit tend to be more expensive and often have stricter lending criteria. They also do nothing to solve the problem of a lack of supply of new homes.

Renters also need to save a new deposit every time they move house. Campaigners have been pushing for a lifetime deposit to be introduced, which is expected to be brought in with the Renters Reform Bill in the autumn.

“Deposits are one of the key pain points for renters,” says Matt Hutchinson, director of the website SpareRoom.

“Having to stump up a deposit before you get your old deposit back can make the difference between being able to move and not, so the ability to pay a onetime ‘lifetime deposit’ would be incredibly welcome,” he adds.

Evictions are also another key issue. From 1 August until 30 September, tenants can be given two months’ notice to leave if they have less than four months arrears or four weeks’ notice if they owe four or more months’ rent.

Section 21 notices, often known as ‘no fault’ evictions, are also allowed, but four months’ notice is required.

They allow landlords to evict tenants without giving a reason leaving renters in a precarious position knowing that at any point they could be removed from their home. A landlord, for example, could decide to sell a property at any point, or move in themselves, and the tenants have little option but to move out.

No fault evictions are expected to be banned in the reform bill, and long-term tenancies introduced to provide extra protection.

Polly Neate, chief executive of Shelter, said: “For too long renters have had a bad deal – paying through the nose for neglected properties, unable to complain out of fear of revenge evictions, and always living with the threat of a sudden eviction notice landing on the doormat.

“The Renters’ Reform Bill offers us a once-in-a-generation opportunity to transform private renting, including an end to Section 21 ‘no fault’ evictions and a national register for landlords. The government has promised a fairer deal for renters and now it needs to deliver.”

There are several ways in which renters can make their homes more secure.

This includes viewing a property in person before handing over any money, dealing directly with the landlord or their appointed agent, and asking to see a copy of the rental contract before paying a deposit.

“Watch out for red flags like being asked to pay money before even viewing; or any mention of fees, which have been banned since 2019,” warns Adam Hyslop, founder of Open Rent.

Renters should also make sure they are protecting themselves financially.

A contents insurance policy, which costs an average of £61.48 a year according to MoneySuperMarket, protects your belongings if they are damaged, destroyed, or stolen.

Protecting your income is also important. Almost half of private renters admit to being worried about money, compared to 30 per cent of homeowners, according to research from LV.

Despite this only 5 per cent of renters have income protection compared to 12 per cent of mortgage holders. A basic policy, which can pay out an income up to five years, can start at around £10 a month, although the exact price will depend upon factors such as your lifestyle, and profession.