Renting ‘need not be a poor relation to home owning’, says report

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The FINANCIAL — Private rented accommodation does not need to be a ‘poor relation to home ownership’ if the UK learns from other countries such as Germany, a new report has argued.

Dr. Ed Turner, Senior Lecturer in Politics at Aston University, has co-authored a report for the Institute for Public Policy Research (IPPR) which finds several shortfalls in the English private rented sector compared to Germany – a country where renting is the dominant tenure and appears able to offer both stability and security to its 40 million plus tenants.

The report finds that German tenants enjoy greater security of tenure, lower proportions of income spent on housing costs, and hold greater power through membership of local tenant associations that can lobby in addition to providing legal cover and advice.

The report reads: “The private rented sector (PRS) does not need to be a poor relation to home ownership or social renting. We can turn our attention to other countries in which the challenges presented by the PRS are managed with more success.

“This paper finds a number of similarities between the German and English rental markets, including the processes for finding a property to rent, checks on tenants’ finances, and expensive deposits.

“There are, however many areas of divergence where the German PRS appears more generous and secure, making it a more attractive offer to prospective tenants.”

Dr. Ed Turner, Senior Lecturer in Politics at Aston University, said: “The role played by the Private Rented Sector in the UK has changed enormously in recent years – with far more families in it, not just students and single people.  This takes us in the direction of the sector in Germany, and we argue there is much we can learn from Germany about how to raise standards and give tenants the stability they deserve.”

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IPPR is calling for renters in England to grasp the same kind of collective power that those in Germany enjoy, to take greater control of their housing. The thinktank is calling for the Government to support and fund the convening on a fully independent working group of third-sector, public and private organisations to develop a framework for building a new national tenants’ association.

In addition, IPPR is recommending that mass membership organisations, including trade unions, should explore ways for taking a more active role in supporting their private tenant members through legal advice and dispute resolution support services. It also says that insurance companies should offer extensions to tenant insurance products to cover legal fees in cases of tenant-landlord disputes, as standard.

Charlotte Snelling, IPPR researcher on housing, said: “Private tenants in England often pay high rents and receive mediocre service in return.

“Private tenants need to be given much greater voice and power. This could be done by following the example of Germany’s powerful tenants’ associations.

“This will help make sure their voice is heard in a debate that is often dominated by the goal of home ownership as well as provide them with more practical help to drive up the quality of rented homes.

“Doing this as well as better regulation of renting and building many more homes will be key to solving the housing crisis.”

The report will be launched at the House of Commons on Wednesday, 18th January for an event hosted and chaired by Shadow Secretary of State for Housing and Planning Rt. Hon. John Healey MP.

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