Before Christmas we highlighted how the private rented sector is completely unfit for homeless or vulnerable families. Now a group of mums living in temporary accommodation in Newham are arguing exactly that. They are rejecting attempts to make them move as far away as Hastings or Manchester, and don’t want to be forced into expensive, poor quality and insecure private rented housing in London either. We were excited last month when, inspired by our housewarming party action in November, they held children’s party protest at East Thames, the housing association that is attempting to evict them. Now, at 10am this Thursday (6 February) they are holding a protest at the Mayoral Proceedings at Council Chamber, Old Town Hall, 29 The Broadway, Stratford E15 4BQ against being pushed into the private rented sector. Please support them if you can.
Today Shelter is hosting an event entitled “Ways to improve the experiences of homeless families and individuals placed in the private rented sector”. Yet Shelter’s own research tells us about how the private rented sector (PRS) is systematically failing families.
We applaud the work charities such as Shelter and Crisis do with homeless families. But we’re disappointed to see them colluding with the local and national government policy to re-house homeless people in the PRS. Shelter need only look to their own research to see why they should be openly opposing this approach.
The event today is aimed at local authorities and other practitioners. But they’re the wrong people to talk to. Since 2010, the government has increased the sell-off of social housing through Right to Buy and passed the Localism Act 2011 which means that councils no longer need to find social housing for homeless families, but instead can palm them off in the private rented sector where they face rip-off rents, poor housing, insecurity and exploitation. Rather than legitimising this approach and discussing with over-stretched and cash-strapped councils how to make the best of a bad job when people are forced into the PRS, Shelter and Crisis should be demanding a national change of approach to housing.
The interim findings from Shelter and Crisis’ three-year research project into homeless families experiences document the unreasonable demands made by many landlords of homeless families, not to mention the insecurity of knowing they could be evicted for no reason at any time. Staggeringly, for some families, eviction notices have been served as part of their contract.
The report shows families are living in inadequate housing which lacks proper cooking facilities. Some families are being forced to share beds. For others, renters feel unable to report repairs because of hefty call out charges or the very real fear they’d be branded a trouble maker and evicted. In a number of cases, tenants had done considerable work on their homes at their own expense to avoid bothering the landlord. This is not surprising; existing research shows that, compared to wealthier private tenants, those on lower incomes are twice as likely not to take action about a problem with their landlord for fear of the consequences.
Families interviewed by Shelter had spent up to seven months searching for a property they were able to rent, and some had had to move miles from their children’s school. In one case, a parent was spending an hour and 40 minutes taking their child to school each day, and another was travelling 15 miles.
Other research reveals how poorly regulated, insecure private rented housing is part of the reason people become homeless in the first place: government statistics show that for households becoming homeless, in over one in four cases this was due to their standard private tenancy ending – up from one in nine in 2009. That doesn’t include others mentioned in the research such as the family who were served an eviction notice after complaining to the council about the landlord’s failure to do repairs to address their appalling living conditions.
The description of the project on Shelter’s website states “We expect that the private rented sector will increasingly become a tenure of choice in which to house people.” But let’s be clear: as for the vast majority of renters we speak to, the PRS is not where homeless families want to live. Statistics show that the PRS is more expensive, poorer quality and less secure than other types of housing. Most of us are here because we have no other choice – it’s a good option when the only alternatives are temporary accommodation, rough sleeping or, as one participant in the study said, “living in a tent”.
For the wellbeing of homeless families, wider society and the public purse it’s obvious we need far more social housing, which is cheaper, better quality and provides people with the security they need to recover from the trauma of being homeless and prevent it happening again. We also need proper regulation to protect those who continue to rent from private landlords from extortionate rents, poor quality housing and chronic insecurity.
These are the things we were demanding at our recent housewarming protest against high rents and government subsidies for luxury private rented flats, just a few hundred meters from where the Shelter event is being held in Stratford. Meanwhile, the same issues are being faced by residents on the neighbouring Carpenters Estate which is threatened with redevelopment plans. It’s clear that the sooner we unite in demanding real change, the sooner it’ll happen.
We’re sorry not to have heard from you directly, but are pleased to hear that our concerns are misplaced.
Did you mean that we’re mistaken about the two bedroom flats being let for a minimum of £1,700 per month, meaning that they’re only affordable to families with an income of £76,000 or more per year? That would be good news, because the average income in Newham is £26,681.
Or perhaps you mean that you will be withdrawing your application to the government’s Build to Rent scheme instead of cashing in on subsidised finance for the privately rented flats you’re planning in Colindale, Ealing and Upton Park, at an estimated cost of a couple of million quid to the public purse*? That’d be great too!
Apologies for not contacting you beforehand – but we weren’t sure whether you’d be up for a party. But now we’re in dialogue, we look forward to you confirming how our original comments were inaccurate.
Let Down Renters
* We estimate that the Build to Rent programme will cost the taxpayer at least £90m. 45 developers have been shortlisted for the main tranche of funding, with Genesis applying for finance for three different developments.
Yesterday we occupied a luxury flat in Stratford, east London, to highlight extortionate rents and the government subsidies that are going to developers to build developments like this.
Read the full story below.
15 private tenants from 7 local tenant action groups across London
held a ‘housewarming party’ at a development of newly built private rented flats in Stratford, east London, in protest at soaring private rents and the government’s failure to tackle the problem. London rents have been rising at around 7 per cent per year.  10 others held a solidarity protest outside the Genesis tower block (see photo below).
The flats are built and let by Genesis , which has been shortlisted to receive funding through a government subsidy scheme  for private rented housing in three developments in London .
Rents in the occupied development, marketed as ‘Stratford Halo’, start from £1,700pcm for a two bedroom flat, the minimum size needed for a family with children – of which there are now more than 1.3 million renting from private landlords in England . Based on figures published by Shelter, these rents would only be affordable to families with an income of £76,000 or more .
Emma Bradshaw, one of the activists, said:
“Private renting is expensive and gives people no security – the last thing we need is more of it. Rather than supporting developers to build expensive private rented housing that is only affordable to the very wealthiest, the government should bring in measures to keep rents under control and invest in good quality genuinely affordable social housing that gives ordinary people the security they need.”
In total, £1bn is being made available to developers to build new private rented properties as subsidised finance at an estimated minimum cost to the public purse of £90m.  The government claims that the first £700m of the funding “has the potential to deliver between 8,000 and 10,000 new homes”. 
If the £1bn was used to build social housing on publicly owned land, around 10,000 new homes could be built , with money recovered through the rents. This would also help to reduce the housing benefit bill, 40 per cent of which now goes to private landlords as one in four private tenants currently needs housing benefit to afford their rent. 
For further information, images, footage and interviews, please contact email@example.com.
The protest was organised and supported by the following private tenants groups:
Advice 4 Renters (Brent) - Camden Federation of Private Tenants - Digs (Hackney Renters) - Haringey Private Tenants Action Group - Lambeth Renters - Southwark Tenants - Tower Hamlets Renters
All groups are also members of London Renters, a coalition of private tenants groups
The London Renters network aims to share resources for taking action on private tenants issues; support people to set up new private tenants groups in their borough and campaign together against developers, landlords, letting agents, government or anyone profiting from or exploiting our basic need for housing. Contact firstname.lastname@example.org for more information and to sign up for regular announcements.
Notes to editors
1. Figures published by LSL Property Services found that London rents rose 7.9 per cent in the year to March 2013 – eight times faster than wages.
2. According to its 2012-13 financial statements, “Genesis aims to be a leading property based service provider”, providing housing for sale and rent (at both social and market rents). The company had a turnover of £293m and made £36.7m from sales of property in the year to March 2013. It also received £34.3m in grants. In ten years time (2022-23) the company is projecting an operating surplus of £73m.
3. The Built to Rent fund provides subsidised finance (through loans or equity) to private developers for privately rented homes which will be let at market rents. £1bn is being made available through the scheme, with 43 companies with a total of 45 bids currently being assessed for the first £700m of finance – an average of £15.6m per project.
4. A Freedom of Information request to the Greater London Authority, which is assessing the bids for Build to Rent funding in London, reveals that the following three Genesis developments have been shortlisted to received funding through the Build to Rent fund:
- New Hendon Village, Colindale (zone 4), London Borough of Barnet
- Madeley Road, North Ealing (zone 3), London Borough of Ealing
- Springboard House, Upton Park (zone 3), London Borough of Newham
A total of 15 London developments from 12 developers have been shortlisted to receive funding through the scheme.
5. The English Housing Survey 2011-12 finds there 1,306,000 households with dependent children renting privately.
6. Shelter’s Private Rent Watch studies are based on rents being affordable if they take up no more than 35 per cent of net income. At a rent of £1,700 per month, the cheapest two bedroom flats in the Stratford Halo development would only be affordable to households with a monthly net income of £4,857, or £58,286 per year. This equates to a gross income of around £76,000 per year (assuming two earners with equal salaries, claiming child benefit for one child and having no other income).
7. Calculation based on funding provided through loans to developers with A-AAA credit ratings and normal collateralisation for a ten year period, with annual interest payments and the principle repaid at the end of the period. At current interest rates, developers will pay 1.74 per cent interest (source), yet the government pays 2.66 per cent (source). The minimum cost to the government of the loans (excluding operating costs for the scheme) is £92m (lending money at 0.92 per cent below their cost of borrowing £1bn over the ten year period). The effective subsidy to the developers is estimated at around double this figure, as the developers are able to benefit from access to loans at a considerably lower rate via the government than they would be to access themselves directly on the market.
8. Source: DCLG
9. Based on building costs (excluding land) of £100,000 per home (source: New Economics Foundation)
10. Source: English Housing Survey
Back in September we highlighted how the Advertising Standards Authority (ASA) had introduced new rules requiring letting agents to come clean about their fees: they must now “ensure they prominently include information about non-optional fees in their ads for rental properties”. The deadline for meeting these new requirements was today – but it looks like they’ve been widely ignored.
For example, a visit to one of the offices of Leonard Leese in south London today showed that there was no information about fees on the ads in their windows. Maybe that’s because they don’t charge tenants fees – like all letting agents in Scotland? Sadly not. On their website the information simply says “Details of our fee structure for rental properties will be shown here shortly”. Going into the office to ask, it transpires that they charge tenants at least £300, or one week’s rent if this is higher. But when asked about the new rules, the first agent appeared to know nothing about it, while the second just made some vague claim about the information coming “soon”.
Just down the road, Davis & Gibbs was pretty much the same story. No information on the ads in their window, and no sign of anything on their website. Stepping inside, the dream of a fee-free move was shattered again: £300 minimum fees, plus “some landlords have different arrangements for inventories and check-in, so there might be extra charges for this”. But this lot were more on the ball on the new rules about publishing the information – sort of. “It’s happening as we speak” claims the agent. “It’s just the IT guys don’t know how to do it”. Not impressed – if your IT team can’t add information to a website at two months notice, it’s probably time they got some extra training…?
We don’t think these are the only ones. If you’ve spotted other letting agents who are breaching the new rules, we’d love to hear about them: please post your stories in the comments below. You can also complain directly to the ASA using their online form.
Of course, it’d be simper if letting agents didn’t charge fees for tenants, who already face outlays often in the thousands when moving into a new home. Legislation in Scotland bans fees for tenants – and instead forces letting agents to compete on the fees they charge to landlords, who are completely free to shop around for the best value offer on finding a new tenant. It’s time the same happened here – and that’s what we’re demanding.
The shameful revelations about racial discrimination in the private rented sector highlight the gross imbalance that exists between landlords and tenants. The members of our groups have encountered openly racist, sexist and homophobic attitudes from landlords and agents, not to mention the routine discrimination against benefit claimants who are confronted with ‘No DSS’ signs in the windows of supposedly respectable high street letting agents.
Open and covert discrimination is one reason London Renters embarked on the Let Down campaign and continue to call on the government to do more to protect private renters. The housing market is so heavily weighted in favour of landlords. One consequence of this is letting agents are falling over themselves to attract new landlords and happily pandering to prejudices, safe in the knowledge that in this largely unregulated market the few laws that do exist to protect tenants are unlikely to be enforced.
As the Inside Out programme into letting agents makes painfully clear, the scant legislation currently regulating letting agents isn’t working. We need urgent action to stamp out unacceptable discrimination. London Renters call on the government to introduce long overdue licensing of letting agents and landlords so prejudices can be properly exposed and eradicated. We need a national register of landlords so those found illegally discriminating against people can be struck off.
And councils must be properly resourced so they can enforce the law against the shady and discriminatory practices which are a daily reality for people forced to rent in London. As the capital’s private rented sector continues to grow and council budgets are slashed, local authorities find themselves wholly unprepared to deal with the landlords and agents operating outside the law. Central government need to address this issue as a priority.
Brent Housing Action group will be picketing the National Estate Agents at 75 Willesden High Road, Brent at 12.30pm on Tuesday 15 October and marching to A-Z Property Services to publicly condemn letting agent discrimination and call for regulation of letting agents. Please spread the word and join them if you can!