“Bedsit Land”: the fall and rise of the private rented sector in the north

Photo by Ethan Wilkinson, courtesy of unsplash

In the UK today 4.5m households are renting in the private sector. An increasing number are young adults and families with children. 18% of homes are privately rented. In Newcastle, with over 22,000 private renters, it’s more than double what it was in the 1980s.

Tenant rents are high. Across England private landlords charge an average monthly rent of £650. London had the highest median monthly rent, at £1,453. In the North East it’s £475 to £550 for a two-bedroomed ‘Tyneside flat’. According to the campaign group Generation Rent, three out of 10 of privately rented homes are classed as ‘non-decent’, a far worse figure than for owner- occupied homes and social housing. Little wonder that affordable housing has topped the policy agenda.

But private renting isn’t a new phenomenon. At the turn of the 20th century the dominant housing tenure was made up of private landlords renting for profit. Tenants had few rights. Conditions were appalling. Overcrowding was rife. On Tyneside housing conditions were in, in many respects, the worst in the country and not that different from 1850.

Lack of town planning and inadequate housing laws gave the opportunity for unscrupulous landlords to throw up low quality, insanitary and damp homes which were rented out to poorer groups in society. During World War One the situation was so dire for working people and their families that a number of rent strikes took place, led by women in Glasgow. The government passed the 1915 Rent Act which laid down rent controls on private landlords. Nine years later tenants got modest security from eviction.

One result of this legal change was that some landlords refused to invest in their properties as a way of maintaining high profits. Rents were cheaper in 1919-1938, but the condition of homes declined with overcrowding a big problem across the northern industrial heartlands.

Despite the growth of council housing and owner-occupation, the post-war Conservative government recognised the demise of the private rented sector and brought in the Rent Act 1957 which removed rent controls which the Attlee administration re-introduced in 1946. Yet as Professor Brian Lund argues, this didn’t reinvigorate the private rented sector as there were no tax breaks or subsidies. Several landlords sold up when the properties became vacant.

But the change in law unleashed ‘Rachmanism’ – a new breed of aggressive landlord like Peter Rachman who manipulated housing regulations in such a way to increase rents massively and winkle out decent tenants. By 1965 the Labour Government increased security of tenants in unfurnished dwellings and introduced ‘fair rents’. By 1974, security was extended to furnished accommodation.

Conservative attempts to support private landlords meant that in the 1980s, newer, looser forms of tenancy could be agreed between landlord and tenants, which weakened tenant rights. However, by 1988, private rented homes had become almost irrelevant to the housing needs of the majority of the population, as it had been replaced by council, housing association and owner-occupancy. By 1990 64% of households owned their homes and a quarter were in social housing. Conservative administrations were ideologically committed to reducing the role of local authorities as housing providers and were strongly in favour of the free market.

Margaret Thatcher as PM saw the reintroduction of private rented housing as an alternative to council homes. In 1988 a new Housing Act was passed bringing in a raft of measures to undermine council provided housing and to build up alternatives. One feature of this was the repeal of rent controls, so that private landlords could, once again be enticed back into providing properties to let.

In the second decade of the 21st century the private rented market operates to meet two very different types of housing need. At one end of the spectrum, the properties are let out to well-off professionals, who seek high-quality, flexible homes in prestige neighbourhoods such as Ponteland’s Darras Hall estate or Newcastle’s upmarket Quayside. At the other end are those who are either too poor, or are on average £19k salaries, to get a mortgage.

The number of people privately renting across England rose by a staggering 121% between 1996 to 2018. In 2019, almost half (46%) of 16 to 34-year olds were privately renting, up from 21% in 1997. Too much of it is sub-standard with thousands of renters still living in homes unfit for human habitation. With coronavirus raging across the region many have been laid off, furloughed or put on reduced hours and are in rent arrears. Universal Credit payments or housing benefit too often don’t cover the full extent of market rents.

What most young people want today is an affordable, secure, warm, dry and decent home either to rent or to buy. The challenge for central government is to provide this while re-introducing rent caps in the British rental market which works well in most European cities like Berlin, Vienna and Paris. With a policy commitment from all the main political parties to build more social homes, local councils across the region must re-establish themselves as the ‘private tenants champion’.

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