Calls for more support for young renters

According to a new report by the All-Party Parliamentary Group on the Private Rented Sector, the Government should look at whether more can be done to help young people who want to rent. The Gro...

According to a new report by the All-Party Parliamentary Group on the Private Rented Sector, the Government should look at whether more can be done to help young people who want to rent. The Group carried out an inquiry into private rented housing for under-35s. It heard that the private rented sector is growing - and it has the highest proportion of young people of any housing tenure. Some 18 of all English households now rent privately and more than half of those private tenants are under 35.

But the members of the Group heard concerns that a range of issues - including council powers to prevent properties being turned into shared homes to rent, and housing benefit restrictions for the under-35s - could be making it more difficult for young people to rent in the private sector.

The Group's report calls for:

-The Government and local authorities to look at whether planning powers, known as Article 4 Directions, are unduly restricting the supply of new private homes for rent. It says the powers can be a useful tool - but it should be easier for landlords to rent out shared homes to families, and then turn them back into use as a house in multiple occupation.

-A full review of the Shared Accommodation Rate rules, which means single people under 35 can now only claim housing benefit equivalent to a room in a shared house, to see whether the changes mean not enough housing is available at the right rent for those who need it.

-Investigating paying housing benefit directly to private landlords to encourage more to rent their homes to those on benefits.

-An increase in the ‘rent-a-room' tax allowance to encourage more homeowners to let rooms to lodgers.

-A ban on council tax being charged for bedsit rooms, or the introduction of a lower band for bedsits, to ensure rented rooms aren't made unaffordable by more councils charging separate council tax on them.

-A review of VAT rules to encourage more properties to be converted for housing use.

Oliver Colvile, who is Conservative MP for Plymouth Sutton and Devonport, said:

“Growing numbers of young people rely on the private rented sector for homes. We need to make sure that the benefits, tax and planning framework we have in place allows them to find the homes they need, at a price they can afford. The government and local authorities need to work together to maximise the supply of good private rented homes available. With the private rented sector now the ‘youngest' section of the housing market, we need to make sure it works well for young tenants and their landlords.”

Fears of ‘studentification' are often behind the use of planning powers to restrict conversions to shared housing. But the Group's report also highlights areas of good practice, including schemes to ensure neighbourhoods where high concentrations of students live are kept tidy.

The report said: “We call on such partnerships to be replicated as a way of properly integrating students into their local communities and addressing some of the concerns those residents have about high concentrations of such tenants.”

The Chartered Institute of Housing welcomed the call for a full review of the shared accommodation rate rules and urged the Government to also carry out a review of the conflict between housing and welfare policy.

Gavin Smart, deputy chief executive at the Chartered Institute of Housing, said: “Many young people are being priced out of home ownership because of the housing crisis, which means that they are increasingly having to rely on the private rented sector. We welcome this report – particularly the call for a full review of the shared accommodation rate rules, which mean single people under 35 can now only claim housing benefit equivalent to a room in a shared house.

We warned when this measure was introduced that it would force already disadvantaged young people to take a backward step and would make it difficult for them to set up a stable home of their own. We also warned that it was unlikely that suitable and affordable accommodation would be available for everyone who needed it.

As well as the recommendations in this report, we think the Government should carry out an urgent review of the conflict between housing and welfare policy, which we believe is causing increasing homelessness. The Localism Act means that councils now have more freedom to help homeless people by finding them a home in the private rented sector – but welfare reform means private landlords are increasingly reluctant to let to people who claim benefits. We think this is one of the reasons that private rented tenancies coming to an end is now the most common cause of homelessness.”

The Residential Landlords Association called on ministers to end the “scandal” of local authorities charging council tax on bedsit accommodation.

Guidance from the Valuation Office Agency means that many local authorities are now classing a single bedroom in a shared house as a separate dwelling for council tax, rather than the house as a whole.

By doing so, councils are able to claim funds under the Government's New Homes Bonus scheme despite no new property having actually been created.

The RLA is calling a 50 discount on council taxes for rooms in shared homes in line with a similar discount introduced for so called ‘granny annexes'.

Commenting on the issue, RLA Chairman, Alan Ward said: “When young people are facing difficulties making ends meet, it is scandalous that some local authorities are applying full council tax bands to single bedrooms in shared homes, whilst using this to claim New Homes Bonus on homes that aren't new.

It's time the Government stepped into to end this gross unfairness.”