By Rob Anderson
People who rent privately are more likely to become homeless than people who own their own home or live in social housing, and the numbers of people becoming homeless following the end of a private tenancy have increased substantially over the last 10 years in England. In 2021-22, 41% of households owed a prevention duty due to being at risk of homelessness were renting privately, while owner occupiers made up less than 2%.
This means that the Renters Reform Bill, published this week and setting out the most substantial changes to the legislation governing the private rented sector in decades, marks an important moment for homelessness in England. It is hard to say however what effect this new legislation might have on homelessness, and this is partially due to the complexity of intervening in the private rental market.
Regulating the private rental sector (PRS) is difficult because it has to balance the need for security and decent standards for renting households while encouraging landlords to enter and stay in the private market. Long tenancies with high security, perhaps accompanied by rent controls, offer little incentive for landlords. This has historically resulted in scarce and poor quality rental properties - this was the case in England for the much of the second half of the twentieth century, with the share of households renting privately falling to less than 10% by 1991.
Significant deregulation, accompanied by financial support such as buy-to-let mortgages, has since seen the PRS expand significantly - the number households in the sector rose 45% between 2008-09 and 2020-21, from 3.1 million to 4.4 million households. This has been important in the context of declining availability of social housing and rising house prices which has pushed owner occupation out of reach for many. The PRS now accommodates around one-fifth of all households, including an increasing number of families with children - in 2020-21, 30% of households in the private rented sector included dependent children (1.3 million households).
While short tenancies and strong repossession rights for landlords may have played a role in the PRS’ revival as a tenure in England, the ongoing combination of low security of tenure and rising rents unmatched by increases in wages or benefits has seen the end of a PRS tenancy become the most common cause for statutory homelessness. Between October and December 2022, almost 12,000 households were owed a prevention duty due to the end of a private tenancy, 37% of the total. Households at risk of homelessness in the PRS often require targeted financial support, emergency accommodation, and support to find a new home. The cost of living crisis has made this situation more acute; pressures on renters’ incomes - which may be exacerbated by a contraction in the availability of properties - has dramatically increased the number of private renting households at risk of homelessness.
The fact that the PRS has come to play such an influential role in homelessness in England means that reform is long overdue, and makes it even more important to assess what impact new legislation might have. The proposed legislation comprises a mix of measures which could have contrasting effects. The bill increases security for renters, removing landlords’ right to evict a tenant without specific grounds (‘no-fault’ evictions), and increases penalties for landlords who do not fulfil their responsibilities. However, the bill also proposes a number of new grounds for landlords to end a tenancy, and notably does not increase notice periods for those households whose homes are repossessed by the landlord.
As a result, it is difficult to say whether the proposed changes will protect renting households from homelessness. On the one hand, the requirement for specific grounds to evict may reduce the number of households who require crisis intervention or emergency housing. Measures to criminalise blanket bans on renting to people on benefits may also make it easier for low income households to access PRS housing. However, short notice periods and an expansion in the routes a landlord can take to evict mean that private renters will still have the lowest security of the three main tenures. This means we may be unlikely to see the private rented sector’s role in homelessness decline any time soon, and it will be be crucial to monitor the impact of reforms closely.
As it stands, homelessness services will need to continue to support renters at risk of homelessness. Councils are under significant pressure, and in need of reliable crisis responses and the headspace, resources and evidence-based interventions to get upstream wherever possible. Crucially, while common practices have some promising evidence behind them, their true impact and cost effectiveness aren’t well understood.
That's why, to make limited resources go further, we are keen to hear from organisations across the UK working to prevent homelessness amongst private renters, and understand ‘What’s working?’ so we can start to better understand the relative effectiveness of interventions and identify the most promising innovations that can move the dial.
Get in touch at email@example.com if you are a council or service provider with a prevention initiative that you feel is working, and you’d be interested in working with the CHI and like-minded organisations to understand ‘what works’.
* Rob Anderson is Head of Implementation and Policy at the Centre for Homelessness Impact
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