For a long time we have thought of the private rented sector as the most disorganised part of the housing market. Most properties were let by small landlords who owned one or two properties. Very few landlords belonged to any form of trade association, although around half let their properties through letting agents. On the demand side, most tenants held six month tenancies and many tended to be young, mobile and poor. Quite a lot of tenants lacked familiarity with their rights or the incentive to enforce them, particularly in the absence of any legal barrier to retaliatory eviction. A few localities had established groupings of private tenants, but such organisations were most notable for their rarity. Information was relatively sparse and circulated with difficulty: so reputation effects, on either side of the market, were weak.
These characteristics present considerable regulatory challenges. The levers for enforcing rights and obligations are weak. The consumerist model is most inadequate in precisely those subsectors of the market where rights are most likely to be violated. Command and control regulation around standards relied upon local authorities for enforcement, and this function was perennially under-resourced.
Yet we are witnessing a reconfiguration of the landscape of private renting that has the potential to completely transform the nature of the game.
The growth of the private rented sector is probably the most notable change in the housing market over the last decade. Alongside numerical growth we have seen a change in the sector’s composition. The increasing numbers of families living in the sector for more extended periods of time has put pressure on the government to improve the terms upon which rented property is occupied. Hence we have seen recent announcements from CLG regarding the scope for increased use of longer tenancy agreements.
On the supply side we are seeing more concerted policy pursuit of institutional investment than has previously been the case. And institutional finance is linking up with management by registered providers to provide private landlordism of a larger scale. This sort of configuration means that landlords providing market rented housing will, if nothing else, be plugged in to some well-established networks.
So you could argue that the supply side is on its way to becoming more organised.
But perhaps the most interesting parts of the picture are the regulatory possibilities that are opening up for organisation among tenants. Longer term residence in the private rented sector changes the incentives facing tenants to enforce rights. More families living in private renting means a greater number of older adults looking for settled accommodation, with greater incentive to ensure their accommodation is satisfactory.
The Observer carried a piece today entitled Landlords and agents in the line of fire as tenants launch fightback. That title is rather overblown, given that much of the article is just a restatement of some of the basic legal rights of tenants. But it does offer several examples of tenant organisations that are emerging. Some of them are locally focused, but some have national aspirations. And local organisations are linking up to form broader coalitions.
A further key part of this story is the role of social media in reducing the barriers to organisation and information dissemination. One of the long-standing problems in regulating renting has been a lack of appropriately low cost ways of identifying members of a fluid and transient tenant population. Now through liking Facebook pages or engaging with other media interested tenants effectively identify themselves.
It is unlikely, however, that these moves to organise are simply a product of the changing profile of the tenant population. As the title of the Observer article suggests, there is also a strong sense of self-preservation. There is a feeling that in high pressure housing markets the balance of power lies too squarely with landlords and agents, and that routinely behaviour on the supply side is nothing other than exploitative. Indeed, recent news that some landlords are returning to the discriminatory practices of the 1950s and 1960s suggests that problems of shortage are not only acute but also breed antisocial behaviour. And not from the tenants.
Better organisation may be a means by which tenants can counter this worsening situation.
Perhaps the most intriguing snippet in the Observer article is the proposal by The Tenants’ Voice that their new website will “include a Trip Advisor-style rate and review system where tenants can provide feedback and share their experiences about both good and bad landlords and agents”. I mentioned this initiative in a post a while ago. It is a proposal that comes with some problems. But it is one that further demonstrates the potential of technology to transform the way in which the market functions. Publicly available information has the potential to substitute for more conventional, and generally ineffective, enforcement mechanisms as a disciplinary mechanism to be applied to landlords.
We currently face the need to rethink the characteristics of house purchase decisions because the web has dramatically lowered the search costs associated with the process. Perhaps in a few years’ time we will face a parallel challenge to rethinking our understanding of private rented sector decision making. If so then that would be a positive sign, because it would mean that the tenants have managed to marshal information in a way that allows at least a partial fightback.
Image: Rent Strike Protesters in Brooklyn, NYC, by Michael Fleshman via Flickr.com under Creative Commons
I have been helping out a number of tenant’s groups in London this past year or so, including the Hackney group- mentioned in the article. I do this because I think there is scope for them to be a new force of influence and what I am noticing across the board is the changing profile. They tend to be younger professionals, perhaps the group who 8 years ago would have been buying their first property. They are media and internet savvy and more articulate than I’ve seen in the past, so I am genuinely interested as to why you think it is unlikely that their changing profile would be a driver for this change as this is what I think it is solely down to.
Hi Ben, thanks for your comment. Interesting to hear of your experience working with this type of tenant group. I think the point I was trying to make was that the change in the tenant profile is absolutely key, but the need to act/organise and the incentive to do so is intensified as market conditions become more difficult and landlords/agents are both charging more and more for the same (quite possibly poor) or deteriorating service. The changing tenant population means that tenants now have more/different resources they can draw on to seek to address this. Greater tenant organisation may have happened anyway but market conditions accelerate the process. That’s the hypothesis anyway.
Ah I get you.
What I have noticed as I’ve been helping out, that has surprised me, is the lack of politics. back in the 80s or 90s these groups would have been thinly disguised platforms for SWP and Militant, in fact even now at meetings I keep listening out for the give-away rhetoric haha Old habits die hard.
I remember tenants groups of old that I dealt with tended to be people moaning about their broken door or leaky tap but the current crop are concerned with the law and lack of regulation for all tenants and this is what I find interesting.
I did a presentation at the inaugural meeting of the Islington group, where Jeremy Corbyn bigged-up his private members bill on regulation and I changed my tack mid speech, which was going to be about the possibilities available for them to join up with other London tenant’s groups and form a union when it suddenly hit me that this idea didnt necessarily match where they were coming from and might alienate people who dont see them selves as political campaigners.
There was a short lived tenants group that evolved into the Islington one all renting from the same landlord in the Caledonia Road near Kings Cross called the “Cally Cows” who formed in response to comments made by their landlord on a TV programme where he referred to his tenants as “Cows to be milked”.
The problem they all seem to face however is membership. One lady told me how she was handing out leaflets to encourage sign up and one person took it and thanked her and said he would give it to a friend who was homeless. Which is a bizarre connection to renting