I have just been listening to Money Box where the subject of buy back and lease was being discussed. It reminded me of something I have been meaning to post about for a while and never seem to get round to.
I now own my own home and have done for a few years but between 1992 and 2004 I lived in lots of different sorts of rented accomodation, both shared and on my own, houses and flats so I have quite a lot of experience of the rental market from a tenants perspective.
I experienced a number of negative things during my time renting. Here are a few of them:
- Several times I had to chase the return of my deposit, often taking months and portions of it were kept for usually spurious reasons. I understand that there is a deposit protection scheme these days but apparently, even though they are legally obliged to use it, not all landlords do.
- In the latter years it was usually written into the contract that the house/flat had to be fully professionally cleaned from top to bottom (often costing hundreds of pounds). Cleaning it yourself was not even an option. It always felt like a scam this as the agencies would only accept certain cleaners in the area as ones they were happy with and I always wondered what sort of "arrangements" they had between them.
- Of all the rented accomodation I lived in, there was not a single one where I would have been allowed to keep a pet. I did not have one at the time (although one of the main reasons I did not was this restriction). I do have a dog now I own my own place. I am not saying you can never find a place that will allow this but it seems that "no pets" is the default position for the majority of privately rented properties. Just as an experiment one time I did try negotiating on this before I moved into one place but they absolutely refused to budge.
- I had unscheduled visits from landlords/ladies even though they are supposed to give 24 hours notice and come at a time convenient to you.
- One place I lived in, the landlady was pulling a scam with a mail order company by getting trial CDs delivered in fake names, getting her sister to pick up the mail from our house and then denying all knowledge when the threatening letters started arriving. This could have affected our credit rating.
- Many times I had appliances break down and either they were not fixed or replaced, or the repairs took a very long time to happen.
I could go on but the point I am trying to make is that there are certain compromises you make when you decide to rent privately. You get the freedom to move at fairly short notice with no ties but you have to put up with a lot of crap (my list is fairly tame compared to some stories I have heard) and of course you are paying somebody else's mortgage off and making them rich at your expense.
The worst thing however about privately renting in my view is the lack of security of tenure. In two of the places I rented, I was forced to move out on the whim of the landlord. The worst example of this was a lovely flat I lived in where I was very happy. During my time there I got made redundant from my job. Now I work in a highly skilled profession and there was no doubt I would get another decent paying job in a short while (it took me 2 or 3 months in the end - not bad). I wanted everything to be above board and because I would be claiming housing benefit I thought I owed it to the landlord/agency to inform them of this even though I subsequently discovered there was no legal obligation on me to do so. Big mistake. The first thing that happened was the landlord insisted on the next 3 months rent in advance in a lump sum. I could cover this because it amounted to roughly my redundancy payment. However 3 months later the landlord served notice of eviction on me. By this time I had already started my new job at the same salary as I had been on before but they weren't interested. I was out. I loved that flat and would have been very happy to stay there for years, until I had been in a position to buy my own property which was not to happen for another 3 years almost.
To be honest, the stage of life I am at now, I would have bought my own house by now anyway but one of the things that spurred me on was lack of security of tenure. It is a big upheaval, and expensive (not to mention all the hassle of writing to 15 different companies to inform them and half of them getting it wrong) to have to move house every year or two and to be in a position where, once your initial period of 6 months or a year is up you are not sure when you might be forced to move out of your home was, in the end not something I was willing to put up with any longer.
It seems to me that there are 3 broad areas of residential situation in this country. If you are very or quite poor then you can live in council accomodation usually with security of tenure which is often effectively for life. If you are better off but perhaps younger or in a situation where you can't be tied down, or cannot afford to buy a house then the only realistic option open to you is to rent privately with very little security of tenure. The third category and the one that I am now in are home owners/occupiers who, as long as they keep up the payments on their mortgage have security of tenure for life.
I have always found it interesting that the consequence of the above 3 broad areas is that both the poorest, and the most well off in society have security of tenure whereas those in the middle as I was for many years have very little or none.
The reason I think this is worth raising now is because one of the major drivers of the credit crunch has been the so called "sub-prime" mortgage market. Politicians and commentators have been queueing up to castigate the banks for lending to these people and I do think they went too far, but one of the reasons that the market existed to go too far with in the first place is because of the endemic problems with renting in this country.
I am not an expert on the intricacies of what lie behind the situation around renting in the UK but surely there could be a rebalancing to give a much stronger security of tenure. Some relatives of mine lived in Holland during the 1980s and they still maintain strong links with the country now so I have been over there a number of times over the years. I know people over there find our obsession with purchasing our own homes in this country quite odd. However I knew a woman over there who was in her late 20s with a child and privately rented a beautiful flat with 3 bedrooms in a very nice area and she was paying the equivalent of £150 per month. This was in 1991 so it would obviously be more than that now but the crucial thing for me was when I talked about what her longer term plans were and when she would be looking to buy somewhere. "Why would I want to buy somewhere when I can stay here?" was her response. The situation she was in there of course was that she had security of tenure.
Hopefully one of the things that will come out in the wash during the inevitable post-mortem that will follow the current recession is a root and branch reform of the private housing sector so that people are not coerced into buying a house just so that they can be sure of where they will be living next month.