Theresa May to offer more security for renters

A major shift in Tory housing policy in favour of people who rent will be announced by ministers this week as Theresa May’s government admits that home ownership is now out of reach for millions of families.

In a departure from her predecessor David Cameron, who focused on advancing Margaret Thatcher’s ambition for a “home-owning democracy”, a white paper will aim to deliver more affordable and secure rental deals, and threaten tougher action against rogue landlords, for the millions of families unable to buy because of sky-high property prices. Ministers will say they want to change planning and other rules to ensure developers provide a proportion of new homes for “affordable rent” instead of just insisting that they provide a quota of “affordable homes for sale”.

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They will also announce incentives to encourage landlords to offer “family-friendly” guaranteed three-year tenancies, new action to ban unscrupulous landlords who offer sub-standard properties, and a further consultation on banning many of the fees that are charged by letting agents.

A senior Whitehall source said: “We want to help renters get more choice, a better deal and more secure tenancies.” They added that the government did not want to scare people off from renting out homes, but offer incentives to encourage best practice and isolate the worst landlords. By emphasising the rights of renters, as well as trying to boost house building, the white paper will mark a turning point for a party that since the 1980s, and the first council house sales, has promoted home ownership as a badge of success, while neglecting the interests of renters.

The Tory manifesto for the 2015 general election spelt out plans for 200,000 new “starter homes” that could be bought by first-time buyers at 20% discounts, but said little about promoting the interests and improving the lot of so-called “generation rent”. Cameron also pushed the idea of getting people on the housing ladder through shared ownership schemes, an idea that is no longer such a priority. The white paper will be seen as part of May’s deliberate break with Cameron, and her drive to create a country “that works for everyone, not just the privileged few”.

Sajid Javid, the communities secretary, said: “We are determined to make housing more affordable and secure for ordinary working families and have a rental market that offers much more choice. We understand people are living longer in private rented accommodation which is why we are fixing this broken housing market so all types of home are more affordable.

“These measures will help renters have the security they need to be able to plan for the future while we ensure this is a country that works for everyone.”

Councils will be told to put more emphasis on rental schemes , particularly in towns and cities, while making it easier for “build to rent” developers to offer affordable rented properties.

The proportion of people living in private rented accommodation has doubled since 2000 and ministers will accept that housing costs “are hurting ordinary, working people the most”. The average couple in the private rented sector now hands over roughly half their salary to their landlord each month and 2.2 million working households with below-average incomes spend more than a third of their incomes on housing.

Kate Webb, the head of policy at Shelter, said: “Ordinary families up and down the country are struggling to keep their heads above water with sky-high rents and short-term, unstable contracts which can make it nearly impossible to save and plan ahead.

“It’s vital the government look to fix this by introducing long-term contracts of five years or more so people can plan their lives and feel safe.

“If the government really is serious about fixing this problem at its source, then they quite simply need to build more homes .”

Ministers insist that they will not allow more building on the green belt but will stick to existing rules that this should only happen in exceptional circumstances. They will, however, say that developers must build on land for which they have obtained planning permission, to help reach their target of building one million new homes by 2020.

John Healey, the shadow housing minister, expressed scepticism. He said: “There is a huge gap between Tory rhetoric and their record on housing. For instance, last year the level of affordable new houses built hit a 24-year low despite their promises. Theresa May has been in the cabinet for seven years and last year they resisted every Labour effort to bring in secured tenancies for people in the rented sector as well as deal with rogue landlords and ensure decent rental standards. The Tories will be judged on their record not their rhetoric.”