Friday, November 9, 2012

DIGS: Ending laissez-faire in private rents!

DIGS, supported by Hackney Unites, is calling for the end of the unregulated private rental market in Hackney and their aim is to take the issue all the way to central Government and across the whole of England.

DIGS is made up of private renters offering information and support to other Hackney renters and they launched their first public meeting on Thursday 20 October 2012 at the hub of social change in Hackney – the CLR James Public Library.

This event provided the opportunity for Hackney’s tenants who currently live in private and largely unregulated housing to come together and engage with a strategy for change.

The momentum for change has been simmering for many years beginning with the loss of rent control in 1988.  Back then rent prices were based on a formula linked loosely to average income.  Today, rent costs are governed by ‘open market’ forces and this has led to rent increases that often outstrip the average working person’s income. 

Another driver for change is the plethora of newly released reports by agencies either directly or indirectly linked to private housing and the need for London to have affordable rents.  The number of working households claiming benefits has continued to rise since the recession began (2008).  A report by National Housing Federation found that in May 2012, housing benefit claimant by those in work rose to 903,440 and that this has doubled since November 2008.

Not only are more people seeking financial support with their rents but private rents have also increased.  This push to jack up the rents is linked to a range of factors – some are the byproduct of the recession and the contentious banking activities while others are for sheer profit.

Collectively, the negative effects of high and excessive rents are being felt by our residents and with the support of Hackney Unites and DIGS, many have begun the processes of organising not just themselves but making links across other London boroughs and globally.

The meeting was opened with Ben Reeve-Lewis, a Tenancy Retention Officer from London’s Lewisham borough.  Not only does he write extensively on the subject but he has also been involved with the cabinet in developing private rent housing policies.

He covered many issues but in particular was the ‘By to let’ mortgages which sometimes have conditions attached about how long a tenant can stay.  This contributes to Hackney’s transient community and impacts upon those who have to leave their homes simply because ‘their time is up’.  He provided an overview of the business of estate agents in private rental markets and the issues the unregulated area brings.  He also looked at the financial impact upon those people going through estate agent’s doors who are charged extortionate rates. 

DIGS also found that Foxtons currently charge £420 as a fee and for a minimum wage earner (£6.19 for 37 hours per week is £916 for the month), this amounts to just under half their monthly income; and this is even before they have a home and tenancy.

Clearly there is lots of money, politics and power at stake in private rental markets and when in 2009 the Office of Fair Trading (OFT) went to the High Court under the Unfair Terms in Consumer Contract Regulations of 1999, claiming the fee Foxtons charged landlords to find tenant was unlawful, some landlords effectively joined Foxtons and fought back and lobbied against the OFT’s work. 

Ian Duncan Smith’s observations (October 2012), that the Government would like to keep all those under twenty five at home with their families appears to be the Governments half hearted and desperate attempt to engage in the debate by ‘freeing up the demand’.  As most young people cannot afford the high costs of private rents even when they do apply for benefit, these measures are unlikely to have the desired impact. 

In fact the IDS policy may have the unintended consequence of increasing public spending in the Children and Family Services (CFS).  For example, in a family where young people have simply out grown the family unit and where relationships have broken down, we may see an increase in children nominating themselves into care, where under section 17 and 20 there is a duty to house and support young people into a home.

Private rental debate is impossible to discuss without referring to Housing Benefit (HB) changes and the wider picture of the Government’s financial strategy of: Austerity.  HB will change to Local Housing Allowance (LHA) and this will see different London Boroughs offering differing financial support to different age groups. 

HB changes are also mechanisms for the Government to drive down the welfare budgets by £20bn by 2014.  According to Institute of Fiscal Studies (IFS) this austerity strategy is pushing 80.000 children back into poverty.  Even the IMF global outlook report states that for every pound cut, Gross Domestic Product (GDP) will contract by up to £1.70. 

Based on reports like this, many have argued that the ‘austerity’ policy is linked to our country’s continued lack of economic growth and will have a debilitating effect on the welfare changes.  Many young people, already living happily in private rented accommodation will have to leave.  Working families already suffering from the other impacts of Government cuts; if they cannot find the money to ‘top up’ their HB to their landlords, they will have to leave too.

What has become clear is that there is a need to address private rental markets to mitigate some of the concerns noted above.  Whether this be through a Licensing scheme such as London Borough of Newham’s approach or developing an Accreditation for landlords thus developing their social consciousness beyond the short term high profit mentality that sometimes governs private landlord’s motivations into the renting markets.  Or through ‘negative registrations – where those landlords that have been found to breach their contract between themselves and tenants have their details held by Hackney and this is used to help future tenants. 

Whatever the outcomes one objective of any campaign in London should also include the achievable objective: ‘removing letting agents fees’.  And should we need to know how, we can look north to Scotland who have achieved exactly that!

With 21,000 private rented properties in the Borough and with DIGS’ developing local campaigns and linking into all of those citizens, what is clear is laissez-faire in private rents is ending.

If you live in private rented accommodation and need information and support, in the first instance please contact Hackney Housing Options tel 020 8356 2929.
DIGS can be contacted on: or
Further support or advice is available from: Housing Lawyers) (Hackney Community Law Centre) and National Private Tenants Organisation at

By Teena Lashmore

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