Are we seeing a new type of housing need?

by | Dec 17, 2019 | Safer Renting

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I was genuinely fascinated to read about a new concept in rental living reported in free London newspaper, City AM, where prospective tenants choose to pay through the nose for small living spaces that come without bills or the necessity for cleaning and offer a more communal experience, with plumbed in activities, such as yoga classes and mental wellness sessions.[1] Is this where certain groups of younger, wage earning tenants are looking for their housing needs? If so I wonder if contemporary renting laws, kickstarted with the Law of Property Act 1925 fits with this trend, if trend it be.

The past 100 years of rental legislation has been both protective and punitive in nature. Each law arising in response to particular social issues of the time. Some of it aimed at improving property standards and some of it drafted to protect the unwary from the unscrupulous but are Millenials and Gen X folk creating a new sub-strata of housing need, where a century of legislation is viewed as unwanted, Nanny-state interference?

In a recent report, backed by the Tenancy Dispute Service, property investing guru Kate Faulkner, made the case that many renters may prefer the flexibility of short term lets and that the current market, with its fixed term tenancies and s21 notices is what the majority of renters actually want, when she says.[2]

“For those that are renting, even if they would struggle to afford to buy, renting gives them the option of flexibility at an age in life when things are not ‘assured’ as friends and relationships can come and go and, of course, in this day and age so can jobs and careers, particularly with the rise of the ‘gig economy’”.

A year or so ago Safer Renting were involved in complaints made about Lifestyle Club London, a crew who ended up being prosecuted by the London Borough of Camden[3] The impetus behind their business model springs from the same notion that renters don’t necessarily want to be tied into contracts governed by standard landlord and tenant law and would prefer to be part of a ‘Funky’ club, where every member peers raffishly over the tops of their sunglasses, sips a flavoured Gin through perfect teeth before nipping off to a Pilates class, sporting a pair of Dr Dre Beats.

Lettings where deposits called “Joining fees” and rents re-labelled “Monthly membership contributions”.

When I was investigating our complaints about LCL the focus was firmly on landlord and tenant law breaches but I noticed, that even when prosecuted by Camden, LCL still fought their corner, threatening appeals and insisting that their aims were altruistic and simply reflected the market forces relevant to their client base. They told the Guardian:

“We simply came up with a new concept which some might call questionable but, likewise, so could the practices of Airbnb and Uber.”

Property Guardian business models are yet another example of housing providers attempting to create new ways of operating that aren’t strait-jacketed by the law. Are we actually seeing the birth of a new movement in housing need and if so, should parties in agreement be allowed to side-step the legal requirements?

In actual fact, it has always been the case that a landlord and a tenant can mutually agree to create arrangements where there is “No intent to enter into a legal relationship”. The problem is, as any frontline housing advocate will tell you, when you get involved with complaints, what the landlord or agent insists was the understanding between the parties is rarely upheld by the person renting, who took on the property with an entirely different understanding.

I’ve yet to see a case where both sides agreed on what the arrangement actually was, and the contracts trending at the moment are based on one sided denials of the legislation governing the PRS, where the benefits are all slewed towards the landlord or agent rather than the renter, who is most often completely unaware of their rights and what history might have caused them to be in place.

Questionable housing providers are similarly ignorant of renting laws but will interpret their limited understanding to suit their own financial ends, where the profit motive overwhelms any other considerations and renters standing up for their rights are seen as troublemakers, or “Not with the programme”. Is there a demographic group out there who prefer lifestyle flexibility over security and protection? I would imagine so but I would have thought they can only represent a small number with a very specific shopping list.

Families and older people, who by far make up the largest part of the PRS value security and safety over flexibility and that century of laws is there for them. Lifestyle clubs, Property Guardians and short term no commitment lettings offer nothing to this market.

Kate Faulkner’s report asserting that many people prefer the flexibility of renting is merely the latest addition to an irritating narrative, driven by an optimistic investor’s view of what the PRS is about and who it is for, that we see with depressing regularity and which feeds directly into mainstream political attitudes about how ‘Dynamic’ the PRS is, evidenced solely by how much money investors can make out of it and further, how a weakened protective legislative framework is crucial to maintaining and promoting that dynamism

It’s the same narrative that causes the landlord press to regularly pronounce that statistics showing that rent levels have risen evidences a ‘Buoyant market’, a phrase any sensible tenant would understandably read with dread.

Dubious outfits like LCL simply jump on the bandwagon, as do firms like Hostmaker, who in September 2019 were forced to remove ads from London Underground,[4] extoling the virtues of short term, AirBnB style lettings as the future of renting for both landlords and tenants, a future unencumbered by fripperies like the Protection from Eviction Act, the Housing and Planning Act, Consumer Protection from Unfair Trading Regulations. You know? That kind of trivia!

Are these new rash of casual renting arrangements merely reflecting the evolution of a new form of housing demand or is it the same old dodgy landlord bullshit, tarted up with a fancy website and graphics of shiny young people downloaded from Shutterstock? If parties to an agreement should be allowed to contract out of housing law then which parts of it? What bits should still apply? Who gets to decide? What is the machinery in place if there is a dispute?

These are very real questions but in their enthusiasm to make money from renting, too many of this new crop of entrepreneurs seem to think “Blue sky thinking” is all you need.

By Ben Reeve-Lewis






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About Cambridge House Safer Renting

The Cambridge House Safer Renting team present the ‘go-to’ blog on the world of the Shadow Private Rented Sector.

We monitor the world of rogue landlord and agent activity, publicise developments, circulate innovative ideas, keep readers abreast of changes in laws and regulations, raising awareness of criminal trends and scams, celebrate successful actions and interview people working in the field, connecting up anyone involved, from tenants and their advisers, to enforcement officers, lawyers and journalists.

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