Renting

News from Siân Berry: From housemates to co-owners – a new way out of London’s rent trap?

06 November 2018

People already renting together in London could win the legal right to set up a co-op that buys their home at a discount, if the Mayor of London got behind proposals for a new ‘right to co-op’, according to a new report. 

Research, commissioned by Sian Berry, also shows how the Mayor could give practical support to people who want to buy out their landlords and set up a co-op under current laws. [1]

She says this could fill a gap in current policies for community-led housing, which focus on groups wanting to build new homes only, and help create new secure homes to benefit renters let down by the government’s flawed consultation on longer tenancies. [2]

The new report, A Right to Co-op for Private Renters, shows how if people switch from renting from a landlord to a co-op they control, they would gain rights and protections rarely on offer in the private sector, including more affordable rents, controls on rent rises, and secure tenancies.

Sian Berry says:

This new research looks at a right to buy for private renters, but finds only the richest 20 per cent of renters could benefit from this, and these homes would not stay permanently affordable once owned in this way.

Focused on house-sharers, a right to co-op is more viable and would support more people to win more control over their homes. Co-ops already exist but they’re rare and places are in very high demand. 

This idea could help a large number of long-term renters who want more security. The report shows 5,000 homes a year could become co-ops.

The Mayor’s Housing Strategy puts a high priority on getting a fairer deal for private renters, and he is supporting community-led housing groups to build new homes, but he shouldn’t ignore the potential for co-ops to take over existing homes to create more truly affordable homes. 

In a co-op you don’t have to worry about your whole life being tipped upside down because your landlord suddenly wants to sell, or doubles your rent. Co-ops focus on people not profit and the Mayor should be doing all he can to help them take over more homes in London.


A centre right think tank has recently proposed a scheme to give a tax break to landlords who sell properties to sitting tenants if they split the gain with their renters, but due to London’s overinflated house prices this measure would help only a tiny fraction of higher earning renters, giving help towards deposits of less than £20,000. [3]

The new report, A Right to Co-op for Private Renters, examines the benefits of a full ‘right to buy’ style discount of up to £103,000 and finds that even this would only be able to be used by the top 20 per cent of earners in privately renting households, and benefit only these individuals. 

In contrast, the Right to Co-op would help the worst-off tenants in houses of multiple occupation and would permanently remove homes from the private market and keep them affordable for good.

The report makes several recommendations for steps the Mayor could take under current legislation: 

•    Promote the Community-Led Housing Hub to renters for support in setting up a co-operative and buying a suitable home, including advertising on the TfL network.
•    Provide low cost five-year loans to help co-ops buy properties. After those five years the co-op would have gained sufficient equity in the property, and have a financial track record, to be able to secure better deals from ethical and other lenders.
•    Offer capital grants to co-ops that are able to make a Living Rent or a Social Rent viable.
•    Work with existing housing co-operatives in London to leverage their considerable asset base (worth hundreds of millions of pounds) and their cash holdings to support new co-operatives.
•    Provide loan and grant funding through his Innovation Fund and the Community Housing Fund for property improvements and extensions.

The latest estimates of housing need in London show that, each year, at least 31,000 low-cost rent and 12,000 intermediate rented homes are needed over the next 25 years. Converting existing full market-price homes to affordable homes could contribute to this need and help improve life for thousands more private renters. [4]

The Kindling Housing Co-operative in Oxford is an example of a successful co-op of this kind, highlighted in the report, which has bought its first house recently. http://kindlingcoop.org/ 
Kindling says:

Kindling Housing Co-Operative created a financially stable, accessible, and safe home for people in the most expensive housing market in England.  We couldn’t have done it without other co-ops and the support networks they create. 

Co-operatives are an essential part of the solution to this country’s housing crisis. We need our representatives—on council, in cities, and in Parliament—to put their weight behind housing that supports people.

Notes to editors

[1] A Right to Co-op for Private Renters, Tom Chance and Samir Jeraj, Oct 2018, https://www.london.gov.uk/sites/default/files/2018_10_31_a_right_to_co-o...

[2] Overcoming the barriers to longer tenancies in the private rented sector, Ministry of Housing, Communities & Local Government, Jul 2018 https://www.gov.uk/government/consultations/overcoming-the-barriers-to-l...
[2] Make a house a home, how to give private renters a chance to buy and encourage, Onward, Oct 2018 http://www.ukonward.com/wp-content/uploads/2018/10/061018-Make-a-House-a...

[3] What are London Renters thinking? Sian Berry AM, Oct 2016 https://www.london.gov.uk/sites/default/files/sian_berry_renter_survey_r...
Sian Berry’s Big Renters Survey, showed three-quarters of renters had problems with repairs. Lack of security of tenure makes life a misery too, with nearly half of renters having to move when they didn’t want to.

[4] Sian is supporting the campaign by Generation Rent, New Economics Foundation and other housing campaigners to abolish Section 21 of the Housing Act which allows landlords to evict tenants without reason. http://www.generationrent.org/end_section_21

[5] The 2017 London Strategic Housing Market Assessment, Greater London Authority, Nov 2017 https://www.london.gov.uk/sites/default/files/london_shma_2017.pdf
 

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