I often read on social media and in articles, complaints about the private rented sector.
“Why should” I hear people say “some people make money out of other people by providing something as fundamental as a place to live?”.
Pointing out that if they rent a property from a landlord or share a property as a lodger, they are paying off the landlords mortgage for them and getting nothing in return.
Other than the right to live there for a time and then get kicked out (assuming section 21 remains in its present form) when the landlords want their property (or their room) back.
That’s true – but it’s hard to see how it can be changed.
Changing views on property rights
It’s a fact that people with no property are far more likely to want to challenge property rights. As soon as you own property, you feel differently about it.
Many people who own their own home and maybe a buy to let property or two, would very much resent very much any legislation which took away their rights, for example, to leave their property to their children.
However, those people may feel differently about the millionaires and billionaires who own massive areas of land – and consider that to be unfair and undemocratic..
The billionaires, on the other hand, also resent any attempt to take away their rights.
Billionaires though, by virtue of their ability to bankroll organisations (such as political parties) tend to have a disproportionate influence on affairs.
So I doubt we will be seeing soon any legislation which would, for example, look to break up large estates in the way that we have rules to prevent monopolies in the business world.
The options for housing the populace
Everyone needs a home. So what are the options?
- Home-ownership – either a freehold house or property on a long lease
- Renting from a social landlord
- Renting from a private landlord
- Living in a van or moveable vehicle
- Homelessness
Home-ownership
This tends to be viewed as the ideal in this country (although less so abroad where housing laws are different).
However, not everyone can afford to buy and many people don’t want to buy. For example, they may not want to be tied down or have the responsibilities and indeed expenses (such as repair and redecoration) which come from owning your own home
Renting from a social landlord
This was an excellent solution to the problem but sadly the greater part of our social housing stock has now been sold off under the right to buy.
Local Authorities and housing associations are in some places trying to increase their housing stock again. However, one wonders whether there is any point to this if they are just going to be forced to sell it off again?
Renting from a private landlord
Often this is the only option for people unable to buy or rent from a social landlord. Although it can be the preferred option for some people, and it is especially important and desirable for short term housing solutions, for example for young single professionals whose jobs require them to move frequently.
One of the reasons the Tory party in the 1980s wanted to encourage the development of a private rented sector (which they did by passing the Housing Act 1988 along with its right to possession under section 21), was because it was considered bad for the economy to have such a small stock of rented homes available (as was the case at that time).
The private rented sector at the moment is mostly owned by landlords who have just one or two properties.
The government would like to encourage larger commercial private sector landlords, but although there are some developments, on the whole, this does not seem to be particularly popular with businesses.
If the government wants to encourage this they will need to do more in the way of financial incentives and tax breaks.
Vans and moveable ‘Tiny Homes’
I have been reading quite a bit about the Tiny Homes movement in Australia and the United States (I wrote about it here) and have been impressed by the quality of many of the tiny homes I have seen. For example, as featured in the Living Big in a Tiny House website.
I think there should be a place for this. Many people find living in a ‘tiny home’ to be a liberating experience and the homes can be designed to be low carbon and even totally self-sufficient in renewable energy. Something we need to encourage with the approaching climate catastrophe.
Homelessness
The problem we seek to avoid.
So do we need a private rented sector?
I think the answer has to be ‘yes. Not everyone can or wants to own their own property. The social housing sector is far too small to satisfy demand and there are no other options other than perhaps the Tiny House solution.
The Government appear rather confused about what they want.
- On the one hand, they seem to want to look to the PRS to replace the social housing sector to house the homeless.
- However, on the other hand, the many recent and proposed legal and tax changes are discouraging investment in the PRS. Which if anything will result in a reduction of the properties available to rent.
Still, I suppose confusion in the housing sector reflects confusion in other areas of government and policy.
My feeling is that they should concentrate, in the short term, on sorting out the Brexit issue and leave housing until that is resolved. Then once we have a stable government and know where we are going Europe wise, proper consideration can be given to housing reform. This will also allow time for the more recent changes to bed down.
Ben Reeve-Lewis says
July 15, 2019 at 8:53 AMPrivate landlords have never been a popular social group Tessa. Back in the 19th Century rent strikes were common in London, where housing activist Charles Mowbray referred to them as ‘Land thieves’ and ‘House farmers’ and indeed rent strikes have occurred numerous times when rent levels start pushing people into poverty or conditions get really bad.
In Spain in 1931, 100,000 people went on a rent strike. In China under Mao in the 1950s there were mass killings of landlords.
Also, in British cultural memory are things like the Highland land clearances and infamous Irish landowners like Boycott and centuries of ingrained Norman feudal land laws where ownership is all. “Get orf moi land”.
Conversely nobody feels that way about social landlords, although their tenants often complain about poor service and disrepair but there isnt the sense that your wages are going to pay for someone else’s retirement or that you can be oiked out at any time on a whim.
And I would like to put paid to this daft pairing of ‘Renting’ and ‘Choice’. A small number of people, mainly the young, do choose to rent because of a flexible lifestyle but more people in the PRS have families and are over 60 and arent looking for flexibility at all and the PRS cannot ever meet the needs of this increasing group
Peter Jackson says
July 15, 2019 at 1:51 PMThe pairing of renting and choice is not daft. There are people who want choice and the PRS can provide what they want. They may be only a small number, but they do demonstrate a need that the PRS can satisfy best. The PRS does not have to be able to satisfy everyone to justify its existence.
There is another aspect to choice. If someone is paying a market rent and is dissatisfied with what they are getting they can move, just as they are free to choose other services. That requires some money of course, quite a lot in London, not so much around where I live (my rents range from £495 to £725 pm) I am actually trying to restrict the choice of my tenants by not raising rents for existing tenants, but they haven’t complained.`I can believe that such choice is restricted to a minority in London, but it is normal elsewhere.
K Pearson says
July 16, 2019 at 3:33 PMPeter didn’t you know that London IS the UK, nowhere else matters apparently. Yes, London has massive housing problems and apparently these government schemes have made some improvements there to prices. I can tell you that in windy Manchester where we’ve had stagnant rental prices for the past 15 years rents have now shot through the roof (certainly in my area), but how it affects London is really the only consideration.
Why not attach these regulations to properties in the relevant postcodes?
I also agree with your other points, well said.
Peter Jackson says
July 20, 2019 at 2:03 PMI grew up and now live a few miles from Manchestee. The average rent in Manchester has short up, but so has the quality of the properties. When I worked in Manchester on ly about 500 people lived in the centre. Now it is well over 30,000 and rising, and most of the new housing is luxury flats. Only a small amount of cheaper housing has been built.
The boom has reached where I operate, but there used to be a surplus of 2 bed properties so they has been little affected. Three bed ones have gone up a bit. I let a 3 bed semi with garage and conservatory this year for £725pm, which 2 years earlier had let for £625pm.
I used to live in Reading and let my former home after I left. I am now trying to sell it. The government made it easier to convert office blocks to flats Reading has a surplus of office space. Four blocks on the same streetch of road as my flat have been converted and a fifth iis in progress.That has caused a glut and rents and prices have dropped. With my last tenants I was making just £50pm above the fiized costs.When they chose to leave (for a new job) I put it on the market.
Different places have differing housing markets so flexible regulations make sense.
John smith says
July 19, 2019 at 3:08 PMExactly Ben. It is a daft choice. Poll after poll shows that people would prefer their own property. Yet we have people who so unbelievably biased who refuse to accept this.
hbWelcome says
July 19, 2019 at 11:19 PM“Conversely nobody feels that way about social landlords, although their tenants often complain about poor service and disrepair but there isnt the sense that your wages are going to pay for someone else’s retirement”
I think they do Ben.
I think there are many, many tenants who feel very angry about their poor social landlords and how they go on to retire on gold plated pensions for life.
They just don’t get columns in the Guardian to say it.
hbWelcome says
July 15, 2019 at 9:31 AMWorth remembering that most people don’t actually want to live in social housing. Rightly or wrongly it is seen as a sign of failure.
https://www.insidehousing.co.uk/comment/comment/the-stigma-of-social-housing-tenants-must-end-62227
Back in the day, people with any aspiration, fought tooth and nail to escape the social housing sink estates run by councils pouring other peoples money into it but who couldn’t actually run a whelk stall.
https://www.mirror.co.uk/news/uk-news/estate-of-the-nation-the-real-life-of-uks-789762
K Pearson says
July 16, 2019 at 4:51 PMSo true! I spoke to someone who’d (through necessity) recently moved into a social housing flat. It had bare boards on the floor, unpainted plaster on the walls and numerous other nasties I can no longer remember. It beggars belief they can get away with such shockingly poor standards. Private landlords would be rightly vilified for this.
Private tenants now days expect high standards, smart kitchens, decent quality carpets and regular redecoration for their rent money. People want to enjoy a more aspirational lifestyle whether they’re renting or not.
It’s a classic example of supply and demand. Because social housing is so scarce people will accept low standards to get a place. The less choice that there is in the private sector as these tax regimes bite the more landlords can charge for poor quality housing. The exact opposite of what the government claims to be trying to achieve.
If there is a large choice of rentals available for tenants to choose between, landlords will be forced to compete for tenants. That means providing higher standards, lower rents and a better service. When there aren’t enough properties and it’s tenants who are competing then rents rise and standards can drop because the choice to move on is greatly reduced.
If a market is oversupplied then prices drop. It’s a simple economic truth. Shouldn’t government policy then encourage growth in the rental sector to dilute prices?
The truth is property prices are not driven by buy to let. They’re driven by town planning & home building not keeping pace with population growth; and by a failure to decentralise from London and properly invest in effective, low cost transport links to other parts of the UK. There are still PLENTY of affordable homes outside London. People don’t look further than the end of their own noses though.
John smith says
July 19, 2019 at 3:02 PMYou are a proper liar aren’t you.. In the 50,60s and 70s the councils had a huge waiting lists for people who wanted to live in council housing. Guess why? These people wanted to escape the slumlords of those decades.
hbWelcome says
July 19, 2019 at 9:28 PM“In the 50,60s and 70s the councils had a huge waiting lists for people who wanted to live in council housing. Guess why?”
‘Cos the Housing Act wasn’t passed until 1988?
Peter Jackson says
July 15, 2019 at 2:53 PMThe normal answer to “Why should some people make money out of other people by providing something as fundamental as a place to live?”.is the same as is the question were about food or clothing. We don’t live in the Star Trek world of unlimited energy and replicators They are necessities but they don’t magically appear for free. Each has a cost. Someone has to pay that cost. You could buy a house, pay your own mortgage, pay for repairs and insurance etc. That requires accumulating the deposit and credit rating to get the mortgage. Alternatively you can rent That will likely be more expensive in the long run, but more feasible short term.
Barring some GRQ schemes which have largely been stopped since the credit crunch, having a rental property means having saved to build up some capital. That is very difficult on a low salary, but if you have an abve average one but spend like you have an average one it is not too difficult. A tenant is probably not aware of the self-denial that went into building up the capital The profit made after paying all the costs is the delayed reward for that self-denial
Of course sometimes people get money without working for it. I used an inheritance to help get me started, but I had saved seberal times more before then, mostly in pensions.
John smith says
July 19, 2019 at 3:05 PMWhen you are at the beach do you also take credit for the tide rising? You were born at the right period and got lucky that’s all.
hbWelcome says
July 19, 2019 at 10:46 PM“You were born at the right period and got lucky that’s all.”
Success is simply a matter of luck. Just ask any failure.
Peter Jackson says
July 20, 2019 at 1:34 PMI had some good luck and some bad luck. When I bought my first homethe mortgage rate was over 10%, and then there was the biggest house price crash ever recorded and I went into negative equity. I had put all my savings into that property. Buying your first home is a lot easier now than when I did it (though not as easy as in the years just before the cridit crunch).
My parents grew up during WW2 and rationing. They were fairly frugal and taught me to be so. That and being pretty good at my work are the main reasons for my success, not luck.
Martin Flavell says
July 19, 2019 at 12:23 PMSo true I can easily relate with it as i had lived in social housing flat from a long time. Private tenants now days expect high standards, smart kitchens, but the question arises do they deserve it?
John smith says
July 19, 2019 at 3:10 PMWhen you are charging 50% of their take home pay what do you expect.
Also you sound very a interesting character deciding what people should and shouldn’t be allowed to have.
hbWelcome says
July 19, 2019 at 10:04 PM“you sound very a interesting character deciding what people should and shouldn’t be allowed to have.”
What they can afford?
Your landlord taking you on with 50% income to rent ratio sounds pretty desperate.
Peter Jackson says
July 20, 2019 at 1:39 PM50% of take home pay pretty much only happens in London. Ntionalls ithe average is nearer 30%. Where I live and let properties it is about 25%.