The Right to Rent
A private landlord, who has asked to remain anonymous, argues that high rents are a result of government policy, not individual greed.
Understandably, private landlords get pretty short shrift from tenants. No-one likes paying sizeable chunks of their income over to an individual or company who can, if they complain too much, simply evict them.
But to a large extent, current high rents and an imbalance of power are not really the fault of the landlord. It’s down to legislation from successive governments. Secure tenancies for unfurnished properties where it was difficult or impossible for a landlord to evict a tenant were abolished, along with a requirement that suitable alternative accommodation had to be available before recovery of possession could take place. Rent officers and rent tribunals which determined ‘fair’ rents and protected tenants from eviction were abolished.
Plus, from 1919, there was council housing. Before the Housing and Town Planning Act of that year, three-quarters of all homes were privately rented, and almost all others were in owner occupation. The Act provided government subsidies for local councils to build half a million new homes for rent. Over the next 60 years – up to 1979 – nearly seven million council houses were built.
By 1978, immediately before Margaret Thatcher came to power, a third of all homes (32%) were rented from a local authority and just 14% from private landlords – the rest were in owner occupation. Her decision to give council tenants the right to buy – coupled with forbidding local authorities from reinvesting the proceeds in their own housing stock – meant that more than two million council houses disappeared from the rental sector.
Today fewer than 20% of people have access to ‘social housing’ (now almost invariably from a housing association) while the number of people forced to rent from private landlords has risen to 20%. In numbers terms it means that, in 1979, there were 6.5m council homes, compared to 2.2m today. This forces 4.4m households to rent privately – twice as many as even 15 years ago.
The knock-on effects are obvious. There is far less social housing available and demand for private rentals exceeds supply, so rents increase to what the market will bear – virtually unchecked by competition from the social sector. This has been coupled with ‘anti-landlord’ legislation – the key piece being preventing the offsetting of mortgage costs against rental income for tax.
An indicative look at the figures show why rents are so high. In Hastings, buying a two-bed flat would cost around £350,000. The interest on a (5%) mortgage would be more than £1,400 a month. The potential rent for two-bed flats locally is around £1,000 a month. So it’s already technically uneconomic. Plus landlords have to budget for repairs and redecorating and for gas safety certificates and servicing on boilers and appliances. Then there’s the cost of periodic electrical safety and energy performance inspections. Of course tenants should have the protection of these, but the costs will invariably be passed on to the tenants in their rent. Many landlords may agree with tenants that ‘no fault’ Section 21 evictions are completely unjust. But this Tory government has consistently broken its commitments to remove them.
Being a private landlord is, in the end, effectively running a small business. Yes, it is uncomfortable ‘owning’ someone else’s home, but on the other hand you are actually providing someone with a roof over their head.
I believe the greatest evil done to housing in Britain in a century was Thatcher’s right to buy policy. It needs urgently to be reversed. Local Authorities must be given the resources – and the obligation – to return to providing social ‘council’ housing for anyone who wants it.
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