UNISONActive is an unofficial blog produced by UNISON activists for UNISON activists. Bringing news, briefings and events from a progressive left perspective.

Friday, 3 June 2011

What’s our policy on the private rented sector?

Much of the discussion about housing on the left inevitably concentrates on what we don’t have- a thriving public rented sector, and then inevitably concentrates on how we get back to that, and in more subtle discussions how it can be improved. There is however a problem with this approach.

It ignores the fastest growing sector of the housing market, probably the one that large numbers of our members probably rely on- the private rented sector. But the new private renting is all around us, in the TV property porn programmes where landlords talk proudly of their portfolios and yields, to the Sunday qualities where it is recommended as a source of that pension pot for the future. There is little discussion however of the needs of the tenants or indeed or the morality of such transactions.

Here’s a typical example from the Guardian June 1st.
“Buy-to-let confidence surges Landlords are showing increasing optimism about the buy-to-let market, with 48% believing it is a good time to invest and just 1% thinking now is a good time to reduce their portfolios, according to a survey from LSL Property Services, which owns the UK's largest lettings agent network.

Following a Halifax survey on Wednesday which claimed two-thirds of potential first-time buyers have no realistic prospect of owning their own home in the next five years, LSL said 86% of landlords surveyed are planning to maintain or expand the size of their portfolios over the next 12 months, with the majority citing growing demand for rental accommodation as the main reason for the increase in confidence.

LSL spokesman David Newnes said: "Optimism among landlords is not only buoyant, but increasing. Soaring rents and climbing demand from frustrated first-time buyers are not only making buy-to-let an attractive proposition for new property investors – but are encouraging existing landlords to grow their holdings before property prices increase once more (Guardian June 1).

The Council of Mortgage Lenders now estimates that there are over 1 million buy to let mortgages held in the UK with a value of £122100 million. That’s a lot of buy to let mortgages.

Previously the private rented sector for most people was a sector of transition. For young people leaving home for education or a job, a bedsit or a shared flat was the first step on the housing road. For young couples setting up home together it was the transitional step to a council home of your own.

But then the great Thatcherite give away began. Public investment in the bricks and mortar of public sector housing was given away at bargain basement prices in the 80’s wave of easy credit, depleting the public sector stock and fuelling the credit boom. Looking at the changes to the tenure mix across the UK, the result has been a drop not only in the percentage of public sector stock compared with the total housing stock, but a fall in the number of public sector properties available. Meanwhile the private rented sector has mushroomed.

Add to that the recent credit crunch, with headlines about the average age of a first time house buyer rising to 43 and needing a deposit of twice the average salary and the demand for the private sector is understandable.

So what about the tenants? Shelter in its evidence to the Review of Private Renting in England (2008) noted
“BTL has brought numerous new landlords into the sector many of whom are inexperienced.

• BTL has facilitated an increase in speculative investment in the PRS making the supply of housing to the PRS potentially more vulnerable to the impact of market downturns or changes in the tax regime.

• BTL has at times had a negative impact on communities, particularly those in which BTL properties represent a significant proportion of housing."

“Problems identified by the research in the Thamesmead area included an increase in the transience of tenants so that many did not know their neighbours, a failure to keep the estate clean because they did not feel part of the resident community, as well as more specific problems such as apartments being let out as a base for 24-hour weekend parties”.

“Overall Shelter is concerned that allowing an over-reliance on BTL to fill the gap which a strategic approach to supply might otherwise have occupied, has had unintended consequences. While there may have been some gains in terms of the numbers of properties available to rent, BTL has also created a new set of challenges that we must now address. We consider, that for too long it has been left to individuals to choose whether or not to invest and become landlords, and then to the discretion of those individuals about how seriously they have taken their role as housing managers.”

Official evidence often tells a polite story. Tenants tell a story of absentee landlords who are not contactable in an emergency, of repairs delayed or not carried out, of deposits charged and not returned, of buildings left in a dreadful stare of disrepair. Communities where BTL has become prevalent tell of nightmare tenants with no regard for neighbours and anti social problems to which the landlord at best turns a blind eye.

There are 700,000 landlords in this sector, of whom 2.2% belong to any kind of professional association.
Karl Marx was in no doubt about the parasitical nature of the renter class, who play no productive part in the economy but make money purely from ownership of property, and the revenues arising from it- rent. But short of taking all RTB into local authority control (chance would be a fine thing) then this sector will be around for some time.

Our members are part of it. - as tenants. At this moment there are no easy answers to their problems. Should all landlords be compulsorily registered and signed up to a code of conduct? Should the tax regime that makes RTB so attractive be changed? Should local authorities be able to buy up properties on the open market for letting? Why is it easier to get a mortgage for a right to buy mortgage than a first time buyer? Should tenants in such properties have the right to buy? Why not? And this article hasn’t even asked the necessary questions about the housing benefit regime.

In the meantime can we stop pretending that by calling for an increase in Council housing the left are solving housing problems? There won’t be a magic fairy waving a want and building a million or more public sector properties overnight. Let’s get a policy for today.