The housing crisis – and four fatal mindsets which make solving it (almost) impossible

A home, the place where you live, is enormously important. We all need somewhere to go, somewhere we feel safe. But many people do not have this.

Poor housing can make you ill. It can affect how children perform at school and make or break their chances life. It can depress a whole community. It is not something we should tolerate in a civilised society.

So why do we have a housing crisis today?

I think it has a lot to do with how we think. Our mindsets. Our gut reactions. Here’s why I think that:

1. Housing crisis? What crisis?

There was a telling paragraph in Ben’s column the other week. He was talking to some friends ‘who have no connection to anything housing related apart from the fact they live in one’ and the discussion moved to the problems associated with building on flood plains:

“How ridiculous. As if we need more houses for chris-sakes”, was the remark.

I [i.e. Ben] had to explain the current housing crisis, which took them completely by surprise

A big problem with the housing crisis today is the most people don’t know it exists. The majority of people live in a decent home. As do all their friends. And their relations. I expect YOU do.

‘I’m all right Jackism’

So the problems of tenants living in substandard and crowded accommodation seems remote and nothing to do with them. After all it mostly affects foreigners and poor people, and who cares about them?

You are not going to get upset about the non solution of a crisis you know nothing about. And the Government, which always has one eye on its re-election prospects, cares about what the electorate cares about.

The Housing minister was recently downgraded from a cabinet position. Thats what the Government thinks about housing.

2. Its not my problem

If people do think about the housing crisis, its normally in the context of someone else dealing with it.

Government, for example, mostly seems to want to leave it to the Local Authorities.

The Local Authorities however have largely divested themselves of their housing stock and passed it over to Housing Associations.

Passing the buck

So far as their various housing related duties are concerned, there is a marked lack of joined up thinking at Local Authorities.

The department which deals with homelessness issues (whose staff are gradually collapsing under the weight of too much work) are different from the departments dealing with the payment of benefit. These are again different from the departments dealing with planning and the enforcement of standards.

Ben will be able to talk about this better than me, but I get the distinct feeling that there is a buck being passed fairly swiftly – supposing anyone has the courage to look it in the eye.

Problems at the coalface

What about the coal face? The actual provision of housing itself? The Local Housing Associations are doing the best they can, but they have a massive problem looming.

The changes in the benefit rules mean that many of their tenants will inevitably fall into arrears. Which threatens their very survival.

Many private landlords are doing a great job, but these tend to be the ones who take it seriously.  The ones who take the trouble to educate themselves and do the thing properly. Others are different.

However landlords are private individuals and are only responsible for their own properties. They cannot be expected to take a wider view.

There is also another problem with the private sector.

3. Its just an investment

Many people think about owning property, e.g. ‘buy to let’ property, as just a financial investment. An alternative to the stock market for, say, providing a pension.

“Shall I invest my savings in Top Widget shares this year? No, I think I might get a better return if I invest in a buy to let property in Xtown.”

Whereas in reality, renting property is a heavily regulated consumer SERVICE industry.

If you buy a property to rent, you are not just buying an investment, you are providing someone’s home. Which is a bit different.

The tax regime does not help here, as I understand that landlords are taxed on the basis that their properties are investments rather than businesses. Which tends to perpetuate the mindset.

Out sourcing the work and ‘rent to rent’

People who want to treat their property as an investment rather than a business will not want to spend a lot of time managing tenants. They will therefore be looking to offload the management on to someone else.

Often this will be a letting agent – where standards vary widely.

But, hey! Wouldn’t it be great if there was a company who could take the WHOLE THING off your hands and just pay you the rent? Guaranteed?

Warning! A ‘gung ho’ enthusiasm for companies offering you easy money, may lead to the dire problems experienced by landlords who leased their properties to London Housing Solutions (discussed on the Channel 4 report here).

A company now being put into administration, and who appear to have lost over £400,000 of landlord’s money.

Landlords need to be REALLY careful about handing their valuable properties over to a largely unknown company to manage on a ‘rent to rent’ basis.

Anyone thinking of doing this should watch this Property Tribes Interview with solicitor David Smith.  Twice.

4. My head hurts

There is a tendency, when faced with all the problems we have in housing, for people to just shake their heads and back away. Its all too big and difficult.

Here are the main elements of our current crisis:

• Lack of capacity

We have too many people in this country for the housing currently available.

This is not made any easier by the never ending flood of immigrants coming in and needing somewhere to live, and the general tendency in society towards smaller (often one person) households.

Neither of these are bad in themselves but they add to the problem.

Incidentally, solving empty housing issues is, in my view, preferable to cutting back aggressively on immigration.  Immigrants are (mostly) good.

• Development problems

We are a small country and do not have large tracts of land available for building. Then getting permission to build on the land which is available can be problematic under our planning system.

• Benefit changes

The long term effect of recent benefit regulation charges is that more and more tenants are going to fall into arrears.

Neither private landlords nor the housing associations can survive long term with tenants who are not paying rent. So where will these people live?

• No preconditions for renting

There are no registration or accreditation conditions in place for either letting agents or landlords. The inevitable result of this is that many landlords / letting agents are incompetent through ignorance. Others are downright criminal.

There is nothing in place to stop either the incompetents or the criminals from renting property to vulnerable people (and we are all vulnerable if our housing options are limited). Is this what we want as a society?

Shouting in the wilderness

I don’t know the answers to these issues. Its not my problem after all.

But I have an organ, this blog, which is read by many. I feel I have a duty to shout about it from time to time.

My feeling is that we need to change our thinking. Our underlying mindset. Our national institutional thinking (as it were). It is from our gut instinct that actions often flow.

One way to do this is by legislation. Changed attitudes often flow from legislation.

Another way is by bringing things out into the open so we can all see them for what they are (and which would help with 1 above). Hence this blog. The press and other media have a responsibility here.

But more than that? What do you think?

Note – you can read more of my ideas in this handy free ebook >> here.