Housing is becoming more prominent and politicians are starting to take notice.
Housing has never been a popular topic for politicians – witness the rapid turnaround of housing ministers over the years. It is also a difficult, messy subject that cannot be easily dealt with in a couple of soundbites.
Here are a few things that politicians need to keep in mind when considering housing matters and developing housing policies.
This is people’s homes we are talking about
A home is very important. It is where you come back to every night to rest and relax. It is where you keep all your things and is where you should feel safe and comfortable.
The importance of having a home is also illustrated dramatically by the severe consequences of NOT having a home. It is almost impossible to obtain or retain employment, your children will be taken into care, and most people once made homeless, never get back to ‘normal life’.
The standard of homes is also important. Poor housing results in poor health for its occupants, children do less well at school (which will impact on the economy when they reach working age) and the costs to the NHS go up.
Its a complex subject and not something that can be ‘sorted’ easily.
You need to be careful who you listen to
If you listen to the likes of Shelter and the CAB, the landlord community is riddled with ‘rogue landlords’. People who deliberately refuse to carry out repairs and who routinely evict tenants who dare to complain. People who ride roughshod over tenants rights, regularly pocketing deposits without justification and walking in and out of properties without permission from tenants.
These people obviously exist, but how big a problem are they nationally? Does anyone really know?
Then there is the problem of short fixed terms. I have not read any of the manifesto’s in any detail (who does?) but I understand that Labour are promising long three-year fixed terms as the norm.
But do tenants really want this? Many tenants do – but how many? What happens if someone gets locked into a tenancy they then find is wrong for them? What can landlords do if they are stuck with a nightmare tenant and no easy way to get them out?
Both the landlord and the tenant organisations have compelling arguments. I have a lot of sympathy with both of them, but I am not convinced that either give a true overall picture.
What is needed is proper information about the private rented sector – how many homes, how many landlords, what are the rents, what is the condition of the properties, how long do tenants remain in occupation, etc, etc.
We should have a landlords register and landlord and agent accreditation – this is being introduced this year in Wales, which will be a useful test. If it works, it should be rolled out nationally without delay.
You CANNOT make good decisions without proper information.
What are the consequences of getting it wrong?
At the moment, an increasing proportion of the population is being housed in the private rented sector.
The vast majority of private sector landlords are ‘small landlords’ who own one or two properties as an investment. Often in the hope that it will provide its owners with a more reliable pension than they could get from the financial institutions.
I often say to landlords that being a landlord is not ‘just’ an investment, but that they are in a service industry providing an essential service to consumers.
However, let us not lose sight of the fact that it IS also an investment.
Mr and Mrs Brown from Bromley who have bought a two bedroomed property in Peckham as an investment for their retirement, are ordinary people. They are not a government department or a housing association.
They will do their best, as they are decent people, but you cannot expect them, for example, to house families for months without receiving rent if the father loses his job – its simply not fair on them.
If housing stops being a good investment, people will stop investing in it.
We KNOW this – in 1914 around 80% of households lived in private rented accommodation. After the various Rent Acts giving strong rights to tenants, this dwindled to around 8% in the 1980’s.
If investing in the private sector once again becomes a bad investment, what will happen this time around? Who will buy the properties that landlords no longer want to keep? The families currently living in them won’t be able to afford them.
I don’t have the answers (although I make some suggestions in my free ebook here), but I very much hope that those in power will think very carefully before taking precipitate action.
We have big changes coming in the Deregulation Act later this year. Lets see how those bed down. And see how the Welsh reforms work out. Before doing anything in a hasty manner.
And be careful what you wish for.
NB Generation Rent have done a response to this post here. (It will open in a new tab or window)
Cracking piece Tessa and spot on the money.
I often think of the various aspects of housing issues as being a bit like playing Jenga, you have to be very careful when removing a block.
Trouble is, politicians dont see the same analogy and play away with gay abandon without ever seeing the tower swaying in the breze
“You CANNOT make good decisions without proper information.”
Hear hear!
I’ve been saying this for years. Policy for the PRS is increasingly based on the views and demands of a London-centric vocal minority, NOT sound evidence.
Everyone seems to have forgotten the 2008 Rugg report:
“Poor management practice is considered to be endemic in the PRS. In reality, few data are available to assess the incidence of problems. Outside what is probably a majority of professional landlords – operating at every scale – there is a minority of
landlords whose more informal practices leave them and their tenants in a vulnerable situation should problems arise. At the other extreme are what is probably a very small minority of landlords who are openly unscrupulous and have no intention of complying with the legislation; again, no statistics are available on the numbers in this category.”
Where is the evidence that we need 3 year minimum tenancies? Why is the current choice of tenures – which have been around for decades – suddenly a problem?
A very well written and explained article Tessa. My feelings exactly.
Proper in-depth study of the sector is required from a non biased source. Sorry shelter and ARLA but you just don’t cut it. The findings from both the tenant aspect and the landlord aspect is required.
Then, and only then, can political parties make correct, informed decisions on policy and legislation that benefit ALL parties involved.
The parties need to stop passing ill conceived knee jerk legislation in answer to one segment of the market (usually tenants). Stop press Labour, Landlords are voters too! Just think if you could win those guys over and Business leaders as well! Labour have simply done the maths and calculated that there are more tenants than landlords, shrewd. In the end though, we in the trenches know that the law machine will work it around to a more fairer balance through the doctrine of judicial precedent but until the election, i wait with a sweaty brow.
The Rugg report also went on to say this in reference to the perceived idea that tenancies are too short:
“In actuality, tenancies fail for specific reasons, such as rent arrears, poor quality property making a tenancy unsustainable and issues relating to anti‐social behaviour. It is perhaps more appropriate to focus policy intervention on these reasons for tenancy failure, rather than on a tenancy framework that appears – for the most part – adequate for purpose.”
Perhaps the most well balanced and objective articles I’ve read on landlord and tenant matters.
Most articles on this subject are polarised – pro tenant groups demonise landlords, tarring ALL landlords as rogue landlords, forgetting that most of them are ordinary people running a small business who can’t afford to carry and finance society’s problems, or worse, they envy their relative wealth and wish to take it away.
Landlords then become defensive and don’t want to know about the tenant perspective. Into this volatile mix come opportunistic politicians who are only too happy to “solve” aggrieved tenants landlord problems by offering unworkable short sighted solutions that can only lead to a worse housing crisis and damage the economy.
Most importantly politicians need to understand that landlords with nice properties are able to sell them quickly and will do so if shelter gets ALL its way! So leaving the worse properties being all that is in the rental sector.
Developers depend on landlords buying up properties “of plan” so as to fund the development – without these presales most developers cannot get finance.
Developers also depend on being able to offload properties to landlords when the market turns down – as they are building 2 years ahead, but no one can predict demand that far ahead.
We NEED developers to build lot of new homes! (However much I don’t like new build flats myself.)
Given the recent history of badly throughout regulations (landlord as immigration officer for example, along with deposit protection), all with good aims, all that should have work well if the detail was got right, but all that proved to be less then workable in a lot of cases. Landlords will assume the worse whenever any new regulations are talked about…
So ANY new regulations however well thought out could lead to the landlords with the best properties starting to sell up – leaving behind the worse landlords that just ignore all the regulations anyway.
(The Heat Network {Metering and Billing} Regulations 2014 is yet another example could result in HMO landlords removing all their boilers and radiators, and just giving each tenants a pre-payment electric meter with fixed electric heaters. Resulting in much higher costs to the tenants. I expect that no-one in government thought about the effect on HMOs! )
In my view the Deregulation Act is legislating in a hasty manner.
Many of the amendments do not solve any real issue, complicate things, and are badly drafted.
It is pretty clear that it was prepared in the heat of the general elections in order to gain some “street cred” during the campaign.
The majority of landlords are small or very small landlords. This is actually a good thing for the market as it maximises competition.
Any additional constraints which may lead to consolidation will ultimately hurt everyone, including tenants (likewise for weeding out small letting agents).
The PRS is actually already quite regulated.
However there is very little resources going to enforcement. Let’s enforce the rules instead of adding new ones.