We currently have a housing crisis, particularly in London and other large cities. One thing all the experts agree is that the proposals put forward by all of the political parties are inadequate.
Perhaps the most radical plans are from Labour who want to impose rent restrictions and long fixed terms. Those of us who remember the last century and the Rent Acts have reservations about this.
With spiraling rents making housing in London impossible for many people it sounds obvious to restrict the rights of landlords to increase them. However all the economists tell us that this is not the answer and that it will make things worse not better.
I am not an economist, but I have to say that I agree. I think things should be dealt with in a different way.
Here are some suggestions:
1. Encourage people to take in Lodgers
People often have a spare room or two that they could use to house someone. If more people took in a lodger this could massively reduce the housing problem.
Many landlords strongly object to their tenants taking in lodgers, worrying about losing control of their property and unreferenced occupiers causing damage. However, it does not have to be like this and I discuss some of the options here.
Encouraging lodgers really is the ‘low hanging fruit’ as a way of increasing available accommodation. The first thing to do is to massively increase the ‘rent a room’ tax allowance, which has been stuck at £4,250 for years.
At present, you can have up to two lodgers in your home without creating an HMO. I therefore suggest the ‘rent a room’ allowance be increased to allow for two lodgers at a modest weekly rent. THAT would make more people willing to do it.
The current, and very unfair, ‘bedroom tax’ seems to be encouraging people to use empty rooms by penalising them if they don’t. However, I think a better option is to make it more attractive for people if they do.
NB If you are thinking of renting out one of YOUR rooms, Spare Room have useful guide here and I also have a lot of guidance on my Lodger Landlord site.
2. Do more about empty properties
There are lots of properties lying empty which could house people.
The property guardian schemes, about which I have reservations but which do perform a useful function, have helped. However, we also have the problem of investment (and other) properties being deliberately left empty.
Clever planning and tax legislation could no doubt help here, along with some compulsory purchase orders in suitable cases.
More power should be given to Local Authorities to deal with this – and it could also help increase their funding.
3. Build the ‘right sort of housing’
From what I read in the press it looks as if a fair number of properties are being built. However, they are all too often high-end luxury flats which are then offered for sale to foreigners rather than local people – who could not afford them anyway.
What we really need is more social housing and modest family homes. Developers presumably shy away from this, as no doubt there is less profit from them.
This is why we need to encourage our social housing institutions to build more. Much more. Rather than put them off by forcing them to sell properties off at an undervalue under ‘right to buy’.
And finally
I think we need to consider very carefully before we go back to the laws which failed in the last century. There are other options.
If you find the ideas in this post interesting you may also want to read the following: