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The scandal of the state of private renting in the UK(139 Posts)
Housing benefit going to private landlords costs the country £9.3 bn a year, yet 1 in 3 private rentals are substandard. Is this a natural consequence of turning over responsibility for the provision of shelter to a largely unregulated private market?
Article here: www.independent.co.uk/news/uk/politics/back-to-rising-damp-one-million-rented-homes-in-private-sector-are-substandard-9039201.html
From the article: Ed Cox, IPPR North director, said: "The ever-rising cost of rent subsidy for those on housing benefit and the growth of an underregulated private rented sector mean that more taxpayers' money than ever before is being paid to private landlords for substandard housing.
Are you happy that your tax money is being spent in this way? I agree with the IPPR that it would be better spent on improving the state of private rentals or, even better, on building council houses (which do already have to meet far stricter standards than private sector rentals).
Shameless bump: no-one has any thoughts on this misuse of tax money? It's been headline news on the radio all morning.
I would abolish all housing benefit and make people live with relatives. That would solve it at a stroke.
And if they have no relatives they can live with/are capable/able of housing them? Specifically, what if they have no relatives near where they work? (The majority of HB recipients are in work - they just can't afford inflated property prices so instead of the govt doing something to reduce property prices they are giving billions hand over fist to the landlords.)
And how would stopping people from claiming HB improve the utterly dire condition of private rental housing stock in the UK?
The trouble is that there are few enough landlords who take hb already. Some of those accept it because they don't care about the property (going with the theory that hb claimants are not good tenants which is why many landlords say no - this is not a theory i agree with). If they then added various constraints and targets these landlords had to meet most of them would just opt out - because they don't care about the property and don't want to spend money! So even fewer landlords, more strain on social housing and more homelessness.
Regulation is a nightmare because of the age old problem, the people who need regulating will ignore/avoid/refuse whilst the landlords who do care are jumping through hoops and losing out.
So what is the answer then, if not regulation? How do we get these 1 in 3 houses to be in a habitable condition?
Oh sorry, i didn't realise i had to know the solution too
The solution is simply to stop banging on about hb and rentals and sort out the actual issue which is the cost of housing in this country. Prices are too high to buy for so many people they have to rent. They have to pay high rent because of the cost of buying. Sort out the housing market and rents will naturally follow - eventually. More competitive rents make a more competitive market meaning poor landlords up their game or are pushed out.
Btw 1 in 3 is a poppycock statistics figure.
There has to be stronger land lord regulation, but how/who will pay for it and run inspections – especially as the private rental agents managing properties on behalf of landlords may get fewer if landlords have to pay ALL the setting up etc fees themselves - and MORE handle the properties themselves, increasing the problem.
The private landlord market has boomed due to a ‘perfect storm’ of influence; private pension saving made less attractive, a low by historical standards interest rate environment, banks lending to anything with a pulse, inadequate social home builds, inadequate private home builds and a net 2.5 million new citizens over a short space of time.
This is not a new problem but we face a tricky situation IMO, as on the one hand bad landlords have to be stamped on hard, but on the other housing demand side, we have to be very careful NOT to make being a landlord so less attractive to all – they SELL UP when we still need private rental stock (now larger than public/social housing stock) to help alleviate the overall housing shortage and DEMAND for a home.
* “Britain is facing a housing disaster as it is one million homes short, warns new report”*
“Britain is now one million homes short of meeting its housing needs – a decade on from the flagship Barker Review of Housing Supply.”
“The 2004 report by Kate Barker, commissioned by the then Labour government, found that 210,000 homes needed to be built each year to prevent a housing crisis.”
“The economist also set a more ambitious target of ‘improving the housing market’ and making property more affordable by building 260,000 homes a year.”
“But a follow-up report shows that an average of just 115,000 homes a year have been built since then – meaning the country is 953,000 homes short of one target and 1.45million short of the other.”
“The chronic shortage of homes has locked many youngsters out of the housing market with 3.35million 20-to-34-year-olds living with their parents – 790,000 more than when the Barker Review was published.”
And here it is the 2003/4 UK Housing Report.
The (2004) Barker review: key points
It's a mess and a disgrace but there seems to be no political will to do anything about it. Probably because so many vested interests are doing so nicely out of it - banks and so on. And MPs get their rent covered.
Clearly the time to have sorted the problem out is when you have an annual budget surplus, rather than honking deficit - but if you dig into the news, you will find council/social home building IS growing faster than for many years and so is the annual private building rate.
The worse recession in 100-years didn't help business confidence and home builders were no exception, especially as if people couldn't get mortgages or move in a stagnant home market, they had little incentive to build.
Still not enough by any standards, but a start.
I don't know a landlord who accepts those on housing benefit. We never did. My daughter who lets out never has.
We could always abolish housing benefit for private rents. We would save a fortune. I do not see why in a capitalist country the state should support low wages with housing benefit and tax credits and child benefit and childcare help. I would favour abolishing all of those. People need to look after themselves. They have become far too state reliant. We cannot afford it any more.
See this is why they produce these reports. Because they know people will be so so keen to take up the hammer to two favourite bash subjects (benefits and private landlords in one article) that the actual issue will be avoided again and benefit claimants will somehow become responsible for another of this countries problems in people's heads. Its all slight of hand, smoke and mirrors.
Greengrow the answer to that is so stonkingly obvious youd need your head in a very dark place to miss it (in case you haven't noticed wages and cost of living in this country are somewhat out of synch)
It certainly didn't help when Council Tax went up over 110% in 13-years and no one has come up with any solid solutions I can see how to get more money out of the several thousands of struggling businesses, rather than the top 100 companies doing well, that employ what percentage of the country?
In ANY recession you get job losses and wages suffer, never mind the biggest economic recession in 100-years, caused by a financial recession, that affect companies abilities to cover their current daily running costs, never mind invest and pay people higher wages, with unemployed people and cheap labour banging on the doors for jobs.
First step stabalize the economy, second sustainable growth, then wage rises follow as small to medium sized companies get stronger and a tighter labour market gets more competitive.
Housing supply/demand IS the main reason the private rental market grew, and prices/rentals rose - unless 1% wage rises and for most the inability to get a mortgage drove prices up.
Greengrow, are you serious?
As a landlord, surely you can see that if you abolished HB for private tenants your rents would drop massively? The only way that people on average wages can afford the hugely high private rental rates is with benefit top ups. Force us all to move out and live with family, and your pool of renters drops by (can't do maths, a lot). This is because the majority of LHA claimants, ie private renters claiming HB, are actually in work and therefore invisible to landlords. If you remove just 25% of renters from the private sector by making LHA unavailable to them you suddenly have a surplus of supply and reduced demand.
The rents that you benefit from as landlords are propped up by LHA. If LHA wasn't available to private renters you wouldn't be able to charge what you do.
I'm a professional on an average salary but my rent is around 50% of my take home pay. Paying 50% of your take home pay on housing is unprecedented, historically, but these days it's not unusual. As a lone parent I get LHA to top up my rent but you know what, I wish I didn't! I would love to be able to support myself and my son on what I earn but sadly rentals in my area are out of control.
The only way to sustainably bring the home prices/rents down, is to build the home numbers that Barker Report mentioned in 2004 and then some - and not just TALK about it a decade later, with NO GOVERNMENT/PRIVATE SECTOR FINANCIAL PLAN to actually provide them.
Councils borrowing, making using the governments credit rating to lower the interest rate could be widely used to get council/social housing home numbers up.
There was talk of pension funds and insurance companies investing substantially, building and letting out in a professional way, which should go some ways to providing longer term tenancies, and protecting tenants from sub standard properties, excessive rent rises - and these companies can and will be accountable via the media.
But if too many government controls come in, that could ruin interest rate positive council/borrowing costs and/or stop private sector investment in its tracks needing a return somewhere near those on government bonds.
Whatever, we need to build for England, and it's going to take joined up policy thinking to get spades in ground to get them started. IMO.
This is how private renting works in the UK currently.
House prices go up + wages stagnate and go down. = more renters.
More renters = less opportunity to save deposits = higher house prices due to more demand.
Higher house prices = fewer buyers -= more renters.
More renters = higher rents.
Higher rents = higher LHA thresholds = more LHA claimants = higher benefit bill
Higher rents = more BTL mortgages based on projected income from those higher rents.
More BTL mortgages = fewer owner occupiers = more renters.
More BTL = house prices go up due to reduced demand. = more renters.
Regular working people who cannot afford private rents, not because we are lazy or uneducated
masters level here but because rents are too high for regular people to afford, have no choice but to claim LHA top ups and the government has no choice but to provide them. If you price lower earners out of expensive areas the result will be 1) nobody to fill the lower paid jobs, and by lower paid I also mean middling paid, because they will all have to move to Grimsby and East Lothian. (No offence if you love there, but they are much cheaper than Brighton!) 2) private rents will drop because the demand has all fucked off to aforementioned cheaper places to live. This will cause a drop on house prices as BTLers sell their expensive millstones and create a glut of supply.
I'm no economist or mathematician but I can see this as clearly as the nose on my face. The absurd housing market we have now, and the created, imaginary, esoteric wealth that it creates for the owners, depends on housing benefit to prop up the illusion. It might be quite interesting to see what would happen if LHA was abolished, the end result would probably be a more equitable housing situation, but in the meantime many many people would be seriously compromised and it would be a disaster.
Point 2 on the should read = higher rental prices due to more demand.
So lets say the government slashes rents by say 25% and our Base Rate comes off the lowest level in around 300-years (when the Bank of England was formed) and starts to go closer to the last 30-year average, say 5% - are we expecting current landlords to hold onto their own BTL investment (possibly pension) for the GOOD OF THE STATE?
Sure that might put downward pressure on prices as landlords wind up their Buy To Let, take their capital price profit and run - but how does that help those NEEDING to rent that cannot buy that home off the landlord???
How does that help the 1.7 million families (5 million people) desperate for social housing, who cannot compete with other tenants now in a bun-fight for the now sharply falling private rental stock????
Price/government controls never work for long, as for every anti supply/demand market action, there is a sod off REACTION.
POliticians can 'play' with figures to win elections but there is ONLY ONE SOLUTION, build for England.
I agree with you, build for people to buy on shared ownership schemes and rent from housing associations on secure tenancies would be ideal, but build to sell on the open market would also help. Although that would fuck up the housing bubble so that seems less likely.
The housing 'bubble' started when banks opened up the the mortgage lending taps, £21 billion in 1997 to £115 bil in late 2007 at the start of the crash, hence the Average price of a home went up over that period from £73,000 to £232,000.
Having 'kick started' the lending market, allowing people to sell, move, as well as buy, new lending contols is seriously slowing down the market in most places.
In other words, with the BoE mandated to STOP a (financially caused) bubble and lending tighter, much better chance of stability
Loads of landlords as I say do not touch housing benefit tenants at all. Certainly none of the rental agencies in London we have been in touch with would ever put forward a tenant receiving HB but London may be very different from elsewhere and also of course I realise some landlord are prepared to let to HB tenants. I am just saying I would be more than happy if the state abolished housing benefit. The NB bill is massive. People need to stand on their own two feet. They have got too used to an entitlement to a minimum amount of space at the state's expense as if we were all in North Korea. A £10k not £26k benefits cap would be a good start.
Green, most of the time you wouldn't know. I took my house without housing benefit then circumstances changed, and now I get it. My landlord has no idea. I work, I have a professional job, that's enough for them to know. Most LHA is paid to working claimants, once you have passed the checks and got the keys nobody would ever know if you claim a LHA top up that you are entitled to.
You can talk about cutting or limiting benefits but forgive me, it doesn't seem like you have a very nuanced appreciation of the situation.
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