Four decades of failure

Posted: January 19, 2023 | Author: | Filed under: Housing benefit, Rent control, Social housing | Leave a comment

Originally written as a column for Inside Housing.

Why has housing become so unaffordable over the last 40 years?

The answer, according to new report for the Joseph Rowntree Foundation (JRF), is cuts in housing subsidy that represent ‘a massive shift in who pays market housing costs, from government and landlords onto tenant’ since 1979.

It’s the scale of the shift, rather than the shift itself, that is striking.

Back at the start of Margaret Thatcher’s first term, social and private renters alike were paying around 10 per cent of their incomes on rent. By 2020 that had risen to 25 per cent for social renters and 30 per cent for private renters.

The shift is represented in a graph that Ian Mulheirn, who co-authored the report with colleagues James Browne and Christos Tsoukalis from the Tony Blair Institute for Global Change, calls ‘one of the most striking’ in public policy:

They calculate that if housing subsidies had been maintained at 1979 levels as a share of total housing costs they would have been worth £45 billion 2019/20 rather than the actual £31 billion.

This ‘generational housing costs squeeze’ is the result of massive change in three elements of housing subsidy: social housing; housing benefit; and rent controls.

That is the result of the accumulation of many different policies over time: cuts in investment in council housing and higher council rents; private finance and higher housing association rents; the deregulation of the private rented sector; and rapid increases in housing benefit to ‘take the strain’ of all that followed by the cuts imposed under austerity.

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The legacy of the 1988 Housing Act 30 years on

Posted: November 13, 2018 | Author: | Filed under: Council housing, Housing associations, Private renting, Rent control, Social housing, Tenants, Uncategorized | Tags: | Leave a comment

This week marks the 30th anniversary of Royal Assent for the Act that set the framework for the housing system as we have known it ever since – but as its influence wanes is it going into reverse?

The 1988 Housing Act led to lasting change in social and private rented housing. Not everything happened at once – some provisions were amended in later legislation and some took time to have an effect – but this was what set the basic ground rules for what followed.

In the social rented sector, it meant private finance, higher rents, stock transfer and housing associations replacing local authorities as the main providers. In the private rented sector, it meant the end of security of tenure and regulated rents and the arrival of assured shortholds and Section 21.

But it also created a system that was full of contradictions that are now only too clear. The stage was set for the revival of rentier landlordism but also the eventual decline of home ownership, the fall of municipal empires but the rise of mega housing associations and a belief that housing benefit could ‘take the strain’ of higher rents that always seemed unlikely and drained away with austerity.

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Rent control moves closer to home

Posted: November 15, 2015 | Author: | Filed under: Ireland, Legal, Private renting, Rent control, Scotland, Wales | Leave a comment

Whether you’re for or against measures to control private sector rents, it’s going to be worth watching closely what happens to new legislation in Ireland.

After a long row between the Irish coalition partners, the government has finally agreed a package of measures designed to give ‘rent certainty’ to tenants until supply increases. The package includes:

  • For the next four years, landlords will only be allowed to increase their rents once every 24 months rather than 12 months as at present
  • Landlords will have to give 90 days notice of any increase (up from 28)
  • Landlords will have to provide evidence that any future increases are in line with the local market rate and inform tenants of their legal right to challenge them
  • Tenants will have stronger protection against unscrupulous landlords who falsely declare they need to sell the home or move in a family member: landlords will have to sign a statutory declaration and face fines if it is invalid
  • Landlords who house tenants on social security will get 100% mortgage tax relief against their rent (up from 75%).

Note that ‘rent certainty’ is not the same thing as rent control. What’s interesting about the package from this side of the Irish Sea is that it anticipates – and goes beyond – all of the points raised in the growing debate on rent regulation here. The Scottish Government is dipping its toe in the water with a Bill that will allow local rent control in rent pressure areas while Labour will call for new powers to freeze rents in London if Sadiq Khan wins next year’s mayoral election.

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Back to the future

Posted: September 15, 2015 | Author: | Filed under: Help to Buy, Home ownership, Private renting, Rent control, Social housing | Tags: , , | 2 Comments

Originally posted on September 15 on Inside Edge 2, my blog for Inside Housing

The first Communities and Local Government questions with a new opposition brought some familiar faces – and issues – back into the limelight.

The Labour reshuffle following the election of Jeremy Corbyn gave the shadow DCLG team only a couple of hours to prepare so it was just as well that shadow communities secretary Jon Trickett had an experienced man beside him on the front bench.

John Healey was one of the most effective Labour housing ministers and continued to show a strong interest even after he moved on. His warning about the threat to social housing helped inspire the creation of SHOUT. He explained his continuing interest in an Inside Housing interview last year in which he supported lifting the borrowing cap on council housing.

In June he wrote to the National Audit Office to call for an investigation of the Right to Buy. It’s good news that he’s back and even better that he’s a member of the shadow cabinet.

His line of attack at Monday’s DCLG questions was declining home ownership. With George Osborne describing it as ‘a tragedy’, what did communities secretary Greg Clark have to say to millions of ‘middle England, middle-income young people and families’ with no hope of buying?

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Scotland goes its own way on private renting

Posted: September 2, 2015 | Author: | Filed under: Legal, Private renting, Rent control, Scotland, Wales | 1 Comment

Originally posted on September 2 on Inside Edge 2, my blog for Inside Housing

Rent control and increased security of tenure are back on the government agenda for the private rented sector for the first time in 30 years.

I am of course talking about the Scottish Government, which yesterday confirmed plans for a Private Tenancies Bill as part of its Programme for Scotland 2015/16. The Bill will ‘provide more predictable rents and protection for tenants against excessive rent increases, including the ability to introduce local rent controls for rent pressure areas’.

And it will introduce a Scottish Private Rented Tenancy to replace the current assured system and remove the ‘no-fault’ ground for repossession. That means the landlord will no longer be able to ask a tenant to leave just because the fixed term has ended but there will be ‘comprehensive and robust grounds for repossession that will allow landlords to regain possession in specified circumstances’.

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The return of rent control?

Posted: January 6, 2015 | Author: | Filed under: Economics, Private renting, Rent control | Tags: , | 2 Comments

An idea that was supposedly buried a generation ago is rising rapidly up the housing policy agenda.

Last year saw modest proposals by Labour for rent regulation within three-year tenancies in the private rented sector. Now there are calls for something that goes much further.

The conjunction of two news items last Friday put the issue into sharp relief. The first was an opinion poll for the private tenants campaign Generation Rent that asked ‘would you support or oppose proposals for the government to introduce a “rent control” system in the UK’. The result was 59 per cent to support, 6.8 per cent to oppose and 34 per cent with no opinion. Levels of support rose to 77 per cent among private renters, 69 per cent of Labour voters and 64.5 per cent of Londoners. However, rent control also had the support of a majority of Conservatives (55 per cent) and homeowners (56 per cent).

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