This week’s A Fairer Private Rented Sector white paper, proposing measures to tackle unscrupulous landlords, comes hot on the heels of announcements on boosting home ownership. Last week the government said it plans to extend the Right to Buy to tenants who rent their homes from housing associations. Yet if the government truly wants to tackle the vagaries of the private rented sector, it needs to scrap Right to Buy altogether.
Right to Buy was one of the most disastrous public policy interventions of recent decades. Far from creating a generation of homeowners, it has fuelled the growth of costly and poorly regulated private rented housing, the subject of this week’s fresh wave of announcements. Recent analysis has found that 40 per cent of the two million ex-council properties sold through Right to Buy are being rented through the private sector and over a third of a million private rented homes in the north fail to meet the Decent Homes Standard. The policy has contributed to an economy that, far from growing wealth for all, creates inequality and the very suffering the government is purporting to tackle.
Right to Buy has had a devastating impact on the supply of secure, affordable homes in the UK. Rather than seeking to undo this damage, last week’s announcements deepen it. They also follow a familiar trajectory of public policy being used, not as a tool for ensuring the public good, but instead for extracting profit from the people and places that are struggling the most. The introduction of 5 per cent deposits, to use a related example, were purported to unlock the option of home ownership for young renters but, in reality, have re-established the lending practices and corporate profiteering that were common in the lead-up to the 2008 financial crisis.
The deep inequities of housing in the UK are simultaneously evidence, consequence and fuel for our dysfunctional economic model, not to mention the massive spatial disparities that levelling up purports to address. Over the past 30 years, wealth has become increasingly concentrated in the hands of the already wealthy few, while wages have stagnated and poverty rates have climbed. This is nowhere more apparent than in the private rented sector.
At a time when four-fifths of low-income working-age households are spending more than a third of their net income on housing costs in the private rented sector and when no-fault evictions account for 25 per cent of homelessness, surging rents and house prices are making property ownership a lucrative business. Last year, dizzying house price rises meant that on average there was more money to be made from owning a property than having a job in the UK. In the context of this it is little wonder then that people are opting to buy property for investment purposes – a recent survey of private landlords found that 40 per cent use the profits from their rented properties as a pension contribution.
Against the rising tide of housing need and insecurity, our defences are woefully inadequate. Extending the Right to Buy may benefit a small number who are able to assemble the funds necessary to buy their home, but will worsen the situation for many, fuelling house price rises and further reducing the supply of social homes. By attempting to put out the fire, the government is instead stoking the blaze. If you’re looking for a policy that will make things worse for the most financially vulnerable in society, extending Right to Buy is it. If you want to make the cost-of-living crisis worse, this is the way. If you want to deepen the extraction of wealth from communities through housing policy, this is the one. If you’re looking for a vote-winning policy to restabilise a government, this isn’t it.
These proposals can only be understood as the actions of a government more interested in headlines than housing reform. People, particularly those living in the private rented sector, deserve better. They deserve to have a government that is genuinely on their side when it comes to tackling the root cause of unscrupulous landlords content to make profits on the back of human misery. There is a raft of proposals on the table that could do more, including the implementation of rent control mechanisms and the extension of landlord licensing schemes.
Furthermore, legislating, not to extend, but to scrap Right to Buy and ensuring that local governments and their partners have the proper resources to fund and build good quality social housing could overhaul local housing markets, securing more housing for social models of ownership. Here, local authorities can look to inspiration from around the UK. Take, for example, Salford Council, which is engaged in building council housing while mobilising public vacant and derelict land towards community-led housing run by tenants. Bristol City Council, too, is pursuing its own vision of an alternative to the private rented sector, with land disposal policy integrating community-led housing and dedicated staff resource to support community-led housing groups.
We cannot separate the UK’s housing problems from the dysfunctional nature of our economic model, a model that values housing more as a capital asset than a public good in providing home and shelter for people. To change this, we need to ensure that access to housing is a basic human right and to understand investment in providing that housing as the foundation for a decent and inclusive economy. But housing cannot be seen in isolation from the wider economy of place, and providing housing needs to go hand in hand with delivering decent jobs, good wages and the regulation of land and property that is able to work in the public, rather than private, interests.
Right to Buy is a policy that feeds a socially destructive and economically extractive housing market. Tackling unscrupulous landlords is simply addressing the symptoms and not the cause. A progressive approach would build an alternative.