Governments have built a heaven for
landlords and a hell for tenants. It’s time to change the system.
By George Monbiot,
published in the Guardian 17th July 2019
I have a friend who works almost every
waking hour, mainly to pay the rent. Her landlord lives on a beach, 4000 miles
away. He seldom responds to her requests, and grudgingly pays for the minimum
of maintenance. But every so often, he writes to inform her that he is raising
the rent. He does not have to work, because she and other tenants work on his
behalf. He is able to live the life of his choice, because they give their time
to him. As there is an absolute shortage of accessible housing, they have no choice
but to pay his exorbitant fees.
Rents charged at such rates – far beyond
the costs of capital and maintenance – are, in these circumstances, a form of
private taxation, levied by the rich on the poor. The penalty for failing to
pay this tax is arguably greater than the penalty for failing to pay taxes owed
to the state: eviction and homelessness. People say “I work for Tesco” or “I
work for Deliveroo”, but the reality for many is that they work for their
landlord. While the average mortgaged household spends 12% of its income on
average renting household spends 36%. I have met plenty of
people who hand over 50% or more.
The UK has become a paradise for
landlords, and hell for tenants. Buy-to-let mortgages, easy evictions, uncapped
rents, generous tax breaks and the replacement of social housing with housing
benefit (a bill that now
amounts to £22 billion a year, much of which is paid to private
landlords) have turned the rental sector into a licence to print money, at the
expense of both tenants and taxpayers. In the 13 years between 2002 and 2015,
average wages for people who rent rose by 2%, but their
rents rose by 16%.
Landlords get away with providing unfit
and dangerous accommodation, and tenants have a powerful incentive
not to complain to the local authority, as 46% of those who do so are
summarily evicted. The government’s
promise to repeal Section 21 of the 1988 Housing
Act, that enables owners of property to evict their tenants without good
reason, will achieve little if it is not accompanied by a cap on rent rises:
otherwise landlords can engineer de facto evictions by hiking the price.
The effects are devastating not only for
people’s finances, but also for their family lives and peace of mind, as
Catrina Davies reminds us in her beautiful, elegaic book Homesick,
published this month. After a childhood clouded by her father’s bankruptcy, the
subsequent loss of the family home, destitution, divorce, chaos and mental
illness, she finds herself on the wrong side of the magic line between those
who own and those who don’t. She is engaged in an endless struggle to lead a
good, fulfilling life, without being crushed by the demands of rent.
After living in a tent, a van and a static
caravan, she rents a tiny box room in a crowded, angry house in Bristol, for
£400 a month. While she struggles to meet her bills, her landlords blithely
travel the world. Eventually, it all becomes too much. She flees into a
collapsing shed in Cornwall, without planning permission, electricity or water.
She now lives on the wrong side of the law, under corrugated iron and
woodwormed timber, in extreme precarity, but with a measure of freedom she has
not been able to find elsewhere.
She is surrounded by the dysfunctions of
Britain’s property market. A miserable, pokey flat comes up, but there are no
available jobs that could possibly cover the rent. Buying is impossible: the
average price of a house in Cornwall is £206,000, while the average wage in the
county would permit her to borrow £51,000.
This disparity is partly explained by the
vast market in second homes and holiday homes. In the UK, while 320,000 people are
officially homeless (and many more are invisibly sofa surfing
or sleeping in sheds or cars), one in ten adults now
owns more than one home. These owners are overwhelmingly rich and
middle-aged or elderly. During the first ten years of this century, the number
of homes standing empty for most of the year rose by 21%.
Davies encounters an almost feudal
economy, in which non-owners work for the owners. Some of the employers,
offering casualised work at the minimum wage, cleaning and servicing holiday
homes and staffing cafes and car parks, are also the local landlords, who set
rents their own workers cannot afford. The economy is sustained by people
living in tents, vans and caravans. She notes that “basic needs can be satisfied
very cheaply when you don’t have a landlord to support.” But landlords have
become punitively expensive to maintain.
The folk theory of crazy rents and
mortgages is that they are the result of too
few houses and too many people. But one of the amazing facts of our time
is that the UK has more bedrooms per person than
ever before. Throughout the boom in house prices, the
number of dwellings here has been
growing faster than the number of households. There is
plenty of housing – for the rich. But a series of outrageous policies ensure
that it remains inaccessible to the poor. There are council
tax discounts for second homes and holiday homes,
and for single people in large houses. The capital gains tax on second homes
and investment properties is lower than income tax.
Why work, if your extra homes earn more than you do, even if they are left
If the number of homes had grown by
300,000 every year since 1996, the average house today would be only
7% cheaper. This is because of the economic
decisions successive governments have made, ensuring that our surplus homes –
and surplus rooms – are inaccessible to those who need them most. Yes, we need
to build more social housing, but even a massive programme would take many
years to counteract the effects of our pernicious system. As our Land For The Many
report points out, we also need explicit
policies to stabilise house prices and prevent homes from being treated as
financial assets. Among them are stiffer restrictions on evicting tenants and
raising rents, stronger regulation of buy-to-let mortgages, a national register
of landlords, with iron rules ensuring that the homes they offer are safe and
fit, and higher rates of capital gains tax for additional homes.
We will need private landlords for the foreseeable future, and they should be able to make some money from their property. But they cannot be allowed to use their position as owners of a limited and non-reproducible resource (the land on which their houses sit) to extract private taxes from people much poorer than themselves. We claim to be a nation that values freedom. But freedom is currently the preserve of the rich.