LABOUR HUB EDITORS

Britain’s landlords’ paradise must be dismantled

Mike Phipps reviews Against Landlords: How to Solve the Housing Crisis, by Nick Bano, published by Verso.

JULY 10, 2024

In the ten years from 2010 to 2020, the total value of Britain’s housing stock rose by £750 million per day – excellent new for those who invest in it, but otherwise making it impossible for an increasing number to access the housing they need.

This increase has less to do with innate housing shortages and more to do with the fact that Britain has an economic and regulatory framework which is unusually good at allowing rents to rise, which in turn drives up house prices. In 2021 about 70% of housing in England and Wales was underoccupied, whereas less than 5% was overcrowded.

“Anyone who thinks that massively boosting new supply is the solution to a crisis of housing costs would do well to take a walk through central Manchester,” suggests Bano. As previously noted on Labour Hub, the city’s rents are increasing at an annual rate of 20%; in fact, the rent burden is so high that it outstrips London for unaffordability, due to the city’s lower wages.

Erven in Cornwall, it would be hard to insist that the crisis is driven by a lack of supply. A 2021 report found that there were just 52 houses available to rent in Cornwall listed on the Rightmove website, whereas Airbnb boasted over 10,000 active listings in the county.

Britain’s housing crisis has many aspects: the highest proportion of homeless households in the OECD; 100,000 children growing up in temporary accommodation; rough sleeping increasing by a third every year; and the poorest 20% of private renters surrendering more than half of their income to their landlords.

Government policy favours landlords in extraordinary ways. An increase in the housing element of universal credit, ostensibly intended to help tenants, is invariably seized on by landlords as a pretext to increase rent by a similar amount. It effectively becomes a landlord subsidy.

It was not always like this. Building restrictions, rent controls and other mechanisms led to the near death of private landlordism in the mid-20th century. In 1973 and 1974, Camden Council alone municipalised more than 4,000 privately rented homes. By 1973, privately let homes had fallen to 13% of dwellings, having stood at 61% at the end of the Second World War.

Thatcherism changed that. The selling off of 2 million council homes turned these units into highly profitable commodities at the same time as forcing more people into the increasingly lucrative private rented sector. As Bano observes, “The private rented sector is not a market in which competition tends to bring down price… Instead, the absolute necessity of housing to meet basic human needs, and the fact that many people need to live near their places of work, means that urban rents tend towards the maximum level that tenants are able to pay.”

New Labour in office did nothing to halt this trend. Instead, “council housing was prised from the inefficient hands of local government, rather than expanded, as the social sector became dominated by housing associations and ‘arm’s-length management organisations’.”  The pro-tenant attitudes that had kept land speculation in check, even if Labour were in Opposition, were no longer being articulated by the Party’s frontbenchers.

The result is an almost lawless landlords’ paradise. “It is emblematic of neoliberalism,” suggests the author, “that no one is ‘in charge’ of standards in the private rented sector. After years of de-funding, local authorities are unlikely to use their inspection and enforcement powers because they no longer have the resources.”

The fact that Britain has become a landlord’s paradise means that even the worthiest ones can act with unimpeded cruelty. One of Bano’s clients – he is a housing lawyer – was faced with eviction from her studio flat, which had been without any form of heating for two years and in which she was not allowed to have her children stay overnight, by the homelessness charity St Mungo’s. The case underlines how socially acceptable profiteering landlordism has become.

If the balance of forces is tilted against renters, it is even worse for migrants seeking to rent. Theresa May’s ‘hostile environment’ policy required landlords to carry out immigration checks under threat of criminal penalties. But people of colour face other obstacles, besides widespread landlord racism. In 2022 Shelter and the i newspaper carried out research into the private rented sector, and found that racial inequality is “hardwired” into the housing system. Rents are more expensive, as a proportion of income, for ethnic minority tenants, who are significantly more likely to have been subject to a rent increase of more than £100 per month. “Black and brown people transfer proportionally more of their wealth to asset-owning landlords than white people do, while also facing greater insecurity and worse conditions,” concludes Bano.

Bano takes us through the history of resistance to these iniquities – rent strikes, squatting, today’s renters’ unions. Nor is this issue confined to London and other major metropolitan centres: the 2021 census showed that housing affordability had worsened in over 90% of local authority areas in England and Wales.

But renting in London, where tenants are now being charged non-refundable deposits merely to view rooms they have only a small chance of securing, remains arguably the most exploitative. And as prices rise, conditions deteriorate: the author cites an inner London example of twenty beds in a three-bedroom flat.

How long can this last? The problem is that the boom for landlords has significantly distorted the UK economy – more than half of the country’s net worth is now made up of land values. Any cooling of the overheated housing market could produce a much more general recession. If we ever get a government committed to genuinely helping renters, it is likely to use this concern as an alibi for proceeding cautiously.

But just as the sell-off of council housing under Thatcher drove up housing costs, so a plan for mass council housing would significantly interfere in the private renting market. Rent controls and a hefty increase in capital gains tax would also have an impact. Most urgent is the abolition of section 21 ‘no fault’ evictions, a vital step which the last  government predictably retreated from.

All these reforms are feasible. Many of them have operated in Britain in the past and elsewhere internationally. If the political will is lacking – even with a change of government – the pressure must be intensified.

Mike Phipps’ book Don’t Stop Thinking About Tomorrow: The Labour Party after Jeremy Corbyn (OR Books, 2022) can be ordered here.