Some years ago the government made arrangements that allowed council house tenants to acquire their properties at a price that was well below the cost of building them or their value. This 'right to buy' was a popular move and quite a few such tenants pulled together family council house tenancies to form family property companies. Some of these new property companies have perhaps behaved more vigorously than most ‘buy to let’ landlords and student accommodation seems to have been one of their most successful endeavours. I know some of these in London to this day. This was all easily financed and enabled the ex-council house tenants to relax and enjoy life.
One effect of this move by government was, obviously, to reduce the amount of affordable housing available to those who need it. Another effect was to make affordable housing a particularly unattractive investment choice for councils for fear of further efforts to confiscate their assets.
Government is now putting pressure on councils to make more affordable housing available. Councils simply don’t have the funds to do this. And, especially in the south of England, large scale council house developments are not likely to be appreciated by the rest of their voters.
Meanwhile, government has decided that private landlords of properties are vile creatures whose aspirations are an appalling blight on life in England. So government is now making sure private landlords can’t evict troublesome tenants, whether they pay any rent or not, and is raising all kinds of bureaucratic controls to increase their costs. The astonishing result of these policies is that fewer people are investing their capital in ‘buy to let’ properties. As property prices have risen in real terms, more and more people can’t afford to buy a house or a flat. So demand for rented properties has increased and so have the passing rents. Meantime, more landlords are seeking higher returns and lower risk by using short-term and holiday lets, especially in the more attractive bits of the south east of England.
One effect of these policies is that the courts are having their arms twisted not to let any tenants be evicted. The regulations are being used to make sure almost any eviction notice will end up in court and the lawyers are encouraged to have a lovely time picking holes in the procedures that have been followed by the owner. This is because an evicted tenant becomes a liability for the local authority and they haven’t anywhere to put them.
A child can see that all this is plain silly.
If the government had any sense, the affordable housing problem could be solved in five minutes. If a landlord were to be offered tenants by the local authority that might be suitable for his property then quite a lot of ordinary let properties could be made available as affordable housing. But the local authority would have to make sure that the housing benefit paid was actually in line with the rental value. And the housing benefit would have to be paid to the landlord, not to the tenant. And the local authority would have to undertake to have back any tenants who turned out to be disastrous. And the local authority would have to offer to hold a sum on behalf of the tenant and the landlord so it could be used as a deposit for the tenancy in case things went wrong.
If the local authority could be persuaded to use common sense instead of regulation and to avoid flooding all this with paperwork, it would be far cheaper than trying to build more affordable housing.
