Make no bones about it this is an incredibly important week for the private rental sector. Perhaps no General Election campaign in recent times has focused so heavily on the issues of both home-ownership and renting, and I hate to say it but there has been for too simplistic a view taken on what is currently ‘right’ and ‘wrong’ within the UK housing market.
Anyone familiar with the works of documentary-maker, Adam Curtis, will be familiar with his take on how politicians and the media have reacted to the major events that shape our world. Essentially, Curtis’ view is that, in our post-war world, there has been an incredibly simplistic view which boils down to ‘good versus evil’. The truth of course is that everything is much more complex than this however the ‘good versus evil’ narrative has taken hold and ultimately driven politicians’ and the media’s response to what is happening.
Curtis has focused on this view when looking at the Middle East, particularly responses to what was happening in Afghanistan, Iraq, and what the politicians decided to do about it. But, it can ultimately be used to explain political action and media reaction in pretty much every area of our lives. Curtis now suggests that with world events being so utterly complex, and the political community having made such huge mistakes recently, the ‘good versus evil’ response has no merit at all. Which is why we have such contradictory responses to what is happening in Syria, Iraq again and across that entire region – who are the ‘good’ and ‘bad’ guys in those conflicts? It’s very difficult to tell and therefore difficult to know what to do.
What is happening in the UK – albeit on a much much smaller scale – and particularly in relation to the private rental sector is a political attempt to cast certain parties as good – namely tenants – and others as bad – namely landlords and letting agents. Labour Party policies play very much on this split focusing on ‘ripped off’ tenants by unscrupulous landlords and their partners in crime, the agents. This despite the overwhelming evidence that shows the private rental sector working incredibly well for the UK housing market as a whole and the vast majority of tenants.
Ask most tenants how they feel about their situation, the properties they live in, their landlords and their dealings with agents, and I suspect you would get extremely positive answers. Yes, of course, a number will say that they would rather be living in their own home but I have extreme doubts about whether most would feel they are being ‘ripped off’.
Let’s be fair to the Coalition over the last few years, they have done far more than previous other Governments to support potential first-time buyers in getting onto the housing ladder. The Help to Buy scheme, changes to stamp duty, the Help to Buy ISA, to name but a few initiatives, have all been founded on the bed-rock of the UK State recognising that we are a home-owning society and that, those that wish to, should be provided with help and support in order to achieve their aims in this area.
However, I have always been of the view that doing this should not simply be achieved by denigrating and attempting to destroy the private rental sector. While Labour’s plans to cap rents over a three-year period and ban letting agents from charging fees are mildly annoying rather than deadly, my real fear is that this is the thin end of the wedge. Intervening in such a way will change the nature of the sector and, I suspect, once they start on such measures this won’t be the end of it. Are they merely a Trojan Horse out of which will spring even more measures during the next Parliament?
On these two specific measures, there will of course be negative consequences. What could happen is that existing landlords decide that, at the end of the current ASTL, they will provide their existing tenants with notice either to sell the property, or to increase the rents in order to cover the increased admin fees that the agents will charge. Ultimately the tenant is likely to be picking up the tab in one way or the other, or if the landlord sells, they will be looking for a new property in a market where supply has fallen off a cliff.
So, while this isn’t a party political broadcast on behalf of the landlord party it is a reasoned request that, once the result of the Election is known, political parties who will need to work together, give much greater thought to the potential consequences of such action. What sounds good as an election sound bite might do real harm as regulation and legislation and, given the ongoing shortage of housing supply and the continued existence of the gap, we need a far more long-term and structured plan for the UK than damaging short-term measures. Demonising private landlords and letting agents may garner some votes however it will not solve any housing problems and in all likelihood create more ‘evil’ than ‘good’.
Bob Young is chief executive officer of Fleet Mortgages
