22 November 2019

Home ownership must not be the sole focus of housing policy

By Dan Wilson Craw

This Christmas, 126,000 children in England will be living in temporary accommodation, having been made homeless with their families. The failure by successive governments to build enough social housing has made it impossible for low income families to put a secure, affordable roof over their head.

No one deserves to live in inadequate housing for years on end, and the children sharing bedrooms with parents with nowhere to play or do homework will be scarred for life. Fixing this will be a moral duty for the next government. The biggest task will be to build suitable homes where they are needed. But it is also essential to prevent people from becoming homeless in the first place.

According to data from the Ministry of Housing, Communities and Local Government released in September, local councils helped 263,720 households who were facing homelessness last year. Of these, 28,320 were being evicted because their landlord was selling up, re-letting the property, or responding to a complaint by the tenant about disrepair.

That means more than 10% of homelessness is created by landlords making purely personal decisions – or who simply don’t want to meet their legal obligations to provide a home fit to live in – and leaving their tenants and councils to deal with the fallout. Homelessness support cost councils £1.1bn last year.

Landlords can uproot tenants without needing a reason using Section 21 of the Housing Act 1988. While landlord groups often claim that such evictions are normally prompted by tenants being in arrears, this latest data shows that roughly twice as many tenants faced homelessness essentially from landlords seeking greater profits.

We can see this play out at the local level. Tenants were most at risk of being made homeless in the outer fringes of London – boroughs such as Havering, where 39 private renters in every 1000 faced homelessness as a result of their landlord selling or re-letting – and commuter towns such as Corby, Milton Keynes and Crawley.

While the property market in London and the South East has slowed in recent years, these eviction hotspots are still feeling the ripples of the mid-2010s boom that priced renters out of areas within easier reach of central London. Landlords in these areas are still able to take advantage of a buoyant market by cashing in their properties or bringing in new tenants who can afford a higher rent – all at the expense of existing residents and local housing services.

Several of these eviction hotspots also happen to have slim majorities so could be where the General Election is won and lost. Around England, 47 seats have majorities of less than 5000 and larger than average private renter populations. Section 21 evictions can happen to anyone on an assured shorthold tenancy – the homelessness data represents only the tip of the iceberg. To appeal to these voters, parties must take steps to prevent the conditions that allow landlords to charge higher rents – which means a responsive supply of new housing – and offer stable homes that can’t be lost at the whim of a landlord.

Fortunately, the last government recognised the damage arbitrary evictions can cause and has consulted on proposals to scrap Section 21 and require landlords to provide a valid reason for eviction. Today both the Conservative and Labour parties reaffirmed their commitment to this policy.

Landlords will always need to sell, so the system that replaces our current one must minimise the upheaval for the tenant caught in the middle. The Conservatives are reportedly considering a proposal from the Centre for Policy Studies to incentivise landlords to sell to their tenant, with the tenant getting a cut of the capital gains tax to help them with the deposit.

But nearly two thirds of private renters have no savings and many would not be in a position to buy their current home even if the landlord offered. Landlords who want to exit the market should be encouraged to sell to the council or another landlord, with sitting tenants. If a landlord must have a vacant property – perhaps because they need to make structural repairs to it – then they should help their tenant cover the costs of moving home.

For our neighbours who continue to languish in temporary accommodation, the only answer is to build more social housing. This would free up private rental supply and bring down rents across the board. We have had commitments on this from Labour and the Liberal Democrats this week, but need more from the Conservatives than a narrow focus on building homes to buy.

Home ownership may well be the long term dream for most, but if we want to give everyone a stake in society, the opportunity to get on in life – and somewhere comfortable to spend Christmas – we can only do that with stable and affordable homes in the rental sector.

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Dan Wilson Craw is director of Generation Rent