As far as building an estimated 100,000 or more new houses each year for social housing to rent is concerned, there are perceivable downsides to throwing money into this. This is a laudable policy of The Labour Party currently but for the reasons I am about to argue, it would be a difficult one to put into practical effect quickly. I would naturally welcome their spokesperson’s thoughts on this counterargument for further discussion however.
In the Thatcher era, it was generally understood that the existing council estates around Britain were tending to degenerate towards becoming urban ghettos or concentrations with poorer class-distinctions and lesser prospects and opportunities being available to those from within them.
In the 70’s the then Conservative government, as well as simply selling off individual council houses to newly aspiring home-owner residents (by using ‘Right To Buy’ as it became known), knew that the twin effect would be to slowly start to break up the localised concentration of social housing for rent.
It may now clearly be seen that to have allowed the capital raised from these sales to be used to build more council estates would simply have recreated the original societal problem once again.
A more creative solution would be needed and whilst no such solution was forthcoming at the time, it was understandably more prudent simply to sit on the cash raised instead.
The question was (and still is) if upwards of 100,000 new houses were to be needed for social rent all around Britain each year and for a decade or more to come, how could that be achieved without creating places tending towards becoming urban ghettos once again?
The only answer surfacing right now is to turn the problem of housing these families over to more private landlords.
In the process of bringing private investors into the business of managing both single and multiple tenancies in locations across the whole country, it soon became clear that this could only be achieved if the tenants under this model were given practically no security of tenure. Without that, the private landlords simply would not invest. The Assured Shorthold Tenancy was conceived.
The result has been quite a success from the point of view of actually housing lots of people and families in large numbers of locations across the whole country.
It is also clear that the reduction in concentrations of people living in social housing estates has had a number of advantages and the mix of council and privately owned houses brings a worthwhile added variation.
The question still remains however – what is the best forward?
Attempts have been made to force the developers of new housing estates to incorporate a proportion of low cost housing within all new developments but this has not turned out to be a great success but the provision rate of such affordable houses has dwindled recently.
If we look at the available evidence critically, some exciting new options start becoming clear.
First though, we need to rule out the options that won’t work. For example:
- As explained above, building more large scale social housing estates would not solve the societal problems resulting from doing that.
- Giving tenants of the private landlords more security of tenure, would alienate the private investors whom are risking their capital by providing housing for those people in their need.
- Rents over the past decade or so have increased beyond expected levels, partly owing to the degree of scarcity of available houses to rent.
So, what we are left with is there’s one thing and only one thing to be done.
It is restricting the degree of profit which may be made by private landlords and when seriously considered, this must be the best way forward. To do this effectively however would require a big, bold and extensive new set of policies and agency regulations to be set up by a truly responsible government.
To a smaller extent this may be partly achieved by forcing landlords to properly maintain the structure of their let properties in fully satisfactory condition. This is already now happening but that is not the final answer..
The main way of restricting the degree of profit which may be made, both by private landlords and by owner occupiers too, would be to bring in such new regulatory methods for the marketing, purchasing and renting of residential property using the procedures proposed under The House Price Virtuoso Solution already set out elsewhere in these pages.
For all the details about what this is and how it could inexpensively be fully and quickly implemented throughout England and Wales, please go to the main page covering this:
Posted by: Peter Hendry, Housing Valuation Consultant
Author:– The House Price Virtuoso Solution
Copyright © 2019.