Getting to the nitty-gritty of tackling Britain’s rent arrears crisis?

Last week I spent an hour listening to a podcast by the Resolution Foundation. It can be found here Resolving rents: Tackling Britain’s rent arrears crisis

After listening to it I tried to comment underneath the podcast, but for some reason, my comment would not appear. This also happened to others. I don’t know if it has yet been allowed, but I thought it was worth reproducing it here to publicly invite members of the panel to respond to my points.  If you want to completely understand things and make some of your own points, you will need to listen to the podcast.

Overall, it was an interesting discussion and I thought the information on how long court processes might take was sobering. I’ve been saying possession cases could take up to 2 years – ruinous in cases where no rent is coming in – but it looks like even this could be optimistic.

Anyway, to get to the nitty-gritty of the problems I had with the discussion:

1. The graph on affordability between the private, social and owner-occupied sectors was overly simplistic (as they invariably are) and took no account of the fact that:

• Owner-occupiers and private landlords have to cover other costs that tenants don’t pay/are included in the rent. To take an example, if the interest on a mortgage is £400pm and rent is £500pm, but average monthly maintenance, insurance and other costs come to £100, the rent is in fact equal to the mortgage and not £100 more expensive.
• With many private rented homes, utility bills and other charges, such as gas safety certificates, expensive council licences etc are also in effect ‘included in the rent.’ No allowance is made for this in simplistic graphs.
• Private rented homes have a ‘tax’ payable which social and owner-occupied homes do not. It is most clear in the case of a tenant on benefits. If a privately rented home is occupied by someone claiming Local Housing Allowance, a portion of the rent paid by the state will go back to the state via the landlord’s income tax. This means social housing isn’t as cheap as it looks when compared to private rentals, as no tax is payable on the rent. Private landlords also have to pay the Section 24 tax levy on top, and have had to increase rents to cover this ‘tenant tax.’ So private rents are inflated due to having to pay these taxes. This also means that private landlords create a profit and a tax for the country, which the other two tenures do not.
• Many homes in the private rented sector are in more desirable areas and are better quality than in the social sector. Comparisons of their rents can therefore be meaningless and take no account of qualitative differences.

2. There was no mention of tenants who have been completely taking advantage of the eviction bans to not pay rent. The uninformed observer would think it is only tenants who can’t pay the rent exist, and not those who won’t.  As we know, many tenants were already not paying before the pandemic and for reasons nothing to do with it. These cases should have been fast-tracked through the courts. Instead, landlords have had their rights to possession completely removed, causing many extreme financial and other types of misery.

3. There was a complete bias throughout the presentation in favour of the social sector and against the private sector. So there was an accusatory implication with the graph on rents that private landlords charge too much compared to the other tenures, but the later graph which showed that the social sector even before the pandemic was the biggest ‘evictor’ was unremarked upon. We were also informed that Steve Douglas had worked for Housing Associations, and it appeared that, as if to be polite, everyone present, therefore, went along with the idea that the social sector is best – or they might be offending him. It was also ridiculous to suggest that Section 21 and the PRS caused homelessness. Repeating a lie countless times does not turn it into a truth.  In fact, for every 10 people who become homeless, the PRS houses 9. Where would the country be, and what would the homelessness levels look like without the private sector? (although this will change as we can’t afford to take the risks now with the lengthy court procedures and time-wasting schemes such as the pre-action protocols mentioned – another way of keeping non-payers in situ and heaping further pain on landlords).

4. It was stupid to call Section 21 ‘no fault.’ It is a ‘no reason can be given’ notice. There is nearly always fault, most likely because of non-payment of rent and anti-social behaviour. No landlord wakes up and thinks ‘I’ll evict my blameless tenant today, for no reason.’

5. Regarding the tenancy saver loans, I was the first person to bring this idea to the UK from Spain (as someone who does speak Spanish – it was implied the panelists don’t) but I am also the first to point out problems with it. If the panelists want it introduced in England they had better look more closely at what is or rather isn’t happening with it in Wales and Scotland. It would appear that in most cases where loans are needed, they won’t be allowed. There are also problems of fairness – for example, if some people have struggled and paid their rent, why should others who perhaps prioritised other spending, have the money given to them or loaned to them (when everyone knows it will be a huge task to then get them to pay it back to the state)?

Those are my thoughts on the podcast and I hope that those who took part can take the opportunity to answer some points raised.

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