Brighton & Hove City Council has set up a Fairness Commission looking at various areas of public life of which housing is one of the biggest issues.
The Living Rent Campaign has submitted our concerns and proposed solutions. Read the full submission here
Here are the main points:
Understanding the problem in general
- Power and control for landlords: The current regulation structures provide power and control for landlords and buy to let lending banks. The conditions of these buy to let mortgages limit tenancy length and 99% of tenancies are not subject to rent control of any kind.
- Maximising profits: Many banks make conditions on loans that force landlords to use 6 month or 12 month tenancies as well reject tenants who are in receipt of benefits. The only factor that could help this “free market” approach would be an over supply of homes, but it is in the interest of developers to maintain a shortage so house prices remain high and profits are greater.
- High Rents– In Brighton and Hove the average rent for a one bed flat is £867 per month (Home move- Oct 2014) Over 20,000 are on the waiting list for council accommodation. More recently Homelets (Jan 2016) claim that there has been an 18% increase in rents for new lettings over the last year- the largest in the country
- Insecurity– Many people in private renting constantly have to move disrupting schools and the ability to put down roots. The average tenancy lasts 3 years.
- Poor quality housing: In Brighton and Hove despite high rents 37 % of private rented properties fail to meet the Decent Homes Standard
- Loss of public housing: Across the country, since 1980, through the Right to Buy over 1.5 publicly owned million homes have been lost for meeting need and many of these homes are now rented privately (estimated at 38% (10))
- Since 1997 1,342 homes have been sold under the right to buy in Brighton and Hove
- Affordability: “The assessment of affordable housing need report (2012) identified 88,000 households (72%) in Brighton and Hove who cannot afford to (either buy or rent) without some kind of subsidy or spending a disproportionate level of their income on housing costs (9)”
- Loss of public housing: Over a million (probably around 1.5 million) council homes have been sold to housing associations, which are now raising funds by increasing rents on re-lets from social to up to 80% of the market rate (so called “affordable” rents)
- Each year about £9.7 billion public funds subsidise private landlords in the form of housing benefit. It is better to have lower rents and use the saved benefit subsidy to support building truly affordable new homes
- Nationally 30 % of private rented homes fail the decency standard.
- Such large profits can be made from private renting that it is attracting landlords seeking to maximise investments.
- Inequalities are growing as the gap widens between homeowners (who have a growing capital asset that more than 50% of homeowners now own outright) and renters many of whom cannot save, go out and are trapped as a huge proportion of their earning swallowed up in rent
- Overcrowding is increasing as rents rocket, more and more people are forced to share space; in the 19th century families lived in single rooms and if unchecked for long enough this could happen in our lifetimes.
Clearly the relatively lightly regulated “market” has failed all but the landlords and property developers. Clearly also national policies focused on subsidising rents rather than investing in building new homes have exacerbated the problems of under-supply and affordability