Imagine going to the shop tomorrow. You pick up some eggs, a bun or two and some fruit. You walk past the self-checkouts not willing to hear dreaded ‘unknown item in the bagging area’ again. You approach the cashier holding contactless card in your hand to make the encounter as quick as possible. The cashier does not start to scan your stuff; instead there is a questionnaire to fill out to see whether you qualify for shopping. And a small charge. And by the way there are two people willing to pay more for the eggs you want to buy, so you either outbid them or go without a breakfast. Would that make you mad? Would that made you shout and swear and throw random objects around?
Welcome to the private renting market in London. A place where you’ll be outbid, mildly humiliated, interrogated and forced to pay to run checks on you to make sure that you are able to afford mediocre standard but well overpriced roof over your head.
Shelter is one of the most basic human needs; perhaps more important than anything but food. And yet, in my opinion, property rentals are amongst least regulated markets of all in the UK. You start your journey by paying high agency fees just to check that you will be able to afford the property you’re about to rent. It does not quite matter that you’ve been paying just as much for the past 3 years… you need to be checked. Then there is rent. What would happen if all the major supermarkets decided to raise prices by 40% as of tomorrow? I suppose we would have millions of people on the streets. Somehow private landlords do that (slightly less rapidly) continuously and no one says a word. Landlords are quite aware that people have to live somewhere, so no matter how much they asked for the hole they have to offer there will be someone to take it. According to Guardian (http://www.theguardian.com/money/2015/apr/11/buy-to-let-landlords-earn-returns-of-up-to-1400-since-1996) landlords who invested in properties in 1996 have returns of up to 1400%. This is more or less five times more than any other kind of investment in the same period. Now, I believe that shelter – again, a basic human need, should ideally not generate any returns whatsoever. I can understand that for some that would be by far too radical an approach, fair enough. Nonetheless, whatever your views are you must acknowledge that in no circumstances providing accommodation for people should be the most profitable source of investment of all. It is just not right.
This is not all. I will not be able to delve into all the wrongs of the property market in one post, but I just wanted to signal a few of the things I noticed (and I am sure that there are some that escaped my attention). If you’re a landlord you are able to deduct the interest on your mortgage from your income tax. All the tenancy agreements are signed for a year and then extended as a rolling contract allegedly because this is suitable for everyone. In reality the tenancy agreement is the only protection for the tenant. Without it landlords can ask for their property back at any time with a 2 month notice. There is absolutely no defence against it and the landlords do not have to give their reason. In effect this means that often asking for repairs to be done or complaining about anything after your tenancy expires puts tenants at risk of losing their flat. I understand that there are many great landlords out there (and on that note all the best to D. wherever you are man) but there are loads of really shitty ones too and without property legislation there is no way to protect people from them. Effectively there are almost no standards (because there is always someone desperate enough to accept a flat in any state, hoping that the landlord might do something about it in the future), no regulations and no supervision. Building 200 or 300 thousands houses every year may well be the best way out of the housing crisis. However, regulating the rent market would provide an immediate solution, not one that really works in 2025.
How is that not the main story on the news every day? I don’t quite know…