Abolish them!

Deidre Forster on solving the housing crisis

“Against Landlords” by Nick Bano published by Verso

Nick Bano’s book is a concise analysis of today’s housing crisis. It describes how the current appalling situation has arisen and suggests solutions.  The book is an interesting blend of anecdote, academic research and political argument. It is extremely well written, managing to be a serious critique whilst also being accessible and entertaining.  Bano’s indignation is clear as he describes the hardship caused by the last fifty years of housing policy.

In some ways the book is reminiscent of “This is going to Hurt”- Adam Kay’s powerful memoir of his experiences as a junior doctor in the National Health Service.  Against Landlords draws on Bano’s personal experiences as tenant, housing activist and junior barrister. This makes the work a fascinating read and sets it apart from other literature on the subject. But this book is not a misery memoir, it is much more valuable than that.  Bano provides an erudite analysis of our housing system and shows how it developed over the centuries and how it has arrived at a place where millions of people pay unaffordable amounts to live in unhealthy, low standard accommodation.

Bano describes how in the 1990s Thatcher’s government withdrew any meaningful security of tenure for all new lettings and allowed landlords to charge market rent.  The theory was that market forces would prevent landlords from overcharging – there would be a plentiful supply of accommodation; tenants and landlords would have equal bargaining power and rents would be fixed at a level that suited both. Similarly, tenants would choose not to rent substandard homes, which would lead to the improvement of Britain’s housing stock.

It is true that the number of landlords has rocketed – one in 21 adults in this country is now a landlord – but this has not led to healthy competition for tenants as the Tories predicted.  Rents have gone up to eye watering levels and it is estimated that at least a fifth of rented homes are in a hazardous condition. 

So what went wrong?

According to Bano, fortified by his readings of Marx,  rented housing is an essential monopoly, which allows landlords to charge the most that tenants can bear. Most private landlords are small rentiers who have acquired their properties on “Buy to Let” mortgages.  and many of them rely on rental income to make up for “the slow dismantling of pensions, social care and adequate welfare provision”.  Tenants, the people least able to pay, are contributing to their landlords’ wellbeing at the expense of their own.  

Bano says that this is responsible for the house price inflation that has put home ownership beyond the reach of most people under 50. 

Bano is concerned by the ecological damage that mass house building will cause. His solution is to drive private landlords out of the market and replace them with a combination of council tenancies and owner occupation.  He thinks this can be achieved partly through community activism and, as one might expect from a housing barrister, through law reform. 

Bano predicts that if renting is no longer respectable and profitable, landlords will sell their properties and put their money elsewhere. Between 1939 and 1990, while rents were restricted, the shrinkage of the rental market was a gradual process which suggests it could be done again without too much of a shock to the economy.
As private rented property is sold off by landlords, house prices will fall, enabling younger people to become first-time buyers and councils to increase their housing stock by buying empty properties at affordable prices.  

The book makes some questionable assumptions: It claims that supply is not the issue, that abolishing private rented housing would of itself satisfy current demand. This cannot be correct- there are enough units of accommodation to house the population but only if second homes and underoccupied properties are included in the figures.  Bano does not grasp this nettle.  He also ignores the fact that many households are currently formed of people forced by financial necessity to live together, who want and need to form additional households. Bano argues that high sale prices are driven by notional rental value rather than scarcity. But surely house-prices of owner-occupied properties are driven by a number of factors such as mortgage interest rates and tax incentives. Possible rental income is a minor factor at best. It is unclear how large-scale municipalisation would be funded. Council accommodation has too often been of a low standard and the service offered to tenants has been poor.

None of this detracts from the fact that Bano is right when he claims that unregulated private renting is a bad thing and Britain would be better off without it in its present form. His book is an eloquent and persuasive argument to that effect.