Stablising rents of private lettings in London
Rents in London have risen by a third over the last three years, with tenants paying up to half their income to a landlord, following an exceptional rise in the capital’s population. The high prices of properties and amount of mortgage deposit required have made first time purchase prohibitive for many. There is a need to address the problem because unlike the production of food or clothes, a change in the supply of housing is a slow process; so short-term intervention is justified to mitigate the worst effects of the acute shortage. It is an opportune time to launch a project as political activists will be keen to take up new issues to make an impact before a 2015 General Election.
Aim / vision
To bring to the attention of policy makers in government and the political parties the work of historians, such as Martin Daunton, on how governments in the Twentieth Century dealt with crises in the private letting sector and ways that the disadvantages of regulation could be avoided.
- The history of rent regulation in Britain goes back almost a century and has taken various forms.
- Private rents became a political football after the Second World War with Labour maintaining an attachment to control, but the Conservatives experimenting with deregulation.
- In an attempt to find a solution acceptable to both landlords and tenants, Harold Wilson’s government introduced ‘fair rents’ in the mid 1960s and these remained on lettings arranged until the end of the 1980s.
- Since then new lettings have been deregulated, but this has failed to induce the private sector to build houses for letting, the new supply coming from small scale ‘buy to let’ arrangements, i.e. properties built for owner-occupation and social housing acquired under Right to Buy.
- A full explanation of the development of private lettings over the last 50 years would show that what tended to deter property owners from entering the letting market was the imposition of permanent security of tenure rather than the levels set for fair rents.
- Rent stabilization could be achieved through levels being set in each borough by the Valuation Office Agency which holds records of all property transactions and fair rents.
- There has been little debate around rent regulation and Boris Johnson has dismissed the idea on the grounds that it would restrict supply. So the real cost of unchecked rents needs to be put to policy makers, not least the burgeoning benefits bill (the new cap only addresses the symptoms!)
- There is a growing body of public opinion that recognises that it is destabilising to society for excessive rents to be allowed to go unchecked. Until recent years, a sum equivalent to a week’s income was considered the maximum that a householder could afford to pay for a month’s rent.
- The long term solution to the shortage is a bi-partisan policy to encourage (perhaps through tax breaks) the large financial institutions – i.e. building societies, insurance companies and pension funds – to invest in the development of domestic property for letting. But in the short term, the emergency in London calls for special measures.
- The promotion of bi-monthly seminars between historians, academic researchers in housing and professional practitioners until July 2013 attended by officials from the Department for Communities & Local Government and the Greater London Authority.
- The success of policy influence will be measured by whether a significant impact is made on policy makers in government and the main political parties.
- It is recognised that this will be a challenging task because non-interference in private lettings has become part of the received wisdom of the age; so historians should demonstrate that a hands-off approach is based on thinking of the 1980s which is no longer applicable in 2013.
- The plan is realistic as a first step in achieving an attitudinal change. It should emphasise that this is a temporary measure until the long-term solution is found involving the financial institutions.
- Housing policy makers in central and local government; officials from Whitehall and City Hall.
- The Housing Minister, Mayor of London and their shadows in the Labour Party, the Lib-Dems and London MPs and political activists.
- Launch the research project on a viable solution to stabilize rents by seeking the involvement of (1) a research centre such as the LSE Greater London Group and (2) a professional institution such as the Royal Institution of Chartered Surveyors or Chartered Institute of Housing.
- Work with academic specialists in housing history on seminars with the research centre and professional institution.
- Urge the historians, especially those directly involved in the project, to contribute a research policy paper or opinion piece for the H & P website.
- Seek the involvement of a newspaper or journal to ‘sign up’ to investigate the problem on the ground and promote the outcome of the research seminars. This could be on the lines of the Evening Standard’s promotion of reading in London schools.
Monitoring and Evaluation
It is recognised that outright success is unlikely, but by no means impossible.
- The immediate impact of seminars to be monitored by the use of H & P feedback forms issued to participants.
- Wider interest in the project to be gauged by monitoring any debate on Twitter and the blogosphere.
- Media tracking to be used to assess the amount of attention the project has generated, especially any serious debate in the signed-up publication and other newspapers, periodicals, TV and radio before the party conferences in the autumn.
- The project can be counted as fully successful if there is feed-back by the end of 2013 from Whitehall or City Hall officials that a temporary solution to the London rents problem is taken seriously by politicians in power.