At the time, Labour criticised suggestions that future developments might not cater to lower-income households. As it stands, this will still be the overarching problem if this is the new government’s intentions for the UK’s private rented sector.
For example, in London it is now common for tenants to spend well over half of their income on housing. In fact, a recent investigation by The Independent revealed that more than 50,000 families have been silently shipped out of London boroughs in the past three years alone.
The leaked documents exposed the true scale of the ‘social cleansing’ that took place on an unprecedented scale across the capital due to welfare cuts and soaring rents, creating an increasingly segregated city. This coincided with the Coalition’s introduction of the benefit cap and bedroom tax, both of which have made it significantly harder for those on low income to afford housing.
In my opinion, the recent announcements on cuts to social rents, changes to buy-to-let tax relief and regulatory intervention in the buy-to-let market will only continue to demotivate landlords who are significant contributors to the UK’s economic growth. According to a survey by the National Landlords Association (NLA), a quarter of landlords are already planning on reducing their portfolios following the budget announcement, alongside an additional five per cent who are intending to sell all their properties.
I am still baffled by the government’s move to clamp down on the buy-to-let market. The NLA recently revealed that 78 per cent of UK landlords let between one and two properties, and three in ten landlords with a single property only manage to break even or run at a loss. Property is a typically long-term investment, and yet there is a popular misconception that landlords enjoy lucrative gains with next to no effort or patience required.
The only realistic assumption I can make at this point is that there is an undisclosed move to drive institutional investments into the private rented sector. Yet it is private investors who fulfil the housing needs once serviced by the social sector; tenants on lower incomes or in receipt of benefits, those individuals who will only be forced to spend more, or relocate further, if we continue along this path. This begs the question – is the new government fulfilling its housing manifesto at the cost of tenants?
Institutional investment into the private rented sector is most welcomed. In reality, the Prime Minister’s suggestion of earmarking brownfield sites for housing could fundamentally open doors for such ventures. However, I believe that both private and institutional investors play an absolutely pivotal role in addressing today’s housing crisis, and the government should not forget its obligations to either group – or the tenants whom they house.
