Cities need powers to curb rip-off landlords and prevent 'unaffordable' rents

Mike Childs

19 July 2013

The news that renting a home in a third of the UK is unaffordable for many people is shocking. 1.3 million low to middle-income households are spending too much on housing says the Resolution Foundation. A figure that looks set to rise in an age of austerity with wages rising slower than inflation.

Shocking but not surprising. For two decades or more politicians on the left and right have promised to build more to make housing more affordable while wringing their hands when the homes fail to materialise.  But is building more homes really the only answer?

Where are the politicians with the guts to point out that rip-off landlords are also part of the problem? Where are the calls to give cities and local authorities the power to set fair rents?

Friends of the Earth's Big Ideas Change the World project has suggested cities need increased autonomy, including the power to set fair rents. Do you agree or disagree? Please comment below.

This week's report by the Resolution Foundation found "In a third of all local authorities, a low income couple with one child on £22k would have to spend more than a third of their income to rent the least expensive two bedroom property in the local area. In 10 per cent of local authorities, the same family would have to spend more than half of their income on rent." They go on to say "for a proportion of renters, high costs are not matched by a high quality offer for tenants. Certain parts of the private rented sector are badly run and poor quality and few landlords offer long term security for families."

They also found that across almost half the country it is cheaper to buy than rent, but only if you can afford the deposit. They said "it would take a low to middle income household 22 years to save for a typical first time buyer deposit, assuming they saved 5 per cent of their income a year".

In other words, some landlords are not only getting their renters to pay their entire mortgage but also making a nice little extra profit on top.

Some would call this a lucrative businesses others would call it a rip-off.

Shouldn't cities be able to set fair rents to prevent landlord rip offs? Please comment below.

I remember when Margaret Thatcher removed the powers local authorities had to set fair rents for renters receiving housing benefit. She also removed rules that provided renters with security of tenure. That set the ball rolling for rip-off landlords.

Is it now time for cities to regulate rents for the entire rented sector to ensure fair rents for all, regardless of whether they receive benefits? What do you think? Please comment below.

Fair rents alone won't deal with this shocking problem. Unconstrained rising land values also drive up costs. Fair rents are necessary, but so are more suitable homes in the right place, more social housing, shared ownership. And land taxes.

Cities need to be able to ensure adequate numbers of affordable quality homes in their areas. They can't do this when the free-market ideology reigns. They have to have the autonomy to regulate how the market works.

What do you think? Please comment below.

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