The current topic of choice for property journalists and lately a growing number of politicians is the trumpeting of the uncontrollable toxic spread of rogue landlords (cue hands over terrified faces and cries of “OMG!”).
This is not to dilute the unacceptable practices of said rogues, but this is not a new phenomenon. Part of Fizzy Living’s launch marketing four years ago called for the end of ‘shonky landlords’, as the image, right, illustrates.
So why are there still rogues out there, and why are tenants queuing up to rent out their vermin-infested hovels? Why do articulate, educated professionals write national newspaper articles describing the disgusting temporary homes they share with unbearable flatmates, an extensive range of uninvited fauna and heating systems that only work in the summer?
This month, the British Property Federation (BPF) held an event to brief parliamentarians on the evolving build-to-rent (BTR) sector. Ten stakeholders were invited to put on displays of their work to show MPs and peers how the sector is taking shape and to quantify how many billions of pounds have been committed to long-term investment in the BTR sector. Each was given a two-minute slot to share its USPs, ideas and ambitions to the assembled luminaries. The stakeholders were preceded by housing minister Brandon Lewis. Despite the BPF selecting a venue on the parliamentary estate and providing wine and nibbles, only five delegates showed up; thus Lewis’s speech didn’t have quite the reach or impact that he may have expected. We were there to brief the colleagues, but the colleagues hadn’t made it.
This could have been because (and Lewis made no apology for this) the government’s lead property policy is to continue to back home ownership. The government has, he informed us, carried out research that confirms 86% of the population would like to own their own home. Really? I was surprised the figure wasn’t 96%. The question should have been: “Why can’t they?” It’s to do with supply and demand.
The minister went on to say that he was a big supporter of the BTR sector, but that we need to work harder at getting the word out. He reminded us that the government has advised local authorities to take into account the financial constraints of BTR schemes, which make them unviable when in competition with build to sell. The problem is that the advice is still not getting down to planning officer level, so in real terms the policy is about as much use as a zip in a sock.
Meanwhile, ‘UK Development plc’ continues to deliver half of the government’s own annual demand figure, while the BTR sector has around £30bn of committed equity trying to buy sites in competition with build-to-sell developers - a competition they can never win in straight financial terms.
So, we have an undersupply that is becoming critical if it is not already; we have delivery costs growing at several times inflation, with no immediate signs of stabilisation; we have the majority of new housing being delivered by private companies that have zero interest in flooding the market with affordable new homes; and we have £30bn of new equity investment in the hands of long-term private rental sector landlords and specialist developers, unable to get into the market to deliver the homes.
The way to get rid of shonky landlords is to rapidly build, and to keep on building, 250,000 new homes a year. That will only start happening when the prime minister, chancellor and housing minister stop wringing their hands while offering hollow support and take control of the problem.
Harry Downes is managing director of Fizzy Living
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