Earlier this year, Ed Miliband set out proposals for Labour’s housing policy when in power. On the face of it, his plans are generally positive and certainly a step forward for renters. Writing in the Evening Standard and focusing on London, he called for a national register of landlords and the regulation of letting agents – both policies that chime with Generation Rent’s belief that these sectors need minimum standards of management and more transparency for tenants. Of course, we await the exact details of these policies, which would require enforcement powers and resources to ensure that they were effective.
What really caught the eye, though, and then faded out of sight, was Miliband’s explicit linking of high rents to the cost of living crisis. There have been years of discussion and debate around living standards, but these have tended to focus on smaller (though still unfair) outgoings like energy bills, rather than the major cost to an individual or household – the rent or mortgage payment. Private renters are seeing rents continue to rise whilst wages stagnate, meaning they are unable to save up for a house deposit, whilst their spending falls away in other parts of the economy and landlords hoover up more and more of their income.
It is true that these affordability problems are more prevalent in London and the South East. But they point to a more general political problem that no one has been able or willing to overcome in recent years, that of supplying genuinely affordable housing. The chronic undersupply of housing in the last thirty years means that even if a huge house building programme is undertaken after the next election, it will be some time before that filters down into an effect on prices. Furthermore, those being built completely on the free market will still be starting at unacceptable levels of rent, accessible only to middle-income families and upwards.
Political solutions that focus solely on supply without considering the types of homes being built – and the need for a much cheaper private rented sector – will not solve the affordability crisis as it stands. Increased house building will eventually reduce pressure on prices, but in a market that is still demand-driven in the sense of being an essential need, and where a large amount of the sector is made up of buy-to-let landlords tied to specific mortgage terms, rents may even out, but it is unclear they will drop to the levels affordable for many. So yes, it’s important to hear rents being linked to the cost of living. But a supply programme must be focused specifically on cheap rents. Simply building a load more expensive homes in the PRS won’t have the desired impact on affordability, within a timescale relevant to people being exploited today.
