15:34 PM, 9th January 2018, About 5 years ago 30
Baroness Valentine, a former banker and the wife of a venture capitalist, is the latest to have a go at private landlords (a common enough diversionary tactic to have a go at an unpopular group when you yourself are amongst the most privileged in society). In a debate on Industrial Strategy she made the following contribution:
Blackpool’s housing is an example of where amending unhelpful national policy could even save the Government money.
Blackpool has at its heart a private sector slum, fueled by public money.
Properties in wards such as Claremont and Revoe are largely privately owned and their occupants are on benefits.
From the landlords’ perspective, there is little incentive to keep the quality up but much incentive to house the maximum number of tenants with guaranteed housing benefit.
As a result, Blackpool attracts, and landlords advertise for, a disproportionate number of people with complex needs from all round the UK. At the crux of the problem is housing benefit paid according to a Whitehall formula which would not reflect the real market rate for such poor-quality housing.
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Well, I have news for Baroness Valentine. In many areas of the UK, public money will pretty soon not be ‘fueling’ ‘private sector slums’ as she calls them, as landlords increasingly withdraw from this difficult market.
In her intervention, she makes some extraordinary points. Why, for instance, should she be against landlords housing people with complex needs? I would think the landlords would receive praise for this. I wouldn’t want to do it as the risk of rent arrears and damage to property would be higher. And, as we also all know, landlords cannot just let their properties go unmaintained, as she implies, as councils have significant powers to make sure landlords keep properties up to standard and it is in landlords’ interests to protect their asset and to retain decent tenants. Often, housing will be appear unmaintained, because the tenant is not maintaining it and can even be damaging it! So it is wrong to say landlords are the only people responsible for ill-maintained property.
We also all know that councils are desperate to access private sector housing for the people on their waiting lists, so slagging off the providers of this for daring to charge for the service is outrageous. I received a call just this morning from someone working for a Housing Association who said she has been charged by the Welsh Assembly with identifying and combating barriers to private landlords letting to those on benefits. I explained how Section 24 means landlords have to maximise rents to pay tax on fictitious profit (basically gathering more in rents to hand directly to the Exchequer), and how this and Universal Credit are pushing landlords away from this market. I pointed out how councils also are taxing landlords in the shape of costly licensing schemes, how councils and organisations like Shelter are not too proud to beg landlords to house people but then stick the knife in when those tenants turn rogue. She said that she personally could vouch for some of the people needing accommodation. I forgot to ask her to stand as guarantor! As I said to her, we landlords are asked to take risks, are told that these people will not default, but the ‘caring’ souls who advocate for them will not put their money where their mouth is and under-write this. And yet they are happy to ask us to take those risks.
There is going to be a rude awakening as gradually the likes of the Baroness and the others who slag off landlords for plugging the gap in the housing deficit and housing the poor, see that the number of people in the PRS receiving benefits decreases. The amount councils spend will of course get bigger however as the low-paid and unemployed will have to stay in more expensive hostels, caravans, tents – whatever the councils can come up with as the homelessness problem increases as a direct result of Government interference. Dealing with the knock-on societal consequences – disruption of family life, chaotic lifestyles, interrupted education and damaged life chances, mental health, drug and alcohol problems and so on – will also not come cheap.
So I advise Baroness Valentine and others who on the one hand beg landlords to house people and on the other, slag them off for doing so, to watch what they say as all they are doing is further damaging the chances of the poorer tenants to obtain housing. Landlords who move away from this market will be relieved to no longer be accused of ‘stealing’ tax-payers’ money by housing those in need. And those seeking to prove themselves as the champions of the poor will have to find another target for their vitriol.
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