Today I fell across an article in the Financial times that really summed up so much of what is wrong with renting at the moment and how what landlords want to keep their businesses afloat is a million miles away from what tenants need, which is in itself indicative of the fact the there can be no mediated middle ground.
The article itself is titled “London landlords feel the burden of buy to let” and goes on, for ,the most part, to detail how landlord income has been hit so much by government legislation and Covid problems but it’s the comments that speak volumes.
Landlords have indeed been hit by increasing legislation and tax regulation that make being a landlord a less attractive financial prospect than it was 5 or 6 years ago but it’s the calculating sense of entitlement that really got me today.
Renters want homes but these are the reported comments of landlords in the article:-
Landlord Phillip Cooper is reported as saying “The mortgage costs have gone up, the tenants more demanding”.
What exactly Mr Cooper means by “Demanding” is not made clear. Tenants who know their legal rights perhaps? Better property conditions? All we see there is that his reason for getting out is that the people who were paying for his investment were getting too problematical.
Isnt one of the basic tenets of free market principles built on more demanding consumers fuelling competition?
The article also goes on to tell us that Mr Cooper’s wife “Sold her 2 bed flat investment after having to drop the rent from £2,150 per month to £1,600.”
£2,500 per month for a 2 bed flat??? Is this a market rent or just rampant profiteering at the expense of renters? Who the hell can justify that sort of rent level?
Again the article goes on to tell us that Mr Cooper, already earning a sizeable income found the tax on his rental income putting him in a position where he was “Barely washing his face” with the rental profits”. Presumably expecting some form of sympathy from the reader.
Later on he tells us “The yield on it is pretty awful, In the stock market at least you don’t have to worry about the boiler breaking.”
By “Yield” do you mean a person’s home by any chance? Sorry to disappoint you Phil.
Further down the article landlord James Cash reported that “The margins got smaller, the cash flow wasnt nearly as good”. Further advancing the notion that landlords aren’t housing providers, just investors and that people’s homes take second place to “Cash flow”, which is what landlording is really about.
Even renter Max Turner reports that since his wedding photography business has understandably tanked recently “Most adverts for rooms and whole flats exclude those on universal credit”, flagrantly disregarding the June 2020 court decision that it is unlawful to discriminate against renters on benefits.
Forget high court decisions, its just business as usual.
As an enforced homeworker I sit, fielding phone calls, zoom meetings and tapping away on my laptop with TV on silently in the background, where for an hour each morning I glance up and am subjected to the hell that is BBC1’s Homes under the Hammer.
A property porn programme populated occasionally by rogue landlords of my acquaintance.
What irks me the most is the unquestioning attitudes of the presenters who seem keenly interested in the plans of new purchasers to cram as many people as possible into ever dwindling room sizes in the name of a good investment.
This week I saw a couple who had bought a vacant plot of land with planning permission for £48,000.
They were explaining to the eager presenter that they were considering whether to build two properties on the land or three smaller ones.
The quality of the accommodation wasn’t discussed, the landlord simply offering up “3 houses would be better for me”.
I’m really glad that is better for you. How nice. Lets build properties within a centimetre of room space standards, so we dont actually break the law but dont have to worry about decent homes or quality of life.
A few weeks back I watched an episode where a developer, buying at auction and asked what his plans were said “I’ll see how it works out. If the quality is good I’ll sell it on., if its not so good I’ll rent it out”.
So sub-standard accommodation goes to renters while the decent stuff gets sold, probably to more landlords.
See a pattern emerging here?
Today’s Home Under the Hammer gave us an enthusiastic developer and an equally enthusiastic presenter discussing how he could fit an extra 2 rooms into his new 5 bed HMO to create ever smaller units whilst staying this side of planning laws, as if all this was just common sense.
For the landlords, for the BBC, its all about profit and nobody asks any more questions.
There is a pertinent line in the first Jurassic Park film where Jeff Goldblum’s philosopher says to Richard Attenborough’s enthusiastic dinosaur scientist “ You spend so much time arguing how you could but none spent arguing if you should”.
Landlords are not housing suppliers, they are investors.
They don’t provide housing, they buy it up and then re-market security of tenure only as long as it is profitable and in the monopoly of house buying and high rents, exclude other people from the market.
I know this sounds dramatic and revolutionary but in my view small private landlords are a key part of the housing crisis, not a solution.
I don’t mean that they are individually bad people, I just mean they buy into and fuel a market that is destroying the housing dreams of millions, whilst perpetuating the housing shortage.
The attitudes of the landlords interviewed by the Financial Times and the unquestioning attitudes of the presenters on Homes Under the Hammer speak volumes.
There is ample evidence that a shortage of housing isnt the real problem, its really about accessibility and affordability.
Councils sell off estates rented out at social rent levels, whilst replacing them with fewer units at “Affordable rents”, which, lest we forget, is 80% of the market rent, which in London at least, is a long way from affordable, especially if poor old Mrs Cooper with her £2,150 per month 2 bed flat is anything to go by.
Last week I was filming an ITV documentary on evictions in a rented city tower block where nobody real appeared to live.
The London skyline is festooned with cranes, erecting glass monstrosities financed by drug dealers to launder money that nobody is going to be able to afford to live in on an “Affordable rent” .
The private rental investment market is a truly toxic business model
by Ben Reeve Lewis