Channel 4 Dispatches did a TV report yesterday on the private landlords who are buying strings of former council properties, houses and flats, to re-let them at a higher rent.
This is not a new phenomenon, but they are right that the problem is getting worse, also that the re-sale prices of many of these properties and the extortionate rents charged put them way out of reach of the people on a modest wage who were originally supposed to occupy them.
The landlords use crooked illegal means to buy the properties at discount. They lend money to the present occupier who can legally buy it as a discount, making a contract to buy it from that occupant when the five-year term expires.
Ex-council flats in central London are rented out for £2,000 per month.
Meanwhile English families are desperate for a home. In most areas the waiting list for a council house is five years. In Oxford many council tenants are being kicked out of their homes because their parents, the original occupants, were there before them and the council tells them they cannot stay on. A single mother here in Oxford was told that she had to move to the far West of England or the North to get a council flat.
The sale of council housing under Mrs Thatcher was one of the most controversial Tory policies and if its long-term aim was supposed to be to enable more ordinary citizens on an average wage to be able to own their own homes, it has not succeeded. Its short-term aims were to get more money into the coffers of the local councils, enabling them to repair, and re-furbish the properties that remained, which were often very badly delapidated or worn out twenty years after they had been built. That helped to keep council tax down and it benefitted the first lot of purchasers who were awarded sizeable discounts. Owner-occupiers maintain their properties, putting time and money in, and the fact is that many tenants don't bother.
But the long-term results have been bad enough for me to feel that the policy was wrong and some major intervention is now needed from the government to alleviate the situation. Apart from anything else, local authorities now pay out a fortune in housing benefit for people who can't afford the private rental sector and cannot get council housing either. So council tax goes up.
What we have now is a rental market that is vastly inflated and the Dispatches programme also mentioned that many of the large-scale property magnates are foreign, so the money is going out of this country.
I am not against private rentals and I am very aware that private landlords often suffer severely from selfish, irresponsible, non-paying tenants or those who are absolutely filthy and fill the place with rats. It is only the ermergence of property magnates who own multiple ex-council properties and run them as a large-scale business, making millions, that concerns me.
I would suggest a policy that ex-council properties must be owner-occupied, or sold back to the council at the original price. The law could also limit the number of ex-council properties that any one person could own. If you couldn't own more than one and couldn't rent them out, it would stop a lot of this racketeering. I would also suggest putting a hold on the upcoming legislation to make Housing Associations sell their rental properties.
Lenten Meditations: Saturday 25 March
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