Buy to Let

The Problem

The average UK house price is over 10 times the average UK salary, more than double the long term average and more than double the 4:1 ratio of what most mortgage lenders offer. Home ownership, in most of Southern England, is only an option for those born into family wealth or for those who earn astronomical salaries.

There are over a million people on social house waiting lists vying for an ever decreasing amount of homes, meaning that social housing is also out of reach for most of us.

This means that millions of people have no choice but to rent in the private sector; which is why the number of UK private renters has more than doubled in a decade to 12 million.

Because private renting in the UK was seen as a temporary solution on the way to home ownership or as a lifestyle choice we have less protection than our compatriots in Europe; in fact we have the shortest tenancies and highest rents in all of Europe.

Homelessness is increasing, as people priced out of home ownership and unable to access social housing can no longer afford to keep a roof over their heads.

Perversely, because house prices are so high, those people with lots of money who already own a home are able to snap up ever more of our limited housing stock at the expense of First Time Buyers.

Therefore for the first time since the 2nd World War the amount of First Time Buyers and people that own one home of their own is decreasing. Whilst the amount of multiple homeowners, particularly Buy to Let landlords is increasing. Social mobility, which for 50 years after the 2nd World War increased as home ownership was handed from the landlord ruling class to working and middle class individuals, is now once again going backwards. How to reverse this trend?

Simple maths makes it easy to see that the more people who own multiple homes, means the less people that can own one home of their own.

The Solution

Longer tenancies in the private sector. The current 6 month Assured Shorthold Tenancy is not suitable for 12 million UK citizens, including 3 million children.

Affordable private sector rents. The current situation of 12 Million UK Private Renters having to pay the highest average rents in Europe is not acceptable.

End tax breaks for Buy to Let landlords ensuring that First Time Buyers have a better chance of owning one home of their own.

The Benefits

Longer tenancies in the private sector will help reduce stress for 12 million people. They won’t have to worry about the 6 monthly chance of having to uproot, move their possessions and leave behind their local community and friends.

We can then ensure that the 3 million children who live in private rented accommodation have more stability and security in their lives.

Longer tenancies will enable these children to attend one school and make friends rather than suffer the possibility of being uprooted and having to move schools and leave their friends behind.

The benefits to their parents as described above will no doubt create a more harmonious home environment giving the children a better chance in life.

Longer tenancies will create a better sense of community as residents get to know each other and private renters take more pride in their homes and feel a greater sense of belonging to their local area.

More affordable private sector rents will help the taxpayer by reducing the £10 billion a year of housing benefit that is paid to private landlords.

It will mean that the parents of the 3 million children living in private rented accommodation will be able to better feed and clothe their children, reducing the need for food banks.

Affordable rents will enable people from poorer backgrounds to live within their means and save for a deposit for a home of their own increasing social mobility.

It will enable commuters who work in central London to live nearer work, therefore reducing pressure on our roads and rail network, therefore helping the environment.

Affordable rents will reduce homelessness as people living in cities can afford to keep a roof over their heads.

Longer tenancies and more affordable rents, along with the abolition of tax breaks for Buy to Let landlords will reduce the incentives for Buy to Let landlords and increase the amount of homes available for First Time Buyers.

This will enable more people to own one home of their own and stem the decline in home ownership and reverse of social mobility. It will allow the return of working and middle class people from low income backgrounds to be able to afford a home of their own once more.

Enabling more First Time Buyers to buy existing stock and own a home of their own will also reduce pressure for building yet more houses and protect our greenbelt and countryside.

Policy of Political Parties

The Conservative Party are currently in power with 330 seats in parliament with 36.8% of the national vote.

They have no plans to help the 12 Million UK Private Renters by increasing the length of our tenancies from 6 months or ensuring affordable rents.

I like to think that most Conservative MPs are decent intelligent people with a social conscience who are simply unaware of the scale of the problem. And that when the facts are presented to them they will respond compassionately.

I do hope their policy is not born out of pure greed and selfishness; since most of the cabinet, their donor’s, lobbyists and media friends, are making a lot of money as Buy to Let landlords.

The Tories seem to have an aversion to rent control, but surely even they can see the benefits of increasing Europe’s shortest tenancies for the 3 million children who have no choice but to live with their parents in the private rented sector?

The Labour Party have 232 seats in parliament with 30.5% of the national vote.

Their current policy set out on their website is to create stable 3 year tenancies (instead of 6 months) for private renters with rent increases during that time linked to inflation.

They also state that they will ban letting agent fees for tenants and create a national register of private landlords to drive up standards.

Sadiq Khan the Labour London Mayor is campaigning for a London Living rent whilst Jeremy Corbyn the Labour leader is quoted as saying that he wants a much better deal for private renters.

The Green Party have 1 seat in parliament with 3.8% of the national vote.

Their website states that they want to cap private sector rent and introduce longer tenancies.

The Liberal Democrats have 8 seats in parliament with 7.9% of the national vote.

Their website as of yet makes no comment about private renters.

UKIP have 1 seat in parliament with 12.7% of the national vote.

Their website as of yet makes no comment about private renters.

The SNP have 56 seats in parliament with 4.7% of the national vote.

The Scottish Government have already banned Letting Agents Fees in the private rented sector. When will England follow suit?

The Scottish Government are according to their website “consulting on a new tenancy for the private rented sector”. Many SNP MP’s are also backing rent controls. So we’ll have to watch this space for Scottish policy announcements.

Plaid Cymru have 3 seats in parliament with 0.6% of the national vote.

They state on their website that they would implement rent controls if in power and the Welsh Assembly have already brought in powerful legislation to help those in the private rented sector and tackle homelessness.

Unfortunately most private tenants live in England and we cannot benefit from the potential progressive policies coming out of Scotland and Wales where rents are on average lower than England anyway.

Action we can take

If your MP is Conservative please email them and ask why it is acceptable for the 12 Million UK Private Renters (including 3 million children) to have the shortest tenancies in Europe. Challenge them why Labour is offering 3 year tenancies instead of the current pitiful 6 month tenancies that prevent people stuck in the private rented sector from setting down roots and making a success of their lives.

Ask them if vested interests, i.e. most of the cabinet, and their donors, lobbyists and media friends, are making a lot of money from their Buy to Let portfolios, are the real reason preventing them from setting tenancies of a fair length and affordable rents?

If your MP is from another party then please email them and ask them to challenge Tory policy in Parliament.

Philip Hammon, the Chancellor and Gavin Barwell, the Housing Minister are the two people with potentially the most power to change current government policy.

So regardless of who is your MP please email them to ask if they will increase the length of UK tenancies.

If by 2020 the current government is still only offering Europe’s shortest tenancies and highest rents for the 12 Million UK Private Renters then I’d seriously advise these 12 million people to vote for another party.