All private rented homes should be brought under the management of local authorities, delegates at a pensions conference were told this week.
The proposals involve all private rented housing coming under the management of institutions, including local and national government, and were discussed at the Pensions and Lifetime Savings Association's annual local authority conference.
In the session 'Creating a more sustainable and affordable UK housing market' James Lancaster, head of corporate at residential asset manager G2M group, said the UK “cannot build its way out of a housing crisis”.
Housing stock was not the problem, G2M claimed, rather the lack of a properly regulated private rental sector, which was dominated by landlords who regarded their properties as assets rather than social enterprises.
Private rental sector ‘subsidised by the taxpayer’
Lancaster said England’s rental sector was made up of 4.9mn homes, with a value of £1.3trn.
He added: “It is almost entirely made up of private individual landlords with a level of fragmentation, 62 per cent of our private rental homes are owned by landlords.
“This is significantly less than any other major comparable country in the US. It's over 20 per cent, rising to nearly 50 per cent in the Netherlands and Switzerland.”
G2M also dismissed the private rental sector’s claim to be ‘private’ when many privately rented homes were being subsidised by local authorities via housing benefit.
“There are 2.8mn households receiving housing benefit alone in the UK and 700,000 of these families who want to reside within the social sector now find themselves living in privately rented homes.”
Temporary housing landlords
G2M had used publicly available data to find the main cause of homelessness was landlord eviction, and not lack of housing.
In Greater Manchester over 50 per cent of the local authority’s temporary accommodation demand was driven by section 21 evictions.
Lancaster urged delegates, who are collectively responsible for over £354bn, to look at stepping in and managing all private rental accommodation as an enterprise.
He pointed out that local authorities were also being held over a barrel by providers of temporary accommodation which was costing the taxpayer billions of pounds because those landlords overcharged for the property,
“For example, the West Yorkshire family home might rent for roughly £7,000 per year. The local authorities are instead having to pay the equivalent of £49,000 for the same family to live in temporary accommodation.”
“All arguments around fixing the housing crisis revolve largely around supply side issues, specifically the need to build more homes. The development lobby have indeed been very busy
“Over the last 20 years, England has seen a net increase of just over 4mn homes but homeownership has increased by just under 1.4mn additional payments.
“Despite building as aggressively as possible, a social sector made up of homes owned by local authorities, housing associations and other registered providers has seen its stock actually decreased by three per cent.”
“Since the inception of Right to Buy the social sector has been required to sell 2.1mn of its homes.
