Regulations, government interference: Do rents in the UK have to be controlled?

[ahinton]

I dare say the 'small private landlord' manages things with a minimum of fuss and bureaucracy. Additional costs for a local authority trying to run the entire housing stock would be the armies of administrators (with sick pay, maternity leave, pensions, etc) and the banks of dodgy computer systems needing a whole other army to understand them.

Oh dear. I sound like an advocate for privatisation of everything which I certainly am not.

I'm not necessarily suggesting that local authorities' letting businesses cannot by nature be as efficient as those of private landlords but, up to a point, it is a matter of scale; any private landlord with rental stock as extensive as that of an average local authority would need armies of staff to run it just as would local authorities.

[Dave2002]

Re msg 29,

Does the landlord you mention actually maintain and provide good quality property?

As it happens we have a flat which we are trying to sell, and have looked at the rental options. There are so many obligations towards potential tenants that for the time being we are going to continue with the sale process. We were further put off when we talked to a letting agency about the need for registration, and the risks, both to the property, and also to actually getting the rental income.

I do know people who rent out property, but it does seem to me that there are significant risks. Some have been renting for years, and have what they consider good tenants, but I'm not sure that everyone is so lucky.

Why can't either private businesses or local authorities do this, to provide a good service? I feel that for many private individuals it may just not be worth the bother becoming a landlord.

[Barbirollians]

For all the problems that have undoubtedly emerged from that policy, I don't think that it hs been the unmitiated and universal disaster as which you appear to portray it and has in some cases helped to ease local authorities' cashflows in some of their more cash-strapped times.

They were not allowed to spend the money !

[ahinton]

Re msg 29,

Does the landlord you mention actually maintain and provide good quality property?

I really do not know for sure.

[ahinton]

They were not allowed to spend the money !

Whatever they might have been allowed to do with any monies received from purchasers of properties in its rented stock, they can't build/renovate/purchase/maintain/administer ever more social housing without paying to do so and if there are limits to the extent tgo which any of them can afford to do that, how are they supposed to keep providing more of it?

[jean]

If they could even provide what they had before Thatcher forced them to sell it off (and not use the proceeds to replace what had been lost), that would be a start.

In any case, the private landlord who (as we're told) is so vital in maintaining rental accommodation does not do so without the expectation of profit. There's no reason to think that the receipts from public rented housing were not, and could not be again, sufficient at least to maintain them.

[Barbirollians]

If they could even provide what they had before Thatcher forced them to sell it off (and not use the proceeds to replace what had been lost), that would be a start.

In any case, the private landlord who (as we're told) is so vital in maintaining rental accommodation does not do so without the expectation of profit. There's no reason to think that the receipts from public rented housing were not, and could not be again, sufficient at least to maintain them.

The cost of subsidising social housing I doubt was anywhere near as high as the costs of subsidising landlords through housing benefit. The Government was warned in 1988 when they deregulated the private rented sector that this would lead to an explosion in HB and that has happened .

[ahinton]

If they could even provide what they had before Thatcher forced them to sell it off (and not use the proceeds to replace what had been lost), that would be a start.

In any case, the private landlord who (as we're told) is so vital in maintaining rental accommodation does not do so without the expectation of profit. There's no reason to think that the receipts from public rented housing were not, and could not be again, sufficient at least to maintain them.

All rentals, whether social or otherwise, have to make at least some profit otherwise the properties would not be adequately maintained, administered, insured &c. Whetever you may think about the difference of emphasis betwen the profit motives of private landlords against those of local authority ones (and however right your thoughts might be), it is surely obvious that local authorities alone cannot - and cannot afford to - supply anything like sufficient rental properties to meet all demand. Even if the rents were sufficient to maintain local authority housing, it's not just maintenance costs that must be met - it's all the other costs as well, not least initial acquisition and/or construction costs.

[ahinton]

The cost of subsidising social housing I doubt was anywhere near as high as the costs of subsidising landlords through housing benefit. The Government was warned in 1988 when they deregulated the private rented sector that this would lead to an explosion in HB and that has happened.

Sure, but this is not an unlimited free-for-all; there are strict caps on housing benefit levels, although these vary from one local authority area to another. More importanly, however, housing benefit is paid to local authority tenants just as it is to tenants of private landlords as long as the tenants are entitled to it.

[jean]

Why on earth do you think local authority housing could not cover its costs?

Yes, private landlords charge higher rents. But they expect a level of profit that public bodies do not need to make.

[ahinton]

Why on earth do you think local authority housing could not cover its costs?

That's not what I said; what I'm referring to here is that local authorities cannot cover the costs of ever more social housing becauase the income from it is not sufficient to enable it to afford to do so, especially when the costs of acquiring more of it are taken into consideration; as I implied, it's not just the running costs of maintenance, administration, insurance, &c. of existing social housing, it's the large capital costs of planning/acquisition/construction/renovation required for the expansion of local authorities' housing stock that are at issue.

Yes, private landlords charge higher rents. But they expect a level of profit that public bodies do not need to make.

True as that usually is, what's to be done about it when there's nowhere near enough local authority housing stock to go around to meed demand?

[jean]

That's not what I said;

Yes it is, because this is also what I'm referring to:

...what I'm referring to here is that local authorities cannot cover the costs of ever more social housing becauase the income from it is not sufficient to enable it to afford to do so, especially when the costs of acquiring more of it are taken into consideration; as I implied, it's not just the running costs of maintenance, administration, insurance, &c. of existing social housing, it's the large capital costs of planning/acquisition/construction/renovation required for the expansion of local authorities' housing stock that are at issue.

But unlike you, I believe there is no reason why local authorities could not do this, other than lack of political will.

[Dave2002]

Chickens coming home to roost, more like. One of the worst aspects of this apalling policy was (is?) that councils were not allowed to spend the proceeds on building more housing. It was quite obvious that 'social housing' stock would decline - but this, no doubt, was what the lady wanted. The Labour policy of only giving money to councils to improve housing stock if they handed the houses over to private housing associations excaerbated this.

We could view that as malicious, but perhaps she was merely misguided, and didn't realise how things would turn out.

If one has notions of trickledown, and suchlike, then some economists argue that by encouraging the risk takers, and generally the better off, there will be better standards for all. If Mrs T believed that, then maybe she thought that if houses passed into private ownership, and if the economy as a whole did better, then in fact the demand for social housing would drop. That's a charitable view.

What has actually happened is that although some very rich people have "done well for themselves" there are now vast numbers of poor, and also not so poor people, who are having great difficulty finding anywhere to live, and of course particularly to buy. So selling off housing stock, and not having any sensible means of replacing it, either by public or privately managed rental accommodation, does not, in hindsight, seem to have been a great idea at all.

[ahinton]

unlike you, I believe there is no reason why local authorities could not do this, other than lack of political will.

Unlike you (or so it would seem), I cannot perceive how political will alone can enable local authorities to expand their housing stock; they need money to do this and that has to come from somewhere. As I stated, I'm referring here less to ongoing expenditure on maintenance/administration/insurance of existing stock which can hopefully be done from rents received amd more to acquiring new stock which involves substantial capital outlay which has to be funded somehow; there are bound to be limits on this and, as these could never be overcome to the point at which the majority of rental housing is local authority owned and run, the need for private landlords will be an ever present one. If, as I assume, you believe that I'mwrong about that, could you explain what it is that you think I'm missing here?

[ahinton]

We could view that as malicious, but perhaps she was merely misguided, and didn't realise how things would turn out.

If one has notions of trickledown, and suchlike, then some economists argue that by encouraging the risk takers, and generally the better off, there will be better standards for all. If Mrs T believed that, then maybe she thought that if houses passed into private ownership, and if the economy as a whole did better, then in fact the demand for social housing would drop. That's a charitable view.

What has actually happened is that although some very rich people have "done well for themselves" there are now vast numbers of poor, and also not so poor people, who are having great difficulty finding anywhere to live, and of course particularly to buy. So selling off housing stock, and not having any sensible means of replacing it, either by public or privately managed rental accommodation, does not, in hindsight, seem to have been a great idea at all.

That balanced view is about it, I'd say; the Thatcher policy (and had it not been that of the government that she led, someone else would surely have done it) of ight to buy has benefited some people and ultimately disadvantaged others; I cannot say that I'm especially surprised about either outcome, frankly. The fact remains in any case that thee are people who find it difficult to afford both private and public rents, hence the need for housing benefit in order to help them the cover both private and public rents.