May 6, 2021

The British Housing Market: How we fix it!

The average household in the United Kingdom that has a mortgage spends around 12% on housing, whereas the average renting household spends 36% on housing costs, though it’s not uncommon for renting households to spend more than 50% on their housing costs. Around 20% of houses in the UK are rented out, and this is on the rise, thanks to speculation in the housing market driving up prices for ordinary people. Rents are set at exorbitant rates and have become a de facto tax by the wealthy on the poor, the penalty for not paying being eviction and homelessness.  

Most of our generation will either struggle to buy or will never be able to do so. They will struggle through a rental market based on ratcheting up prices for normal people in order to keep the profits flowing in for the wealthy vampires that decided to get into the business in the first place.  

Buy to let mortgages, little to no rent controls, easy eviction, housing benefit, and the comparative tax paradise for Landlords, in the UK, has led to a housing system that is increasingly barrelling towards neo-feudalism. All the while, we’re told by politicians that there isn’t enough housing in the UK, and that we need to build a bunch more, but this isn’t true. There is more than enough housing in this country… if you are wealthy. 

Landlords also evade regulation of conditions and housing quality, given the coercive nature of the relationship between the landlord and tenant, resulting in 46% of tenants who complain to the council being summarily evicted. Meanwhile, landlords are on the up in an economy increasingly based on the exploitation of normal people for private profit, and now the Chancellor has just announced that the cuts in stamp duty will be extended, thereby incentivising opportunist landlords to swoop in and grab property at cheap rates, instead of allowing first-time buyers to have a chance- the people who ultimately end up paying for someone else’s house through buy to let mortgages (which are about as close to theft as it is legally possible to get).  

Ultimately we’ve somehow decided that a housing system that is riddled with parasites, rigged against the common person, and propped up by the disastrous Conservative government, is the best we can get, but it really doesn’t have to be this way. At all. This is not as good as it gets. 

We can start by removing the tax protections we give landlords, and taxing the entire rent received by the landlord, rather than just the profit. We can also make rental income immune from becoming part of the personal allowance, and make all rental income taxable, not just rental profit over the £12,500 personal allowance. We can also ratchet up taxes on the properties themselves, by introducing a series of direct property taxes that increase by the number of properties that one owns – to try and force landlords to sell up and free up property for people lower down the property ladder. We should also consider actual rent controls, too. Putting a cap on rents in cities, where they can skyrocket to insane levels, will definitely help with this crisis, as it gives better prices to normal people and also encourages landlords to sell up. It drives them out of the property market, which in the long run reduces purchase prices. 

We can also make it harder for landlords to evict tenants, and make the system of dealing with complaints easier, so as to stop landlords using coercive tactics to get away with selling their tenants subpar accommodation. We’ve fundamentally got to devise a number of reforms that are designed to make it financially difficult to become a landlord, and to acquire a second property. Boris Johnson’s 95% mortgage plan may help some people, but if you’re coughing up such a vast proportion of your wages to some landlord, you’re not exactly going to be able to save even 5% of a total mortgage. We have to therefore encourage local governments to adopt rent controls and adopt a national standard that puts a hard cap on rents to stop the prices from being ratcheted up and up into eternity every time a landlord fancies a new Mercedes. We’ve also got to also ban buy to let mortgages, completely. They’re a testament to what happens when greed intersects with people’s lives, and have proven to be a complete disaster, allowing for rampant speculation to go on in the housing market, with the only goal being to provide as much profit as humanely (and also inhumanely) possible, constantly squeezing every last penny out of tenants. We’ve also got to get past the myth that there’s a housing shortage in the UK. There isn’t. What we do have, however, is a wildly inefficient housing market that provides only for the richest in society, while treating the common person as stones from which they have been allowed to squeeze gallon after gallon of blood for too long, and it is frankly unable to provide the basics to ordinary people because of its desire only for profit, rather than for affordability.  

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