Memorandum by Mira Bar-Hillel (AH 01)
My name is Mira Bar-Hillel and I have been the
property and planning correspondent of the London Evening Standard
since 1982.
I am delighted that your committee is looking
into affordability and the supply of housing, as this is a matter
of grave concern especially in London and the South of England
where property prices have reached such levels that essential
workers can no longer afford to buy homes and are increasingly
being squeezed out of the region altogether.
I am, however, disappointed and disturbed that
the focus of your investigation is the further extension of home
ownership, while you have entirely excluded the vital subject
of the private rented sector. In my opinion more private renting
offers the only potential for normalisation of the UK housing
market, bringing it into line with the housing markets which prevail
in the rest of the Western world and in those countries which
are our main economic competitors.
Britain is on its own in having very high levels
of home ownership, complemented by a shrinking social housing
sector and a private rented sector which is only around one third
of its size in countries like France, Germany, North America and
Australia. Only around 11% of UK households rent privately (compared
with around 35% elsewhere), while in London around 17% rent, compared
with well above 45% in other capital cities.
In other countries young people—including
most of those essential public sector workers who we are at serious
risk of losing now—do not struggle to buy a home when in
their 20s. Instead, they rent cheaply and conveniently from a
large selection available in all sizes, locations and price ranges,
until they are truly ready to settle down in terms of family commitments
and long-term employment.
Indeed, many French and German families remain
in rented homes all their lives. They consider their monthly rent
as they do the gas and electricity bills: not "money down
the drain" (a peculiar British obsession) but a fair price
to pay for an essential need: a roof over one's head. When they
need to move house, it is relatively quick and cheap. Britons
move on average once every seven years, currently at an average
cost of between £10,000-£30,000 a time—now that's
money down the drain. Another benefit are far more stable housing
markets, without the house price rollercoasters we have in Britain
and without our constant obsession with house prices, booms and
crashes, which inevitably creates as many losers as winners.
On the continent and across the Atlantic landlords
and tenants are not at war with each other. They sign contracts
and abide by them. Tenants who misbehave or don't pay the rent
can be removed and they know it. Landlords, knowing the tenants
have choices, have every incentive to provide decent accommodation
at a fair price and none to neglect the property or abuse the
renter.
In Britain the law, the legal system and the
national psyche still see all landlords as potential Rachmans,
villains who cannot be trusted. Tenants are perceived as capable
of being only victims. As a result, tenants can play the system
and live rent-free for months on end, knowing the courts are reluctant
to evict and will always give them extra time. Some landlords
have lost tens of thousands of pounds to rogue tenants and given
up, others protect themselves by only letting to the well off.
The systems actually encourages only the worst landlords—and
tenants—to remain within it.
The only long-term solution to the affordability
crisis is, in my opinion, NOT to increase home ownership further
but, on the contrary, to aim towards an owning/renting balance
more in line with our competitors.
The government must set targets for increasing
the private rented sector substantially and initiate policies—including
changes to the law and the attitudes of the courts—which
will help make them happen. A bigger and healthier private rented
sector will not only allow more people more choice about where
they wish to live and how much they wish to pay for their accommodation,
but will bring to the economy much-needed additional flexibility
and mobility of labour which is currently hamstrung by the cost
of home ownership in general and the huge and growing cost of
moving home in particular.
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