Monday, March 21, 2016

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Blood Sucking Private Landlords

Mick Hall @ Organized Rage writes:

In the UK we have a Rachman like rentier class of blood sucking private landlords.

With monotonous regularity members of the Tory government and their gophers in the mainstream media are attacking council and housing association tenants. Even those journalist like Polly Toynbee who supports publicly funded housing often repeats their lies by claiming Housing Association and Council House tenants pay a cheap or low rent. This is simply not true. What they pay is a fair rent, which is something completely different. On average the rent they pay is approximately one third of their incomes, which in most European countries would be regarded as about right.

Having used the bedroom tax to harass and winkle Council tenants from their homes the government's latest wheeze is to force hard working families to pay to stay in their council homes.

As John Marais wrote in a letter to The Guardian:

Attempting to justify the raising of council rents to market levels for households earning over £30,000, or £40,000 in London, the government constantly repeats the incorrect and insulting refrain that council housing is “subsidising our lifestyles” (
Pay to stay trap will force working families out of council homes).

This is crude demonisation. In fact, a council home normally pays for the initial investment in its building cost after 20 to 30 years and from then on the rents provide a continuous revenue stream for many decades to come.

My council house was built in the 1950s on council-owned land. The one previous tenant and myself have jointly paid far more in rent than its building cost and only a fraction of my current rent is needed for its management and maintenance. So in what way is my home subsidised? Council rents are cheaper because no private landlords are making a profit from our housing provision and that is what the government resents, for ideological reasons.

George Osborne as is his way attempted to justify his lies with more lies:

“It’s not fair that hard-working people are subsidising the lifestyles of those on higher than average incomes.”

The only subsidising of lifestyles which is going on is those of private landlords. The fact is in many parts of England and especially in London, the overwhelming majority of private landlords are exploiting their tenants desperate need for housing by overcharging them. Not only that, we have a government which actively aids and abets private landlords by refusing to introduce a fair rent act which would stop such exploitation.  Preferring instead to use housing benefit to enrich these blood sucking landlords. Which is hardly surprising when you consider 72 Tory MPs are private landlords, It would be interesting to know how many journalists and columnists are private landlords, as it might explain why they often propagate these lies..

Only a fair rent act of the type many of our EU partners have, alongside a massive public house building programme will end this exploitation and waste of financial resources. By continuing to claim public housing tenants are paying a low or cheap rent, the mainstream media are helping to legitimize these extortionate rents and the behavior of our Rachman-like rentier class of landlords.

If ever there is an example of the market not knowing best Britain's housing crisis it is. The market in housing charges whatever it can get away with, and to hell with the hardship caused. According to Wikipedia, comprehensive rent regulation is common in many EU nations and beyond, Canada, Germany, Cyprus and Sweden, and also in some states in the USA, all have rent and housing regulations which involve:

Price controls, limits on the rent that landlord may charge, historically known as rent control.
Standards by which a landlord may terminate a tenancy (an equivalent of unfair dismissal from employment in tenancies)
Obligations on the landlord or tenant regarding adequate maintenance of the property.
A system of oversight and enforcement by an independent regulator and Ombudsman.

The classic objective is to limit the price that would result from the market, where an inequality of bargaining power between landlords and tenants produces continually escalating prices without any stable market equilibrium. None of this exists in the UK private housing sector.
In Germany  a person's tenancy may only be terminated for very good reasons. A system of rights for the rental property to be maintained by the landlord is designed to ensure quality of housing. (Unlike in the UK where Conservative MPs recently voted against proposed new rules requiring private sector landlords to ensure their properties are fit for human habitation.)

Rental price increases are required to follow a "rental mirror" (Mietspiegel), which is a database of local reference rents. This collects all rents for the past four years, and landlords may only increase prices on their property in line with rents in the same locality. Usury rents are prohibited altogether.

Many states in Germany, such as in Berlin go even further, having a constitutional right to adequate housing, and require buildings to make dwelling spaces of a certain size and ceiling height.

In the UK Rent regulation once covered the whole of the private sector rental market from 1915 to 1980. However with Thatcher's Housing Act 1980, it became the Tory Party's policy to deregulate and dismantle rent regulation. Hence the massive housing crises of today. Not content with this mess, the Cameron government are now turning their fire on council and housing association tenants who still have a degree of security which Osborne has been chipping away at since 2010.

There is hardly a single private UK landlord who is not guilty of usury. Once again we have a Rachman like rentier class of landlords whose tenants are at their mercy.