Declining Home Ownership Must Mean Action On Renting

The Tories support the idea of a ‘property-owning democracy’ and have enacted policies like Right to Buy and Help to Buy to make this ideological principle into a reality. However the Tories are failing to do this, and criticism of the Tories in accordance with their own logic is important if they are going to be defeated in an election. According to the OECD, Britain is 32nd out of 37 countries when it comes to home-ownership among families the report characterises as ‘just managing’. The housing crisis is at intolerable levels for millions of people across Britain, and the Left needs to put forward a convincing case to deal with the immediate problem.

The extent of the problem is apparent to anyone armed with the facts. Figures published in (the printed version of) The i from the Valuation Office Agency, Nationwide, CIPFA, and the Office of National Statistics show that house prices and monthly rental costs have spiraled. According to these statistics, the average monthly rent is around £650 per calendar month, but this figure is much higher in London. Around forty years ago in 1976, the average monthly rent was £20.16. Further, the same statistics show that average house prices have gone from £11,000 in 1976 to nearly £220,000.
When people talk about the current problems facing younger people in relation to housing, the response from those in power is that the government will encourage people to build more houses. Even if we take the Tories at their word, this is unacceptable because it doesn’t address the existing crisis. Housing of any kind takes time to build but people are struggling now. This is why it is necessary for the government to act on the private rented sector. Introducing rent caps and long-term tenancies for inner-city properties will ease this burden relatively quickly and give the housing sector time to build the houses required to meet future demand.
Low to middle income families are struggling to get on the housing ladder (Photo: Getty)
Affordable housing is becoming out of reach for young people and families with little disposable income. (Getty)
After introducing rent caps, the local economy of the areas impacted by the policy will greatly benefit as people will have more disposable income. If I lived in a one-bedroom flat in London and I was paying £1,200 per calendar month, which incidentally is an eye-watering amount of money, not only would I have to have a very well-paying job but I would spent a significant proportion of my income on rent. If however London rents were capped at £800 per calendar month, which is still significantly higher than the national average, I would have an extra £400 every month. I’m not a mathematician but, if my sums are correct, that adds up to nearly £5,000 saved every year.
This money could be spent in many different ways, and all of them are positive. If I spent this money on a monthly spending spree I would be putting that money into the local economy, although the monthly accumulation of shite would eventually catch up with me. Conversely I could spend that money on a holiday that would reduce my stress levels, and thus make me more productive when I went back to work. But even more mundane expenditure would be beneficial. If I used the money to clear off some old debts, this would put me in a better financial position in the event of an economic downturn. Rent caps have the ability to act as a stimulus to the local economy whilst also helping reduce the cost of living.
To conclude, rent caps necessarily must be the focus of any immediate housing policy. The construction of new housing units is also important in the medium term, but the government can act in the very near future to alleviate some of the strain on the private rented sector. The argument I laid out above is important because it is, in essence, an economic argument which will appeal to some people in the capitalist class at the expense of others. Businesses in Manchester, Leeds, London etc. can be convinced to support this policy if messaged in the correct way.
The task of the Left is to put this case to these businesses because in a capitalist society they have a lot of influence. If 300 people in Leeds ask the government to introduce rent caps they won’t listen, but if 300 business owners, some of which being CEOs of big businesses, called on the government to act, they will take notice. I’m not saying that if businesses speak out Philip Hammond will put rent caps in his upcoming budget, but the policy gets harder to dismiss when people like myself and big business are in the same mind. The Left must make the case for rent caps to everyone who will listen, even if it involves making essentially a pro-capitalist argument to big business. Businesses have a large amount of power in our society and therefore getting them onside would be a propaganda coup for this issue.

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