Why we should worry about becoming a ‘nation of renters’

There is this preconceived idea in this country that owning a home is something you should be proud of and renting one is something you should be ashamed of. It doesn’t necessarily follow, and I find the latter premise particularly hateful. It is akin to the classic remark, attributed to Thatcher, that “a man who beyond the age of 26 finds himself on a bus can count himself as a failure”. Balderdash.

I completely agree therefore that we must act to regulate the private rental market appropriately. We wouldn’t treat animals the way some tennants are treated. Guilty landlords should be severely punished, where it hurts, with severe fines, what their property is worth for example?

My previous landlord never fixed anything. From the day we moved in we had problems, but we thought we’d be ok as we got it written into our contract that we needed certain things fixed.

Over time more and more things went wrong (including multiple gas leaks as the gas meter had been installed in such a dodgy way – National Grid fixed it for us and billed the landlord – he wasn’t impressed), but the last straw was when we had that awful cold snap. It rained, and wind howled, and we discovered that the reason our bedroom was always cold wasn’t the single glazing. It was that underneath the bedroom window was a hole, a hole that ran the width of the window, was an inch high, and led straight outside. We hadn’t noticed it previously as it had been covered by a piece of wood, glued on and painted to match the windowsill. Of course the wind, rain and snow had destroyed the glue, so the board had fallen off.

We then knew why it was so cold, and also why a mysterious damp patch had appeared in our living room, directly below the bedroom window.

We were less than impressed when we discovered that the landlord had no intention of fixing the hole as he planned on selling the flat at the end of our contract, and so didn’t want to spend a penny on the place until then.

Understandably we called Environmental Health, little did we know that this would worsen things for us. After all, surely it should improve things? But no, the landlord took exception, and turned up at our flat (without giving us the contracted 24 hours notice) to have a go at us, and threaten us for daring to get Environmental Health involved.

Two days later he returned again, and attempted to let himself in (luckily we’d installed a chain after an earlier break in attempt) and shouted and screamed abuse at us. From that point we were too scared to stay at the property we were paying for and had to find floors to sleep on.

We then tried to leave the tenancy early, using the logic that he had broken his contract multiple times, and that we didn’t want to find out what he was capable of. But couldn’t.

We ended up paying him for 3 months that we were not there, while also incurring the additional costs of not living in our own home. On top of that, we have still not got our deposit back. This vile man has taken two and half grand of our money. And we have no rights.

This is why being a nation of renters is so flawed, people like him can continue to destroy people’s lives. What’s worse, is that the reason we were with him is that myself and my husband are disabled, and rely on housing benefit to keep a roof over our heads. And this piece of work was the only person locally willing to take on HB tenants.

The rental market needs a huge overhaul. It’s disgusting the way things operate now.

The big problem for everyone – house buyers or renters – is there’s just not enough housing about. With a greater demand than supply, unrealistic house prices are supported and rents go up. House prices are high because land prices are high, and land prices are high because building land is rationed through the planning system. And now we have the localism bill, a charter for NIMBY’s which will make things even worse.

The only way is to free up land for buildings, but with planning committees run by middle-class, house owning councilors who will protect their view and house values, we are unlikely to see any change. The only way round it is to insist that the majority of people on planning committees are renters. Radical, but it may be effective.

I agree that what we really need is for a drop in house prices to affordable levels. I’m convinced that the problem all along was that people were encouraged, and succumbed to the temptation, to borrow far more than they could afford to repay, based on the impossible premise that house prices can increase faster than people’s incomes in perpetuity. This has lead to absurdly high house prices, and people being weighed down by their debt. The problem has been temporarily covered up by the Bank of England base rate being kept ridiculously low (which is essentially giving free money from taxpayers to banks). But it can’t last forever, because it’s just causing price inflation, which, contrary to many people’s beliefs, does not help those with large debts. *Wage* increases help to cut the burden of debt; price inflation makes it even worse, as there is even less money left to pay the debt after buying the essentials. Mervyn King has made it clear that he’s happy for prices to go up by 5% per year i.e. for people’s incomes, savings and pension pots to be cut in half over the next 14 years, but that he will immediately act on any sign that incomes are increasing.

The only solution is going to involve those who got into too much debt admitting their mistake, and either paying off their debt at a realistic pace, which will involve family austerity or even defaulting on it through bankruptcy (causing the lenders to take the loss). What isn’t going to work is the current approach (throughout the world) of “extend and pretend” – keep interest rates low so that people can keep up their minimum repayments until a new group of people can somehow be persuaded to overpay even more for houses; and all funded by taking through inflation the wealth of the people who did the right thing and refused to take on excessive debt.

Once we start living within our means i.e. spending no more than we get in income over a lifetime, or to put it another way consuming no more than we produce, then we can have a sustainable economy. I firmly believe that we can have a high rate of home ownership, but prices must come down, and we must have an economy based on producing useful stuff, rather than on treating shelter as a speculative asset in a game of continually finding someone whom we can convince to overpay for it by more than we did.

I’m sure this point of view will not endear me to you if you have a large mortgage burden and are worried about the effects of higher interest rates. All I can say is that I honestly do not have any ill will towards you, and I feel very sorry for you. I worry about the effects on friends of mine. But ultimately we are responsible for our own actions, and we have no right to insist that someone else be forced to pay for a bad decision of our own making. And I am convinced that the approach of keeping interest rates low to keep house prices from correcting is not going to help that many people who overpaid for their houses to eventually clear the mortgage anyway – it is just dragging out the process.

Even if it did create a sub-prime rental market, it would mean that renters could find a property and be able to check that their landlord was registered. It would give them more of a chance.

Landlords can do references on their tenants (financial and speaking to previous landlords) but tenants can’t in most situations. This would go someway towards making the system fairer.