Parasitic landlords are pretending they are suffering as mortgage rates reach 15-year highs. In reality there is no “crisis” for landlords. The people really suffering are renters, squeezed for every penny they have.
Ordinary people face a crisis of not being able to afford rent, bills and food. Landlords moan they are in a “cost of doing business” crisis.
They claim Tory policies favour super-rich landlords rather than smaller land barons. The loudest whines come from the buy-to-let sector. These are people who used renters to pay their mortgages.
The get rich scheme is simple. Borrow money, or use your spare cash, to buy houses. Then rent them out and let the tenant pay the mortgage plus more on top. After a while you mortgage is paid off, and the income keeps flowing.
Now interest rate rises have pushed up mortgage costs. To maintain their profits, landlords are pushing up rents.
Rents rose by an annual rate of 5.1 percent in the three months to June and 5.3 percent to July—the largest jump since official records began in 2016.
One Office for National Statistics survey in July said 43 percent of tenants reported difficulty affording rent. And 14 percent said they could not afford to buy food in the two weeks preceding the survey.
Meanwhile half of private renters in England are “one paycheck away” from losing their homes, according to housing charity Shelter. The number of homes available for rent in Britain has dropped to a 14-year low
Housing website Zoopla says the number of available properties listed on its site is a third lower than before Covid.
In April, Foxtons, property managers based in London and the south east, had 97,000 prospective tenants and just 2,000 properties to let. The real victims are renters. The obsession with housing for profit is at the heart of the housing crisis.
Campaigns Defend Council Housing and Homes for All have launched a five-point programme for change in the housing sector.
They call for: Government investment in a mass council housing building programme, including requisitioning of empty homes and abolition of “right to buy”
For further details, campaign materials and to sign a petition backing these demands, go to bit.ly/Housing0823
Buy-to-let was pushed as the new way to make money. Recession in the 1990s saw house prices plummet. And rising unemployment meant people who had borrowed to buy their houses now couldn’t pay back and lost their properties.
This crisis was a direct result of Margaret Thatcher’s aggressive right-to-buy scheme that saw the mass sell-off of council housing.
It’s why today people are turned away by councils to the mercy of the private rented sector. And why councils are forced to rent off landlords to provide social housing. Discounts started at 33 percent of the home’s market value and rose to a maximum of 50 percent for tenants of 20 years standing or longer.
Between 1980 and 1997 over 1.7 million homes were sold. Private landlords cheered—they could now buy ex-council houses on the cheap and rent them at extortionate costs.
In 1991 rents skyrocketed by 55 percent. The discounts for council tenants who could afford to buy their homes were passed on to poorer ones. More rented homes were needed to plug the gap, so buy-to-let mortgages debuted in September 1996.
They gave landlords cheaper rates and tax breaks to increase their number of houses. These mortgages increased from 48,400 in 2000 to 346,000 in 2007.
There are still plenty on the market. A current advert of Halifax bank, for example, offers such mortgages and says, “Finding that first property to rent out or expanding your rental property portfolio could be a worthwhile investment.
“It’s wise to make sure the rent also covers insurance charges and general repair and upkeep of the property now and in the future.”
Landlords in Scotland have effectively gone on strike in an effort to smash the very limited rent controls introduced by the SNP-led government.
They are withdrawing properties, deepening the housing crisis and pressuring the government to allow rents to soar. Only then will they start renting fully again. Listings of rental properties are down about a fifth compared to before rent controls.
Existing rent controls are supposed to cap rent rises to 3 percent, following a temporary freeze to help tenants through the cost of living crisis.
But the limits apply to existing tenants, not the accommodation. If landlords can remove the tenant or reset the contract, they can push rents through the roof.
Aditi Jehangir, secretary of the tenants’ union Living Rent, said, “Since the introduction of right to buy in the 1980s, social housing stock has been decimated, going from 51 percent of Scotland’s housing to 23 percent.
“If landlords are spooked by the idea of rents being affordable for tenants, this government needs to commit to building far more social housing to house the 243,000 people on social housing waiting lists.”
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