Rogue landlords are a poor solution to the housing crisis

“The two-storey Victorian terrace house is licensed by the London borough of Newham for renting to a single family of up to six people. There are currently five men, all strangers to each other, living here. There were eight or nine, but some have moved out already. The property has three bedrooms, plus the living room which was being used as a bedroom. The Newham housing officers point out the mould and damp, the wires hanging from the hall ceiling where a fire alarm should be. There are no beds, just mattresses on the floor.”

Except, this isn’t as bad as things get:

“This, I am told by one constable, ‘is pretty good’ – a consensus view among the officers in attendance.”

How can a city like London have so much sub-standard property? With sky-high land prices, isn’t there an incentive to redevelop housing that, currently, only those with no other options are willing to move into? Isn’t it in the interest of landlords to go after richer tenants and buyers?

The answer, quite possibly, is no – not when there are ways of getting rich from the poorest tenants. In a report for the Guardian, Tom Wall exposes an especially ruthless approach – the so-called ‘lockdown model’:

“Highly organised gangs of rogue landlords are making millions every year out of the housing benefit system by enticing desperate local authorities to place single homeless people in micro-flats in shoddily converted and dangerous former family homes.

“Three-bed houses, where the maximum weekly housing benefit for flat-sharers is under £100 a person, are being converted into as many as six tiny self-contained studios – as little as 10 sq m in size. Each then qualifies for housing benefit of £181 a week, enabling a landlord to squeeze £56,000 a year in rent from a property on London’s fringes, all paid from public funds. The £56,000 compares with the typical £6,200 annual rent on a three-bed council house.”

Why do the authorities tolerate this? Desperation, mostly:

“Councils are reluctant to take a hard line because they fear it could make people homeless…”

And yet, even in pressured cities like London, the state has everything it needs to greatly increase the supply of affordable housing. Firstly, it has the land – owning great swathes of the city, currently occupied by low density housing estates, lock-up garages or other sub-optimal uses; secondly, it has the power to grant planning permission to itself to redevelop this land at much greater density (and quality); and, thirdly, it can easily borrow and repay the upfront cost of doing so, by selling a proportion of the new homes built for a tidy profit.

Of course, this would require a strategic grasp and entrepreneurial spirit that seem to be entirely missing from the politics of our age; but with proper leadership such qualities can be acquired.

The alternative is to cede the initiative to rogue landlords, who don’t just ruin their own properties in the process, but entire neighbourhoods:

“Housing inspectors found the micro-flats were often in very poor condition with inadequate fire safety provision and dangerously overloaded electrics and plumbing systems.

“Neighbours complained of anti-social behaviour and feeling unsafe when there were influxes of often single men, with substance abuse and mental health problems.”

The mental health of these individuals won’t be helped by confining them in such tiny spaces. For the sake of a short-term ‘solution’ to housing shortages, we’re paying rogue landlords to create long-term problems.

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Peter Franklin is Associate Editor of UnHerd. He was previously a policy advisor and speechwriter on environmental and social issues.

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