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Ed Miliband’s housing plan will make thousands homeless

Miliband is appeasing activists without thinking about the consequences. Credit: Getty

September 24, 2024 - 1:30pm

One of the reasons regulatory creep is so hard to avoid is that there are few things more superficially just and good than “higher standards” — and few things that play more into the cartoon stereotype of the heartless Tory than opposing them.

This is deeply unfortunate, because the actual merit of any push to raise standards can only be assessed in light of its practical consequences. Energy Secretary Ed Miliband, for example, has just announced a policy whose most likely consequence will be to make more people homeless.

Naturally, that isn’t what the headlines say. The actual policy is that landlords are going to be banned from renting out properties which don’t meet significantly higher energy efficiency standards. But the practical consequence, without serious interventions elsewhere, will be homelessness, not to mention pouring yet more fuel on Britain’s spiralling rent crisis.

Because of the country’s severe housing shortage, there are too few rooms on the market. Any regulation that risks taking rooms off the market will make that crisis even worse. Councils gold-plating regulation with higher minimum standards has already removed many rooms, specifically the smallest and cheapest, from the market. It lets councillors feel good about themselves, but doesn’t actually help renters.

Meanwhile, Michael Gove’s populist crackdown on no-fault evictions — i.e. evictions at the end of an agreed tenancy — are already driving landlords out of the market and, per the Guardian, making 2,000 people a month homeless.

But the paper doesn’t join those dots, of course. It simply pivots to activists demanding that Labour hurry up and introduce the legislation, leaving the careless reader with the impression that it is the solution rather than the problem.

Landlords are an easy target, and such myopia is not confined to the Guardian. Torsten Bell, touted as one of the new government’s great policy talents, apparently believes landlords selling up cannot impact rents unless they start demolishing their houses.

This position is moronic. The rented sector, especially the private rented sector, is the highest-density form of occupancy, for the obvious reason that a single property will provide a home to more people as a House of Multiple Occupancy (HMO) than as a family dwelling. Do the maths: a landlord who sells an HMO with four tenants to a private buyer, most likely a couple, is decanting two renters back into a market with four fewer beds in it.

Miliband’s proposals will only make these problems worse. At a time when higher interest rates are crushing profit margins, and following a decade of increasingly punitive regulation, forcing landlords to spend thousands — or tens of thousands — on renovations is only going to take even more homes off the market.

Where it does not, the costs will be passed on to tenants in the form of even higher rents — which people will have to pay, because housing is a necessity of life and the market is too constricted to give them alternatives.

If the Government wanted to deliver the benefits of this policy (higher-quality housing is, in fact, good) without the downsides, it could. Most obviously, it could either provide grants for renovations or at least supply tax incentives to landlords who invest in improving their properties.

But that seems very unlikely to happen. The whole point of squeezing landlords, politically speaking, is that they are an easy target. Labour MPs aren’t going to wave through a “subsidy for slumlords” while they’re being asked to cut the winter fuel allowance and retain the two-child benefit cap.

So this policy will play out as all such interventions do: with the politicians feeling good about themselves, millions paying higher rents, and a few thousand more people on the streets.


Henry Hill is Deputy Editor of ConservativeHome.

HCH_Hill

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David Morley
David Morley
11 days ago

Thanks for this. It’s always good to know that what is good for the rich is also good for the poor, and that what is bad for the rich is also bad for the poor. It makes one’s moral life so much simpler.

Jitwar Singh
Jitwar Singh
11 days ago

Caption should read: “Miliband being a member of the Labour government”
You can just see the vitriol in that face.

Thomas Wagner
Thomas Wagner
10 days ago
Reply to  Jitwar Singh

That image is comedy gold for his opponents. Put it on every campaign poster.

Jeremy Bray
Jeremy Bray
11 days ago

Labour is unable to understand the simple effects of altering the balance of supply and demand in any context. Make something scarce and the price rises. Increase effective demand and prices rise. All simple concepts but not something socialists want to accept.

David Morley
David Morley
11 days ago
Reply to  Jeremy Bray

He went on to graduate from the London School of Economics as a Master of Science in Economics.

Hardly likely that Milliband is as economically illiterate as you suppose.

Jim Veenbaas
Jim Veenbaas
11 days ago
Reply to  David Morley

Guess we chalk it up to someone captured by the net zero ideology.

Caradog Wiliams
Caradog Wiliams
11 days ago
Reply to  Jim Veenbaas

Exactly. I have come to the conclusion that richer people, especially the very rich, have arrived at that state by treading on people. When they have reached their peak – Milliband, almost certainly – they feel guilty, that they owe something to the people they have abused. So they choose a ‘good’ theme to follow; NetZero is ideal – how to save humanity by stopping the planet from exploding in 2050.
This is similar to the time when the rich bought indulgences from the clergy to reduce the time they would spend in Purgatory.

El Uro
El Uro
11 days ago

I’m not sure you’re right. Rather, a certain sense of irresponsibility for their actions instills in them a sense of their own infallibility and omnipotence.
If he knew he could get his ass kicked, he would be a lot more careful.

Peter B
Peter B
11 days ago

Interesting theory.
But my money’s on self-delusion rather than guilt. I might start feeling a tiny amount of sympathy for him if I thought it was genuine guilt.

Caradog Wiliams
Caradog Wiliams
11 days ago
Reply to  David Morley

To me an MSc in economics is like not having an MSc. Since when has economics been a science?

David Morley
David Morley
11 days ago

He would at least know about supply and demand – which is what was denied.

steve hay
steve hay
10 days ago
Reply to  David Morley

It would appear to quite a lot of prople, excluding Progressive cheer leaders that is, that despite his academic achievements he knows F all about supply and demand.

Peter B
Peter B
11 days ago
Reply to  David Morley

This policy says otherwise !
Graduation is certainly not always the same as competence. Lots of people have great qualifications on paper (theory), but prove rather disappointing in practice.

El Uro
El Uro
11 days ago
Reply to  David Morley

That is, if he wants to build thousands of windmills all over Britain instead of a few nuclear power plants, I have no right to call him an idiot, either from an economic or an ecological point of view.
Just don’t scare me with Chernobyl and Fukushima. If you take the damage to health and the environment per unit of electricity produced, then nuclear power plants leave far behind all known methods of generating electricity, except for hydroelectric power plants.

David Morley
David Morley
11 days ago
Reply to  El Uro

As it happens I’m pro nuclear – but don’t let that hold you back.

El Uro
El Uro
11 days ago
Reply to  David Morley

Take my “like” 🙂

Ian Wigg
Ian Wigg
11 days ago
Reply to  David Morley

Come of it, Economics was created to make astrology look reliable and accurate

David Morley
David Morley
11 days ago
Reply to  Ian Wigg

Read the thread.

Ian Wigg
Ian Wigg
10 days ago
Reply to  David Morley

I did

Nell Clover
Nell Clover
11 days ago
Reply to  David Morley

The LSE used to teach Soviet economics, an oxymoron. The LSE was, still is, a centre of communism in academia. Indeed, Ed’s dad, a man considered too left wing for Attlee’s Labour Party, taught there. Ed’s dad, many of its academics, and a good portion of its alumni are people more concerned with theory than mundane reality. Alumni naturally fall into the civil service, another organisation that finds comfort in theory rather than useful delivery.

Jeremy Bray
Jeremy Bray
11 days ago
Reply to  David Morley

The Marxist Labour Theory of Value is not a theory that takes supply and demand into account. There is a fine line between economic illiteracy and an ideological rejection of the effects of supply and demand dynamics in the real world. The policies adopted by socialist regimes often seem simply to disregard such dynamics to the detriment of the class they ostensibly wish to benefit. Whether this is through economic illiteracy or ideological blinkers ie “not something socialists want to accept” may be a matter of debate.

Seb Dakin
Seb Dakin
10 days ago
Reply to  David Morley

Even less excuse for his enthusiasm for economically illiterate policies.

Martin M
Martin M
10 days ago
Reply to  David Morley

I remember an episode of Yes, Prime Minister, in which Hacker commented that Sir Humphrey didn’t seem to know much about economics. Bernard responded by saying “He did read Classics, Prime Minister”. Hacker then asked about Sir Frank Gordon, the Head of the Treasury. Bernard’s reply was “He knows even less about economics. He’s an Economist”.

Ian Barton
Ian Barton
10 days ago
Reply to  David Morley

It makes you wonder if that MSC had any content relevant to the economic understanding you need to be able to predict the consequences of government policy. Many PPE degrees certainly don’t.

Santiago Excilio
Santiago Excilio
10 days ago
Reply to  David Morley

That depends on which economics he learnt. Most likely marxist economics – given that the LSE was full of that sort of nonsense in 1995 (and probably still is) his father who was a marxist sociologist was associated with the LSE for most of his professional live and went there himself. In any case, marxist economics is fundamentally illiterate and doesn’t work in the real world (as millions of dead will attest). Both his housing and energy policies are totally unsound as any search on sensible commentary and critiques will demonstrate – try “ed miliband economically illiterate” into google – you’ll get 34K plus results. Happy reading.

Angela Jones
Angela Jones
10 days ago
Reply to  David Morley

Do you really think that any of these non-vocational higher degrees have the faintest practical use in the real world?

Billy Bob
Billy Bob
11 days ago
Reply to  Jeremy Bray

If landlords are leaving the market, then surely by definition the houses are now being bought by owner occupiers to live in, therefore while there is one less rental there is also one less family now needing to rent, therefore the overall numbers remain unchanged.
Unless the place is simply being left empty, in which case it should incur punitive taxes to discourage the practice

Susan Grabston
Susan Grabston
11 days ago
Reply to  Billy Bob

Sadly not quite true. Rented accommodation has more people per dwelling than home ownership for 2 reasons HMOs and larger family sizes tend to rent. When we sold our pprtfolio of 6 properties before leaving the UK the net effect was 15 people without a home/room. We had effectively had 6 x 6 bed HMOs and sold to 6 families with just over 3 people in each property. Anecdote of one of course and a somewhat exaggerared example, but data bears this out.

Andrew Martin
Andrew Martin
10 days ago
Reply to  Billy Bob

My daughter and Partner is trying to buy a house in Oxford. The four houses she went to look at were all multi occupational homes and in a mess needing thousands of pounds to put right. They’re still looking for a family property to buy. Quite rare for their price range.

RA Znayder
RA Znayder
11 days ago
Reply to  Jeremy Bray

It’s not that simple. In most housing markets one will find that prices, and by extension rents, actually correlate with credit availability more than supply and demand. If you think about it a bit longer it makes some sense. Who buys a house without borrowing a huge amount of money? Almost no one. And people borrow what they can. That even goes for landlords. The big problem is that the housing market became a speculative Ponzi, especially with the low interest rates. I would go as far as to suggest that precisely this incentivizes keeping the scarcity and a reluctance to build new properties.
This also explains why so many Western countries have a housing crisis that completely went off the rails after 2020: the exceptional monetary policy of the pandemic.

Christopher Barclay
Christopher Barclay
11 days ago

It’s worth remembering that Ed and his brother paid no tax on a £1.3m inheritance 20years ago.
https://order-order.com/2015/02/12/flashback-when-the-milibands-avoided-tax/
It’s also worth remembering that Ed was so embarrassed by the luxury in which he lived that he pretended that a kitchenette in his slum home was his main kitchen.
https://www.bbc.co.uk/news/uk-politics-31875297
It’s highly entertaining to remember that, in an attempt to prove how un-Jewish he was, Ed almost choked to death on a bacon sandwich.
https://en.wikipedia.org/wiki/Ed_Miliband_bacon_sandwich_photograph
There is a special place in hell for champagne socialists.

Martin M
Martin M
10 days ago

Speaking of Champagne Socialist, I haven’t seen any posts by him recently.

Thomas Wagner
Thomas Wagner
10 days ago
Reply to  Martin M

Shush. Do you want him back?

Martin M
Martin M
9 days ago
Reply to  Thomas Wagner

I like him because whatever I say in my posts, he makes me look “reasonable” by comparison.

Jim Veenbaas
Jim Veenbaas
11 days ago

This is what you get when common sense is upended by an ideology rooted in luxury beliefs. This Labour govt looks like a trainwreck.

Thomas Wagner
Thomas Wagner
10 days ago
Reply to  Jim Veenbaas

And here I thought our Democrats were uniquely stupid. Apparently cause and effect is a concept foreign to the Left.

Ian Wigg
Ian Wigg
11 days ago

I’m intrigued as to how my landlord is going to get our Plantaganet timber framed, thatched cottage from its current E (only acheived by overstating the, admittedly extremely good, thermal insulation properties of the thatch otherwise it would probably be a G) up to a C.

I know listed buildings are exempt frpm EPC but lots of letting agents still insist on them.

John Tyler
John Tyler
11 days ago

Isn’t one of Newton’s laws about equal and opposite forces? Unsurprisingly it applies also to state intervention. Duh!

j watson
j watson
10 days ago

The contention the Policies won’t have the desired effect – improving the standard of accommodation for many whilst providing further tenure security – assumes Landlords are running such fine margins they’ll sell instead. It’s the equivalent of the rich squealing about tax rises they can more than absorb – self serving & predictable.
Britain is a more unequal society than it’s been almost since WW2. If you have assets, esp multiple housing assets, you are likely doing v well. Covid furlough scheme transferred even more wealth to those with assets. Well let’s be seeing some of that now go back into helping the less well off and less fortunate.
An exodus of private landlords won’t happen, and even if some do it’ll push down the price of houses and release capital for other investment – hopefully more productive investment.
Going to be alot of squealing on pages of Unherd. As a Right wing publication owned by a Hedge Fund Billionaire it’s not exactly a surprise.

Ian Barton
Ian Barton
10 days ago
Reply to  j watson

I would expect increases in costs to drive even more of the remaining landlords to convert houses – that are currently rented to small families – to HMO dwellings in order to increase rental revenue. This government will provide many new tenants and the related state funding to fill these converted houses. The small families are really going to suffer.

Thomas Wagner
Thomas Wagner
10 days ago
Reply to  j watson

There are none so blind as those who will not see.

Graeme Laws
Graeme Laws
9 days ago
Reply to  j watson

How exactly did furlough benefit those with assets? My understanding was that it covered some of the income of many people who would otherwise have been unemployed. It meant that businesses that might have gone under lived to fight another day.
It is also not clear to me how falling house prices would release capital for more productive investment.
What we need, have needed for many years, is investment in social housing.

Janet MAYNE
Janet MAYNE
9 days ago

You say an HMO would be sold to a couple. Couldn’t an HMO be sold as (many) studio flats thus maintaining the number of occupants? Just asking.

Peter Drummond
Peter Drummond
9 days ago

Nail hit, firmly, on head.