Marketing Madness & Its Allusion To Fairness

Squall 4, April/May 1993, pg. 17.

Sir George Young, Minister for Housing, has been the object of criticism ever since announcing plans to encourage the return of financial institutions into the private rented housing market, a market they abandoned in the 1950’s.

Treating the housing in much the same way as one would any commodity, Sir George says there is a “yields gap” which the government is currently deciding how to “bridge”. In other words there is not enough profit to be made and Sir George may have to concede tax incentives, loans or grants in order to attract the city’s greedy giants into what is seen as a high risk area.

The intention is to mop up much of the repossessed property, one of the biggest drags on the housing market, and also to reduce reliance on council-funded bed and breakfast accommodation for the homeless. Large financial institutions will be ‘encouraged’ to purchase property and then make them available at fair market rents.

What Sir George seems to consistently miss is the fact that the major problem confronting homeless people trying to enter the private rented sector is the cost of such housing. The ‘market’ rent is an illusion of fairness and although the value of private houses has fallen over the past few years, this has not been reflected in the the rented sector.

Assuming that a “bridge” is found and the private sector is flooded with enough adequate, rentable accommodation to supply need. Will the large corporate landlords be willing to accept tenants on the strength of a promise from the local authority? After all, where is someone on income support going to find a month’s rent as deposit and a month’s rent in advance? Payments to new tenants in order to cover deposits were stopped in the early eighties. The government can state that claims to local authorities for housing benefit should be settled within 14 days but, in reality, most councils are running at nearer the 100 day mark, with some taking much longer than this. Will corporate landlords be willing to wait for their rent?

A survey carried out by Shelter in Bristol at the beginning of the year targeted landlords of 100 randomly selected empty properties. The landlords were asked to put the management of their property into the hands of local housing associations who would then let them out to homeless people. Of the 100 properties in the survey, Shelter could only secure two for the housing association involved.

At the end of the day, the government’s proposed policies must be seen for what they are; boosts to housing market in recession, capital injections to promote turnover and growth and kick start this failing economy. What this has to do with securing homes for homeless people is a matter for guess-work. Curing the blight of increasing homelessness is, apparently, not the priority, simply an attractive side-effect. Only one thing is sure; the market is not a fair place.