Private landlords risk gaining the same reputation as bankers in Britain’s housing crisis, warns Danny Dorling.
Private landlords risk gaining the same reputation as bankers in Britain’s housing crisis, warns Danny Dorling. In his new book he says that the UK housing market is fuelling a 'prince and pauper' future.
We are currently suffering a housing crisis that is slowly but steadily turning into a disaster. Many try to bury their heads in the sand and pretend it isn’t happening. Often those people are the ones who have done very well out of the housing market in recent years.
Housing circumstances are, on average, worsening for the large majority of people in Britain – the majority which is getting larger and larger every day – for the roofless, the homeless, for almost everyone who rents and especially those who rent privately and for the majority of people who have a mortgage. What little wealth most have is shrinking and their costs are escalating.
Housing does not cost what we are paying for it. Our landlords do not spend most of our rents maintaining the properties we live in. The price of property does not reflect the cost of re-building, especially in the south of England. Rents are often higher than mortgages. Mortgages are enormous because housing prices are so high and we are fooled into believing that they are not high, because we are told interest rates are low.
The money we borrow still has to be paid back and a huge amount of money borrowed at low rates of interest results in just as much profit being made by the bank as smaller debt at higher interest rates did in the past. And when interest rates rise… what will happen then?
Our housing market is in danger of fuelling a prince and pauper future. The richest tenth of children by household in Britain are growing up in families with well over one hundred times as much housing wealth as the poorest tenth.
One in four of all households with children in England now rely on private renting for their housing. That proportion has accelerated recently with the greatest increase being a couple of years ago. Private renting is not an ideal tenure for children because it does not ensure that they can stay in the same schools that they start learning in or get to keep their friends for very long if their family is moved on.
What has happened since 2008 was largely unanticipated. Of course landlords did not meet together as a group and plan to become so much richer so quickly with such devastating effects on young families looking for some stability and trying to get on the housing market. However, they currently run the risk of gaining the reputation of bankers.
A lot needs to change in housing in Britain soon, because where we are is not where we planned to be.
Read more about the UK housing market.