I feel uneasy about the rise of the modern ‘rentier class’, and it’s not simply because I will, barring a miracle, never be among them. A few people that I know now either own a second property (not many below 50 granted) which they intend to let or are letting. Many young people I know talk of saving to buy a property, with the intention of letting it out for permanent future income. Is this a bad thing?

A previous generation had access to plentiful council housing, with affordable rents. As has been pointed out elsewhere, outgoings for housing used to make up an average of 20% of a person’s income, leaving plenty (deducting bills) of disposable income to disperse in the economy. So not only do lack of rent controls (something implemented throughout most of Europe) leave the wider economy worse off, but price young people from ever moving out of their parents’ home. There are those who will argue that current housing costs, moving up to an average of over 50% of outgoings, along with the end of cheap energy, is just something we just have to accept. But we miss the point that Government, which once stepped in to correct market faults for the greater good, now only exacerbates the problem in the name of a failed ideology.

Mixed economies work so well because the State understands when not to get involved in market forces, when to legislate, and when to intervene to alleviate problems to the wider populace. Britain used to do it. It could still do it now with the political will.

The examples I use are readily visible now. If we accept that energy bills are out of control, and that many people are forced to choose between heating and eating, and that the ‘Big 5’ energy companies are effectively a cartel which colludes to keep prices high, then why not re-nationalise energy? If that is too much to stomach, then instead re-introduce rent controls, commonplace throughout Europe, to free up more money to keep people healthy and warm with adequate energy. There are more options still, if we accept that the State’s first job is to ensure the safety and general health of its people.

The other tragedy with the death of council housing is that it has removed security for low-income families. A ‘house for life’ is no longer certain. This would be acceptable, if ‘jobs for life’ still existed. But they don’t. So it’s a double whammy. Some jobs are not jobs for a month any more! If all housing benefit claimants lived in council properties, the ‘benefits’ bill would be dramatically cut, as there would be no more ‘name your price’ private landlord profiteers feeding at the public trough, but again, this is not an option readily available without Government intervention. What made the postwar consensus so powerful was that it recognised the true value of a mixed economy. It legislated where appropriate, and stepped in where needed. It allowed the vulnerable to be protected, and the ambitious to be socially mobile, whatever their background. This is not a pipedream. With enough public support, the State can once again be a force for good, ironically for the markets as well as its citizens.

The other, perhaps more fanciful reason that the ‘rentier class’ makes me uncomfortable is the resonances with feudalism. Extreme perhaps, but the idea that someone, with no direct connection to the construction, can own property they don’t live in, and basically name their price for those that wish to live in the property, with little notice if they wish to evict them, sits uneasily with me. Yes, there is a lot of work involved in saving and paying off the cost of a property, but a property is a necessity. Everyone needs shelter. It is a basic human need, and for some to hold the power of depriving people of shelter through simply being wealthier is not what I consider progress. Of course buy-to-let landlords should form a part of civilised society, but not a dominant part emphasising a society ever more stratified.

  1. jensenred says:

    2nd home tax, used to directly fund the building of new , affordable homes for 1st time buyers with Govt. underwritten mortgages. would affect the rental market and bring down rents making renting more affordable .

  2. An interesting idea, but i still don’t believe an essential tool for living should be left entirely to the market. I would still advocate rent controls, though your idea would certainly be good for improving the housing stock.

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