7. Plaid Cymru Debate: The private rental sector

Part of the debate – in the Senedd at 5:43 pm on 12 October 2022.

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Photo of Carolyn Thomas Carolyn Thomas Labour 5:43, 12 October 2022

In many European countries, the majority of people rent their houses, but in the UK, properties are classed as an investment. The idea that a home is a human right and that everybody is entitled to a roof over their head is subordinated to the whims of market forces, privatisation and the pursuit of profit.

When Margaret Thatcher came to power, the Government withdrew funding for councils to build housing. The disastrous right-to-buy policy further entrenched neoliberal dogma into UK housing policy and saw a 45 per cent reduction in social housing available between 1981 and 2014. Most homes sold under this policy were never replaced. It represented a mass sell-off of state assets into the private sector, which as a result cost local people more to rent and, in some cases, the public purse more in housing benefit. It wasn't until 2016 that local authorities could keep the rent from properties and reinvest in bringing them up to the Welsh housing quality standard and new council house building. Unfortunately, by this time, Tory cuts under austerity were biting.

The Welsh Government spends over 90 per cent of its budget on public sector funding and does not have the fiscal levers to borrow. The UK Government does and should provide funding to build housing. Under Clement Attlee's Labour Government, the state directly provided funding to councils to be invested in increasing social housing. The results were that hundreds of thousands of social rented homes were built. From an economic point of view, the justification was obvious: with the state building large numbers of homes, house prices and rents remained affordable because of high supply.

The current Tory policy of cutting public service funding as well as limiting social house building has created a loss of local planning, drainage, highway and transport experts, and will create mass unemployment in Wales, and poverty, as one third of people are employed in the public sector here in Wales. I am told that people in the public sector are now presenting as needing a roof over their heads, as wages have not risen with the Tory cost-of-living crisis. And the Prime Minister needs to be educated that you cannot grow the private sector while cutting the public sector under austerity too. The private sector cannot step in, as there is a huge workforce and skills shortage there too following the pandemic and leaving the EU.

Social landlords are already subject to a rents freeze until the end of March next year; caps are reviewed annually and are set by Welsh Government. The private sector needs also to have rent controls, the right to secure tenancies with the right to keep a pet included in the tenancy, and ban the use of no-fault evictions. And we need to ensure that banks and building societies take historic rent payments into account when assessing mortgage applications. Many people are paying rent prices that are higher than mortgage applications.

The local housing allowance was frozen in 2016, and again in 2020. Some landlords are flipping to Airbnbs as, according to a Bevan report, in some areas, they can earn in 10 weeks what they would on a full-time rental through the local housing allowance, which is just not enough. The situation is fast-moving and critical. From talking recently to council leaders and housing associations, and a new report from Crisis, the time for a private rent freeze is not now; the situation is too volatile, complex and risky under the UK Government's political-economic crisis, which has seen the fastest mortgage increase on record, and a forecast that house prices will fall and a recession, there's just nothing to fill the gap at the moment. Landlords are realising that their property investment will no longer be sound and that they can make more by putting their money into the bank. People are worried about mortgages once fixed-terms comes to an end, and the situation is frightening. 

I have just read the Scottish Government's rent freeze—