This week the Tory’s introduced a policy that turned the practice of squatting into a criminal offense. Now while they’ve attempted to portray it as a means of evicting hippies from well-to-do London Mansions (there’s a certain class of professional protesters who live at no fixed abode and basically go from squat to squat in London, often in posh neighbourhoods, much to the annoyance of many toff’s paying millions to live on the same street). But it has implications for many ordinary people as well.
There is a housing crisis in the UK, yet 450,000 properties are estimated to be vacant at any time. While some are vacant for good reasons (renovations) in many cases they are vacant for economic reasons, i.e. the greedy landlord or letting agent would rather keep a house empty than lower the rent. There are two properties on my route to work that have been vacant for at least a year, and I know this for a fact as I viewed them when I moved to the area, and concluded that the rent being charged meant I wasn’t interested (I told the letting agent as much), but sure enough they are still on the market at the same advertised rent I rejected.
During the boom years a new type of landlord emerged in the UK, a type I refer to as the casino landlord, as they regard homes and flats as little more than gambling chips in a casino. Many would buy up homes by the hundreds (often online or over the phone without ever having viewed many of them), using the collateral of the stocks of houses they already owned to purchase more homes, while first time buyers (with no collateral) struggled to compete against them and get this first rung on the property ladder. Typically the 1st time buyer, or professionals like me who move around the country regularly (and thus don’t want to commit to buying just yet), were often forced to go to these casino landlords to find a place to live. So in essence first time buyers end up paying their mortgage for these landlords.
This policy of casino landlords is not only grossly unfair, as it makes it very difficult for people to buy a home and concentrates a large portion of the country’s capital in the hands of a few, but also because it distorts the property market, and ultimately the financial markets. It was loans to these casino landlords that largely drove the excesses of boom and played a major role in the credit crunch of 2007. While quite a number of the casino landlords got wiped out in the crash, a price we as a society are ultimately footing the bill for to this day with the bank bailout. But unfortunately with low house prices and 1st time buyers finding it even harder to get on the ladder, they are off again. How long before there’s another crash and we are again forced to provide another bailout?
This new anti-squatting law means that many tenants who are in dispute with their landlord in some way (for example because he’s stopped maintaining the flat and the tenants are withhold rent to try and force the issue, or the tenant has lost his job and waiting for the housing benefit paperwork to go thro) risk being labelled criminals. Inevitably this will greatly increase levels of homelessness in the UK, at a time (as noted) we have hundred’s of thousands of vacant property.
This would all be bad enough if it weren’t for the fact that the UK already has an almost Dickensian system of regulation of letting that is distinctly tilted in the landlords favour. In the UK you’re landlord is pretty much your lord and master and you’re the unwashed oink paying homage to him.
Consider that in most other parts to Europe, or indeed in many parts of the US, you have much greater control over what you do with a property you are renting. You can make home improvements or redecorate (in theory the landlord could request you put it back to the way it was before, but as people in Europe rent for much longer, chances are he probably won’t remember what it was like before!) while in the UK you need the landlords permission to so much as put a nail in the wall. You can choose to change energy supplier (in the UK you need the landlord’s permission).
You can also own pets (in some places they do have restrictions on pets or can require you clean the place appropriately to remove any doggie smell or hairs) while in the UK you can’t even own a goldfish (a work colleague of mine got told to get rid of her goldfish by a UK letting agent). This last one might explain to me the rat epidemic in the UK right now. When I was growing up we always had a cat or dog and therefore hardly ever saw mice (save when the cat brought you a live one!). The other morning I saw a large rodent (not sure if it was a rat, but it was way too big to be a mouse) in broad daylight in my back garden…fortunately the neighbour’s cat was around soon after that to investigate.
Many parts of Europe and the States have rent control, which limits what rent the landlord can charge and how much it can be increased by in any given period (steep fines can be leeved on a landlord who breaches these rules), while rack rents are a common feature of renting in the UK. Also while the UK landlord can fob off his council tax onto tenants, generally in other parts of the world paying things like property tax is seen as the landlord’s responsibility (although inevitably he will pass such costs onto the tenants).
While landlords in the UK are forbidden from discriminating on ethic grounds (of course some still do, just ask anyone from a minority whose tried to rent in certain areas), UK landlords can certainly discriminate on the basis of income and class. Many UK landlords will slap things like no DSS on their rental notices , which essentially implies no chav’s or working class scum….Of course if you’re like me, a professional moving between cities and you have no job in the meantime (i.e. the whole point of moving is to start a new job!) this can make getting a place to rent problematic, nevermind if you’re a professional fresh of the plane from India.
And while European landlords need a valid reason to evict you, UK landlords can pretty much tell you to feck off anytime they feel like it. And getting you’re deposit back off a UK landlord, particularly if you’re a foreigner, is next to impossible, even if you’ve left it as you found it (in Germany for example it goes into an interest paying deposit account with the tenant reaping the interest payment and a third party deciding on whether it can be withheld).
As we all know the social housing system in the UK was gutted by successive UK governments, notably the Thatcher. Social housing in the UK has nothing like the capacity needed, they are badly maintained and often run down, often in the middle of nowhere…..Which is just as well as successive governments seem to have gone out of their way to ensure that some estates (or perhaps I should say ghettos) are populated but lots of not entirely nice people, as seen in the UK TV show The scheme. Indeed UK social housing estates have frequently been used as little more than a dumping ground for people that the government would rather get rid of (out of sight out of mind).
By contrast in other European countries social housing is not only more readily available, but the stigma (and fear!) attached to it doesn’t exist (one famous block from the Weimar Republic days in Germany is now a world Heritage site, can you see any UK council houses achieving that status?).
When is a squatter a squatter
So this anti-squatting law merely shifts an already hugely unfair system all the more over to the landlord. Of course there’s squatters and then there’s squatters.
Many of the landed gentry in the UK don’t seem too realise that their right of ownership to their vast estates amounts to squatting. They’re forbears were given these estates by the monarch centuries earlier (in other words they never purchased the land, merely broke in and occupied it), but it was often taken by the monarch off of another noble, or indeed the ordinary peasants who had farmed it throughout history.
Doesn’t this law now make many toff’s, Cameron included, criminals? It seems to me that there’s one property law for the rich and another for everyone else.
Home are for living, not gambling
The UK desperately needs to clean up its letting market. As Vince Cable himself once said, homes should be for living in not gambling chips in a casino. If you want to play the money markets, get in touch with a broker and buy some shares, not people’s homes.
The Lib dems talk of a mansion tax. I don’t think that would work and I suspect it misses the point. I would instead advocate a property tax. This would give a 100% discount to every household for their first property, up to a specific value (say £1 million countrywide and £2 million in London). This provision is important as it heads off at the pass any attempt by the Telegraph or Daily Mail to claim that people will be taxed out of their home. However, once you own a 2nd home you have to pay property tax at a rate of say 0.25% of the value of your total property portfolio (that is the total value of all the property’s owned). If you buy a third, it goes up to say 0.5% (again against your total portfolio), and so on.
Alternatively if all that sounds too complicated (or unfair), just a simple flat 1% charge against the value of all property portfolios held by a household that exceed £1 million in value or any more than 3 properties. I can see some leeway for 3 properties by the way as some people will inevitably be between houses at times while in possession of, say a holiday home or maybe their recently deceased grandma’s house (the purpose of this tax is to get the rich to pay a bit more and run the casino landlords out of town, not tax ordinary householders).
As this tax (in whatever form it is implemented) is based on the landlord’s finances it would be illegal for him to pass it on to the tenants. Further to that this tax would be applied to all UK residents (we’ll say anyone who is in the UK for more than 60 days per year or who owns a UK passport) and applies regardless of citizenship status (so the non-doms can’t dodge it) or if the property ownership is registered abroad.
Such a tax system would very quickly force many of these casino landlords to sell up, indeed if we want to avoid a rush of property sales on the market and a crash in house prices, a simple solution would be to offer them a deal whereby they get a substantial discount in the tax, if they give their tenants a similar discount in rent (e.g. the landlord puts down the rent by 30% the government lowers his property tax by 30%, tenants will then presumably spend the many on other things boosting economic growth) and so long as they sell said property within the next 10 years.
Alternatively if were not going to allow squatting how about a rule that states that if a property remains unoccupied for more than, say 6 months (for reasons other than refurbishment), then the local council is within its rights to take over the property and use it to rehouse homeless people (obviously they’ll pay the landlord the going rate for social housing in the same area and take the necessary steps to ensure the property is well maintained for the duration) while the landlord looks for tenants. Of course as I suspect the last thing most landlords want is a load of poor people in his plush pad, he’ll very rapidly lower the rent to a level sufficient to get it let before this 6 month period expires. They’ll also be more keen on keeping flats maintained and thus hanging onto tenants.
Whatever measures are taken the UK is burying its head in the sand on property. The current near medieval system of ownership and renting is being exploited by a small number of spiv’s and speculators, distorting the property market and threatening the long term economic stability of the country. If we’re going to say that squatters don’t have a right, how about at least enshrining the right of everyone to some form of home.