When Christmas wishlist is an affordable home – David Alexander comment

As today is Christmas Eve and this is a property column it seems appropriate to point out that an “accommodation crisis” led to Jesus being born in a stable.

a castle like building in a city

                                    © The shortage of permanent residential accommodation is as acute this Christmas as it was a year ago,…

That crisis was, of course, temporary, the story being that the people of Israel were compelled by their Roman masters to return to their places of birth for census and tax-gathering purposes – which was why there was “no room at the inn” when Joseph and Mary eventually reached Bethlehem from their home in Nazareth.

In this most unusual of Christmases, certainly since at least 1944 (when war was still raging in Europe), there is plenty of room at the inn, because due to the pandemic, hotels that are usually bursting at the seams at this time of year are either closed or are between 50 and 90 per cent unoccupied.

However, the shortage of permanent residential accommodation is as acute this Christmas as it was this time last year and no doubt will be next Christmas even if by then life has returned to something resembling “normal”.

In the Christmas of my early childhood there was a “housing shortage” of a different kind in Scotland, i.e. the number of households with not enough space and a lack of basic amenities, like bathrooms and even in some cases inside toilets. Now Scotland has, more or less, sufficient homes to accommodate its population but – unlike the 1960s, 70s and 80s – not enough that are deemed “affordable”.

A major contributing factor, the consequences of which are still with us, was the sale of council housing, albeit now banned in Scotland. This was a policy I enthusiastically supported because it opened up a whole new vista of choice for our people, especially those on modest incomes. It meant, for example, that working-class couples in middle age, and even older, suddenly found the distinct possibility of home ownership within their reach – something that would have seemed unimaginable when they married two or three decades before.

But there were pitfalls, such as perhaps over-generous discounts that drew in to owner-occupation some people who might have been better off in the longer term continuing to rent (with their properties remaining in public ownership to house the next generation).

It was unfortunate too that local authorities were not permitted to keep the income from sales to fund at least a measure of replacement social housing. Also, greater restrictions could have been placed on subsequent selling to investors. This would have prevented the dichotomy whereby a private tenant in a semi-detached former council house is paying twice as much, for basically the same accommodation, as his next-door neighbour who still rents from the authority.

Such a move, of course, would have been unpopular among economic liberals and led to accusations of “interfering with the market” – but surely offering discounts of up to 70 per cent of a property’s market value to tenants was in itself interfering with the market?

Unfortunately examples like this, which are not typical of most privately rented stock, are often used to attack private landlords in general and to use them as scapegoats for the shortage of affordable housing when in fact it has, for many years, been down to other factors.

Changing circumstances

I know, from dealing with them as tenants, that most incomers to Scotland from the “new accession” EU countries have a high work ethic. However, there was a failure to plan for the sudden growth in population that government must have known would follow when they were given the right to live and work in Britain. Another contributor has been the increase in divorce and separation which, of course, led to tens of thousands more families needing two places to live when before one would have sufficed.

But rather than face up to these situations, government has instead responded with ever-increasing letting regulations (although to be fair not all of this has been bad) and squeezing ever more in tax from profits.

Regrettably, some politicians go further and want to introduce rent controls so that private sector lets become “affordable”. In fact this would result in many landlords selling up (even at a reduced market price if necessary) thus leading to fewer homes being available for rent.

Inevitably, rent controls would also further increase demand for temporary accommodation from homeless families (which councils have a statutory duty to fund) – paradoxically, of course, bringing some financial relief to those hoteliers who currently have a surfeit of empty rooms.

David Alexander is managing director of DJ Alexander

Source: Scotsman.com

 

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