Nick Bano, Against Landlords: How to Solve the Housing Crisis (Verso 2024), 240pp. Nick Bano, Against Landlords: How to Solve the Housing Crisis (Verso 2024), 240pp.

Bano’s Against Landlords shows how myths about the housing market, and government encouragement of private land-lordship have reached a crisis point, finds Graham Kirkwood

If you’ve ever played the boardgame Monopoly, you will know that as you go round the board from Old Kent Road to Mayfair, the amount that you need to pay your opponents for landing on their property increases. This ‘rental’ increases in line with the value of the properties; as rent goes up, so too does the value of the property.

The relationship between rent and property prices is the main theme of this excellent little book by barrister Nick Bano. Approaching the issue historically and analytically, drawing on Marx and to a lesser extent Engels, Bano sets out clearly and convincingly how we have all been hoodwinked into thinking that house price rises are due to lack of supply and therefore the solution to the housing crisis is to build more houses.

This ‘red herring of supply arguments’ (p.110), this ‘article of faith’ (p.202) is repeated by both Labour and Conservative politicians. The key lesson of this book is that house prices are driven up by rents, not the other way round. It is the monopolised rental market where there is no real competition over rents that is the real source of the housing crisis. ‘The simple fact is that, where rents are unrestrained by law, they can reach monopoly prices – and those monopoly prices determine land values’ (p.202). Bano cites Marx, ‘landed property … by its very situation in populated areas carries a monopoly’ (p.29).

In reality, there are more homes available than required as measured by the number of households. In 2001, there were an estimated 791,000 more homes than households; in 2019 this had risen to 1,231,000 more homes than households. Despite this, rents in 2022 alone increased by 20.5% in Manchester, 19.6% in Cardiff and 18% in Edinburgh (p.5) and the price of houses increased 181% between 2001 and 2019 (p.8).

Building houses is also one of the most carbon-intensive activities and immensely damaging for the climate (p.109). Routinely, we see viable buildings being torn down for redevelopment, a ‘gross act of ecological vandalism’ (p.203).

We nearly got rid of landlords

‘Before the 1980s the cost of housing was much lower than it is today. Landlords could not command the extravagant rents that we have come to take for granted. Private rents were capped and regulated by law, and the large-scale provision of council housing had diverted a very large number of would-be consumers away from the private rental market altogether’ (p.3).

Following the Second World War, both Tory and Labour governments built council housing to such an extent that by the 1970s, private landlords were almost extinct. By 1973, the percentage of privately let homes had fallen to just 13% from 61% at the end of World War II (pp.57-8).

It was this situation that Thatcher set out to reverse with her changes in the 1980s, most fundamentally with the sell-off of council housing under the right-to-buy scheme. More than two-million council houses have now been sold in England with around 40% of these now in the hands of private landlords (p.21).

Bano spells out in detail how the changes instigated by Thatcher’s right-wing Tory government in the 1980s have directly led to homes becoming unaffordable to rent or buy for vast numbers of working people. Combined with the inadequate supply of social housing, this has meant many now live in houses where rent accounts for half their income, compared to just 6.5% for the average British household in the 1950s (pp.6, 76). The total national rent bill is now £63 billion (in 2022), up from £27.8 billion in 2008 (p.42). It has also meant vast sums of money transferred from the state to private landlords in the form of housing benefit.

In favour of rent controls

The other major change brought about by the Thatcher government was the abolition of rent controls. Until the 1990s, all tenancies were secure and rent controlled (p.82).

Rent controls didn’t come from nowhere. During the First World War, a campaign in Glasgow which refused to pay increased rents joined forces with the militant trade unions on Clydeside to force the government to act (pp.102-3). The employers made a big mistake by docking workers’ wages for unpaid rents, bringing the community and unions together. The movement threatened to spread to other cities, including Birmingham and London (p.104). In less than a month, the Rent and Mortgage Interest Restriction Act 1915 was brought into force. This brought in rent controls which lasted almost until the end of the century (p.104).

There is a history of struggles over housing and, in particular, rents. In the 1930s, these were linked in the UK with struggles against fascism, where activists were successful in displacing the British Union of Fascists’ influence among tenants.

Not every country has gone down the extreme route taken by the UK. In Berlin for example, landlords are required by law to justify every rent increase and such increases are capped at 15% over three years (p.19). No such law exists in the UK.

The petty landlord

The Tory housing reforms of the 1980s have resulted in a huge increase in the number of private landlords in the UK; from 600,000 towards the end of the 1990s to over two and a half million today (pp.71-2). We now have four times as many landlords as teachers. Inadequate pension provision is one of the issues which has encouraged many to buy second, third and more properties to rent out. TV programmes such Homes Under the Hammer encourage and thrive on this phenomenon.

There are political consequences to this: ‘admitting a greater number of people into the club of landownership convinces them of the need to preserve the sanctity of private property in general, and thus of capitalism more broadly’ (p.73). ‘These landlords’ interests are aligned with those of the nearly 15 million owner-occupiers whose prosperity relies on property, and therefore on a strong rental market’ (p.92).

Landlords in the UK have been normalised as our peers, unlike say in Madrid or Berlin, where there is increasing concern over the role high finance plays in controlling local neighbourhoods (pp.86-7). In 2021, 94% of all landlords in England were private, individual landlords (p.74).

Things may be changing in the UK however, where ‘direct rule of large-scale capital in the rental market appears to be on the rise’ (p.186) For example, in 2021, Lloyds Bank announced it was buying 50,000 homes (p.186).

When notorious London landlord Peter Rachman was operating in Notting Hill in the 1950s and 1960s, he resorted to violence and intimidation to drive tenants out or to force them to pay higher rents (p.27). Today, under the no-fault-eviction law, landlords can do this without all the bother to which Rachman had to go. They can simply tell tenants to leave, put up the rent, and get some new tenants in who are willing to pay. Section 21 no-fault eviction means that as long as procedure is followed, landlords have an absolute right to evict (p.90).

It is the assured shorthold tenancy regime which allows rents, and consequently house prices to rise so quickly. These tenancies became the default via legislation passed in 1996, the same year buy-to-let mortgages became available (p.78).

Housing and race

Another issue explored in detail in Bano’s book is the issue of racism in housing. Race, home ownership and immigration have been inextricably linked in the public consciousness (p.130) by successive governments.

Immigration has been blamed consistently for a housing shortage. In 1963, for example, the Tory housing minister, Keith Joseph managed to blame housing profiteering on a shortage caused by immigration, despite admitting that London’s population had fallen and the number of houses built had increased (p.129). Enoch Powell’s infamous racist speech in 1968 centred on a fictitious anecdote about the rights of a white landlord to refuse to rent out rooms to black tenants. Theresa May’s government brought in the racist law forcing landlords to check their tenants immigration status, a law which passed with only six Labour MPs voting against (pp.125-6).

More recently, we have witnessed the indifference shown to the safety of Grenfell Tower’s residents. The tower, named after colonial-era Field Marshall Grenfell, who fought wars for Britain in South Africa and Egypt, was covered in combustible plastic and populated with tenants from Britain’s former colonies, or descendants of those who were. Of the 68 people who lost their lives in the fire, 57 were non-white (p.134).

Will there be a crash?

Bano talks about the real potential for a crash. It may be slower and less spectacular than previous crashes, but is inevitable, nonetheless. He quotes Patrick Jenkins from the Financial Times: ‘as night follows day, bust in real estate markets follows boom’ (p.174).

At the beginning of the twentieth century, a boom in property development came crashing down and house prices fell by 40%. This followed on from years of falling wages (p.169). Similar to today, falling wages had led to a cost-of-living crisis where working-class tenants were no longer able to pay the rent rises being forced on them.

What exactly will happen when the ‘unstoppable force of an economy founded on rent rises meets the immovable object of wage restraint’ should concern us. ‘Finding the limits of monopoly prices in the rental market will not be a quick or straightforward process, but a slow, structural and deeply painful one. It will, no doubt, involve evictions for rent arrears or rent hikes, large-scale inability to find adequate housing, and a great deal of stress, worry, movement and sacrifice’ (p.171).

A consensus in favour of council housing has been turned on its head. The homelessness charity Shelter now accepts that landlordism has a valid role to play in society as did the Corbyn-led Labour party (pp.84-5).

The evidence runs contrary to this and points to landlordism and the monopoly on rents feeding the crisis in house prices. The solution is a return to the pre-1980s consensus and to socialise Britain’s housing stock. Only by curbing the market in housing can it be returned to serving the population’s needs.

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