The issue of rents was on my mind yesterday, with both a post and a video on the subject. So, last night I did a little back-reading on the subject to remind myself just what has changed over my time as a person who has rented accommodation (albeit, not for a while now).
I fairly quickly came upon the Rent Act, 1977. Note the year. This was Labour Party legislation. It would be very hard to imagine anything like this coming from Labour now, and yet it is precisely the sort of thing that it should be delivering.
I used ChatGPT to summarise what that Act said. The text is in italics to emphasise that this is not my work:
The Rent Act 1977 was one of the most important pieces of housing legislation in post-war Britain. It consolidated and updated a long line of rent control laws stretching back to World War I. Here's a breakdown:
1. What the Rent Act 1977 said
The Act consolidated previous rent control and security of tenure legislation. Its key provisions were:
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Security of tenure:
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Gave tenants in the private rented sector (PRS) strong rights to remain in their homes, creating the legal status of the “protected tenant.”
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Tenants could only be evicted on specific statutory grounds (e.g. landlord's own use, redevelopment).
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Fair rents system:
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Introduced the concept of a “fair rent,” set by an independent Rent Officer.
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Rents were assessed based on property condition, age, location, and amenities — but deliberately excluded market scarcity value.
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Once registered, the fair rent capped what the landlord could charge.
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Succession rights:
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Tenancy rights could be passed to a surviving spouse or sometimes a family member.
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2. What it achieved
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Tenant protection: It gave tenants strong security and affordable rents, protecting them from arbitrary eviction and sudden rent hikes.
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Stabilisation of private renting: For a time, it created predictability in the PRS.
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Long-term homes: Tenants could realistically treat a rented house as a secure home.
However, it also had side effects:
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Landlord withdrawal: Many landlords exited the PRS, selling up or not re-letting properties, because they felt returns were too low and rights too weighted toward tenants.
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Decline of PRS: By the late 1970s/early 1980s, the private rented sector had shrunk dramatically, from about 55% of households pre-WWII to under 10%.
3. Why and when its provisions were replaced
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Ideological shift: The Thatcher government in the 1980s viewed rent control as a distortion of the housing market.
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Housing Act 1980: Began erosion by introducing “shorthold tenancies” with limited security.
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Housing Act 1988: This was the big change. It:
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Abolished new Rent Act “protected tenancies.”
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Introduced assured and assured shorthold tenancies (ASTs).
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ASTs gave landlords the right to repossess property after a fixed term (initially 6 months, now effectively the default PRS contract).
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Abolished rent regulation for new tenancies, allowing market rents.
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From 15 January 1989, almost all new private lettings were under the 1988 Act — effectively ending Rent Act protections for new tenants.
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Residual rights: Existing “protected tenants” under the 1977 Act remained covered until they moved or died. A small number still exist today, paying fair rents set by Rent Officers, but they are very rare.
4. In summary
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The Rent Act 1977 entrenched rent controls and tenant security, creating stable but regulated tenancies.
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It achieved affordability and security for tenants, but contributed to a long-term decline in the size of the private rented sector.
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It was replaced by the Housing Act 1988 (in effect from 1989), which shifted the UK towards a deregulated, landlord-friendly system based on market rents and limited security.
The lesson from the Rent Act 1977 is not that rent regulation fails. The lesson is that when you regulate, you get security and affordability, and when you deregulate, you get exploitation.
A modern Rent Act would not need to replicate the exact mechanisms of the 1977 Act, as it does not offer a perfect solution to the problems we face. However, it would need to revive its principles. In particular:
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Security of tenure must return. A home is not a six-month commodity. People need to know they can stay in a property, unless there are fair and reasonable grounds for requiring them to move.
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Independent rent setting must be restored. The market should not be allowed to dictate rents that consume 40% or more of people's incomes. Rent officers, or their modern equivalent, must once again exclude scarcity from their calculations.
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The balance of power must shift back to tenants. The pendulum has swung far too far towards landlords. That imbalance lies at the heart of the present crisis.
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Homes must be seen as just that: property has to stop being treated as just another investment class. Housing is about people, not portfolios.
The point could not be clearer: without security, affordability and fairness, the private rented sector will continue to bleed tenants dry while enriching landlords. This process of exploitation is what is clear in the data from the Office for National Statistics that I noted yesterday. The current level of rents is not the accidental outcome of market forces. It is the direct consequence of Thatcher's dismantling of rent regulation in 1989.
We replaced fair rents with market rents.
We replaced security with insecurity.
We replaced homes with investment vehicles.
The result is today's rent crisis.
The conclusion is unavoidable.
If we want affordable homes, we must regulate rents again.
If we want stability, we must restore security of tenure.
If we want housing policy that works for society, and not just for landlords, then a modernised Rent Act is a place to start, alongside a massively enhanced role for government in social housing supply, including buying out existing landlords and their properties if need be.
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Thank you for an excellent short analysis and set of remedial actions!
P. S. Might this article be of interest?
https://michael-hudson.com/
Can you provide a specific reference?
Seems to be this:
America’s Free Lunch Economy / Corporate landlords are taking over, making life unaffordable: Economist Michael Hudson explains why (video and transcript)
https://michael-hudson.com/2025/08/americas-free-lunch-economy/
Thanks
I think that one of the problems is due to Private Equity, which buys businesses with a view to profiteering from them.
We see it in care homes (astronomical prices per week), vets, homes (Blackrock and similar), GP surgeries (and other NHS services including denistry), energy (highest in Europe), water (highest in Europe), etc.
I am not saying that all profiting is wrong, but when the services are essential, you don’t make a profit from people in need.
Agreed
But surely the whole ideology of capitalism is to extract the greatest financial rewards even if this eventually means the destruction or death of the investment?
As someone who brought up my family in housing association property at rents controlled by the Fair Rent Act I’ve seen (and predicted) what would happen with its abolition: skyrocketing rents and little security of tenure and a return of exploitative landlords. That and the sale of council houses with councils forbidden to invest the proceeds in more social housing has utterly broken our “affordable housing” system.
Agreed
“The balance of power must shift back to tenants. The pendulum has swung far too far towards landlords. That imbalance lies at the heart of the present crisis.”
This shows how out of touch you are. Why are private landlords selling up at a rapid pace? It now makes little commercial sense. The truth of course is we have a growth in the population which housebuilding cant keep up with. It is another symptom of the problem of migration and inability of the infrastructure in the UK to keep pace.
Your comment makes precisely no sense.
A growing population is good for landlords when supply is limited. Your racism does instead shine through.
I have never quite understood why landlords leaving the PRS is such an issue. They cannot take their properties with them so they remain available for occupation, either through sale of through an alternative landlord. The amount of housing stock is unaffected.
Agreed
I let out my own home for 20yrs while in a low paid professional job with housing provided (sev counties away).
We had a good agent, and various tenants came and went, and we did our best to be responsible landlords.
I had occasional problems with “bad tenants” including one where the rent stopped being paid – an alcoholic tenant who lost her nursing job, then started using the property for sex work, while her little girl sat on the step. Our former neighbour told us the story as tenant wasn’t communicating. My agent and I encouraged her to apply for housing support and attempted to help, while preparing the paperwork for eviction should it be necessary. But she was lying about having applied for housing benefit, and she quickly flitted of her own volition owing sev months rent and leaving a lot of rubbish and posessions behind including her daughters toys. There was minor damage to property.
That is a sad & unusual story.
But I as landlord still had a valuable 3 bedroomed semi, my home, and a job and a tied house to live in – although I was on a low income facing 2 or 3 months further with a void, and repairs/redecoration to pay for.
But she had nothing, having lost her job, and having to cope with an addiction.. After she flitted we had no way of contacting her. I don’t know what happened to her. We didn’t bother trying to recover the money she owed us.
I have no illusions about who was vulnerable in that situation, and who needed help, it wasn’t me.
The law (made by a parliament of landlords) has protected bad landlords for far too long. I do not understand why rental businesses, especially leveraged ones, should ask for even more favours to enhance their privileged advantages over tenants. Businesses go bust every day. Professional landlords (anyone with a buy to let, especially a leveraged one) know what they are getting into.
I read yesterday that a new type of “finance” business has sprung up, in the wake of unaffordable rents – professional guarantors. The literature aimed all its arguments at landlords. I don’t think I’d like to be a defaulting tenant in one of those arrangements.
2 words that rarely feature in discussions about property –
People
Homes
Thanks
That’s great work RobertJ – I’m wondering if your period as a Landlord was between 1989 and when George Osborne became Chancellor and started the austerity taxes on Landlords.
“for a whole now”: you mean “while now”.
Corrected
Agreed.
I’ve experienced both. What I will say is that even under the old Labour rent act, there was abuse by dodgy landlords. I can remember in the past being given tenancy agreements to sign that were totally illegal. I lived in a listed building once, where the landlord broke every law! That was finally resolved after about twenty-five years!
It comes down to a question of policing the system. I would argue that has always been poor, with many local authorities being reluctant to do it (especially Tory ones), or not having the resources to do so.
Re, the scarcity question. Or lack of property.
Today on the BBC.
Empty homes are on the rise. So why aren’t they being used to solve the housing shortage?
https://www.bbc.co.uk/news/articles/c3r413l5n57o
The city centre where I live, and the surrounding area, has many empty buildings which could be converted to homes. Some have, by private developers, at very high rents. Some of these would be ideal for social or council housing. At present, they are just an eyesore, and a reminder of neoliberal decay and ignorance of need.
Then there is the old argument of planning consent, and how delays are supposedly responsible for scarcity. It’s not true. Most planning decisions are granted. The delays are from the industry, who I suspect prefer a degree of scarcity as it pushes up property prices and rents.
From 2021. Over 1.1 million homes with planning permission waiting to be built – new LGA analysis.
https://www.local.gov.uk/about/news/over-1-million-homes-planning-permission-waiting-be-built-new-lga-analysis
In many ways, it is the same old, same old… It just goes round in circles, and the housing crisis gets worse and worse.
Affordability is at the heart of it, and that is getting worse.
The answers are obvious, but who is brave enough to do it?
Thanks for that. And the links. Useful. They have made me dig deeper.
I live on an estate in the West Midlands that was originally built as social housing in the late 1960s and early 70s.
It is now a mixture of owner occupiers, private renters and social housing managed by an ‘arms length body’ for the local council.
I know of at least 12 empty houses, one of which is next door to me.
I’m sure this is replicated around the country.
I have posted several times on there in the comments section, replying to people who wrote
“The government, any government, has no money. It is there via taxes and borrowing.
Show me any government that will advertise that.”
with
“That’s not true at all. The Bank Of England creates money on demand when the government tells it to pay a government bill. Tax removes money from the economy later. “Borrowing” is just offering savings to large institutions.
If you insist that the the created money is a liability (which is isn’t) the liability is balanced anyway by the fact that you now own the asset.”
4 up votes, 6 down votes, at the time of writing…
Just a point about Scotland. Between 1979 and 2015 almost half a million council houses were sold into private ownership. But from the 31st, July, 2016, the Scottish Government introduced legislation banning such sales. How much of a difference that has made I know not, and as from the 1st, April this year temporary rent controls have ended, which means landlords have more flexibility to adjust rents, based on market conditions.
“In terms of the Organisation for Economic Co-operation and Development countries, the UK has roughly the average number of homes per capita: 468 per 1,000 people in 2019. We have a comparable amount of housing to the Netherlands, Hungary or Canada, and our housing stock far exceeds many more affordable places such as Poland, Slovenia and the Czech Republic. It is impossible to make a case for unique levels of housing scarcity in Britain, in comparative international or historical terms.”
From: https://www.theguardian.com/lifeandstyle/2024/mar/19/end-of-landlords-surprisingly-simple-solution-to-uk-housing-crisis
There is clearly something wrong with the housing market, particularly the rented sector. The young and poor in our society are being exploited by rentiers. I agree with most of your post.
However, I am not wholly convinced that rent controls is the right answer. That’s for the reason in your AI summary that it leads to a reduction in the private rented sector, which is pretty much all we’ve got at the moment.
Better, in my view, to provide a good, fair cost, alternative. A company or organisation could be set up by the government to provide as much rented housing as required at a reasonable cost. This would prevent exploitation by the private sector because people would simply rent from this organisation instead. It would not, however, prevent private landlords if they were good and fair.
In general providing a competing government alternative seems like a good approach.
We used to have something like this with council housing. Not so much anymore sadly. But I would extend that, with a new organisation, to anyone who wanted to rent. I would not limit it by means testing.
Thank you.
Very revealing. I didn’t know that about Labour – I was child in the 70’s and just remember them as a more secure time, walking past babies left in big prams outside our tiny corner shop.
So will Labour return to their core principals? Mmmm?
Not to mention the ongoing whole sale buy-up of properties by corporate financiers.
As one neighbour put it (with 4 adult children at home) they build houses to sell to rich people, who rent them out to poorer people.
The Rent Act 1977 wasn’t a UK wide Act applying only to England and Wales.
Noted
Do you have any view on the proposals from the Scottish Gov re Rent Control Zones? To me it seems a rehash of Rent Pressure Zone, which have never been put in place anywhere.
I need to look at them
Going back to the 50’s a lot of middle class people rented privately so issues like rent control were very important to – wait for it, The Conservative Party!
I recall AST vividly, I can still remember the name of the solicitors we had to pay more than a month’s rent to in legal & admin fees. And years later, being lectured by an agent on how my landlady was running a business and needed secure income… I came to understand that all the risk must be on me. When my year was up, I asked to about going on monthly rolling rent (I had been forced to pay a whole year’s rent up front, borrowed from my parents, as I was claiming housing benefit) and I was served a section 21 eviction notice. Definitely time for some reform. The stress of trying to find rented accommodation within school catchment when my children were in exam years was excruciating for us all.
I will be sticking with this theme
I have commented under another post today on what I think are the causes of our current dysfunctional housing system and the negative consequences for our social fabric, but i neglected to mention one serious negative effect and that is the decline in the birth rate. People of child bearing age are finding that they cannot afford decent secure affordable family accommodation and are therefore having fewer children or none at all. We are not alone as a country in having a falling birth rate, but ours is falling worse than anywhere else. I have great sympathy with the need to lift children out of poverty and those who call for it to be done by lifting the two child benefit cap, but would point out that this is another case of the state being obliged to spend in order to fund excess rents by landlords. In a properly run society parents would have jobs that paid them enough to afford a decent home for their family. The state could step in with tax allowances whilst the children grew up, but it shouldn’t have to be subsidising low paying employers and high charging landlords. THAT is why the benefits bill is so high, not because of “idle benefits claimants”.
The Michael Hudson article which seems to be relevant to your article “We Need a New Rent Act” is entitled “America’s Free Lunch Economy” of Tuesday, August 19, 2025.
Hope this works!
Very good. Now read it
Renting houses has now become a very attractive commodity as an alternative to a typical pension fund in retirement. According to the English private landlord survey 2024 45% of landlords in the UK own just 1 property with the next 38% owning between 2-4 properties. Personally I would be very uncomfortable as a rentier taking advantage of the excessive rents charged mainly to the younger and poorer of our society that can’t afford to buy. If you challenge these landlords they all say that they are providing a great service and are if anything losing money. However if you look at the huge number of small landlords it seems hard to believe that they are all such altruists. We should reintroduce rent controls like we had in the 70’s which would force many landlords to sell properties, this would have the effect of reducing house prices across the board and enable our young people to buy affordable housing. This book by Nick Bano is definitely worth a read. https://www.amazon.co.uk/Against-Landlords-Solve-Housing-Crisis/dp/1804293873
There is a video coming on this.
In my local paper, the Northern Echo, there is mention of two housing estates which have been almost finished but nobody in the houses. One estate has been empty for seven years.
Surely this shouldn’t be allowed. Private builders get planning permission with certain stipulations. One should surely be that if not lived in by a certain date the houses could be handed over to the council for council housing. Sold to them at the cost of building? That would encourage builders to get on with selling them.
Why are they doing that?
It seems to make no sense.
I know that in London properties are sold off plan, often to people from overseas, and many are very rarely occupied, but I am not sure why this should be the case in a housing estate in the Northeast. Have you any clue?
The one I saw appeared to have some finished houses but much of the area was derelict. Perhaps the developers ran out of money
Ah…that’s different.
Cyndy, the houses aren’t derelict. The site looks derelict because nobody has lived in them. It doesn’t say why, but that the council is trying to sort out the situation. It’s near Bishop Auckland.
Yes, it’s different if the builders have gone bust, but should it take so long to sort the problem out? There are newbuild empty houses which will become derelict if nobody lives in them, and we have homelessness growing all the time.
https://northeastbylines.co.uk/region/north-east/newcastle-quayside-west-explained/
Another interesting article about the north east. It’s a real mix up of the number of houses that are going to be built in West Newcastle over the next 15 years. What made me wonder is why announce it now? Could it be because Newcastle Council is up for election next year, every seat, and Majority seem to be getting a good press, working with Your Party and the Greens. Labour will promise anything these days to hang onto seats in councils.
By the way, my granddaughter has the A levels she needs, including an A* in art, to study architecture and urban planning at Newcastle University.
Good luck to her.
That’s a long haul.
Thomas Sowell goes to enormous lengths, using examples worldwide throughout history, to show that rent caps always reduce rental supply and increase rents for those not already renting. His argument is so strong it’s essentially inarguable. Supply & demand.
There seems to be a general hubristic assumption that modern people know so much more stuff than anyone who came before us that obviously we’re smarter, and therefore someone really smart – Torsten Bell, say, or Rachel Reeves, or Darren Jones, or Richard Murphy – will come along with some clever, rational scheme that will solve this problem once and for all..The ever increasing population and pretty stagnant housing starts is creating the imbalance. How can you not see that?
Very polutely, you come here quoting Sowell, a political conservative and libertarian who is a senior fellow at the Hoover Institution, a conservative think tank, and who has written extensively from a conservative and libertarian perspective who has been described as a “nonagenarian Black conservative/libertarian scholar” and you expect me to take your seriously? Really? You must think I was born yesterday.
Did you notice the oxymoronic language of the ‘assured shorthold tenancy’? I mean what an abuse of language!!
Studying housing in the late 1990’s, rent deregulation was blamed for making it too expensive for trainee nurses to enter the profession but there were also worries of housing costs going up and hurting the economy by claiming too much available income.
All of this has come true really.
You can trust unregulated capitalism to fuck it up every time and to exploit such a fundamental as shelter seeing as pure leverage and nothing else.
Much to agree with
I came across this today.
This company is quoted on the UK stockmarket
RentGuarantor shares debut on London’s AIM
Apparently, their average fee per applicant was approximately £755 (2024) which on average is approximately between 3-5 weeks of rent. They expect demand to increase with Labour’s Renter’s Rights Bill.
https://www.lse.co.uk/news/rentguarantor-shares-debut-on-londons-aim-after-aqse-exit-y3t21hk2k2jmff7.html
https://www.investegate.co.uk/announcement/rns/rentguarantor-holdings-plc–rgg/schedule-one-rentguarantor-holdings-plc/8985796
Under Neoliberalism, wherever money can be made…
Berlin introduced a five-year rent freeze in 2019 to curb rising rents. Two years later the policy was overturned as rental supply fell by 40% and new builds pretty much stopped altogether. There was also a black-market in rentals as both renters and landlords sought loopholes. After the cap ended, rents spiked as pent-up demand hit the market. In short it was a disaster. Why do you think your idea of rent caps will now work?
Because those properties did not leave the market.
They did leave the market in the sense they went from being rental properties to being owner occupied. And the key point is that number of people living in a single rental property is far greater than if it was owner occupied. Think student accommodation and where young people in particular like to share. So properties do leave the rental market and that is what is happening now in the UK.
What do you have gas at owner occupiers?
Nothing being said makes logical sense.
You are showing classic troll characteristics.
@ Notjohn McGinn
https://www.taxresearch.org.uk/Blog/2025/08/20/we-need-a-new-rent-act/comment-page-1/#comment-1038717
You have made an incorrect assumption.
But your point was…?
Btw, bear traps aren’t helpful and this one wasnt’ very well camouflaged.
Perhaps you should list those taxes on landlords that you are referring to and explain why you label them “Osborne austerity taxes on landlords”.
While I am here, I should point out that there are NO taxes on landlords.
The taxes are on income from rents, and capital gains on property, not on landlords. If you are experiencing “austerity” and making a loss, on both your rent and the property value, you won’t be paying tax on either.
All sorts of tax exemptions are available to landlords, far more than are available to those on low incomes from employment.
For example as an employee it used to take me hours to work out allowable expenses and in-kind benefits. But for the land and property pages a small letting business got a flat rate expenses allowance of £1,000 whether they spent it or not.
The b****ds who own the rented accommodation my girlfriend lives in (in the Netherlands, not council housing but social housing run by supposedly non-profit organisations) are trying to kick her out because they don’t want to spend the money treating the rising damp in the walls.
Their aggressive tactics – totally illegal so we have a lawyer and will go to litigation – are shocking. But I think the worst feeling I got was when we had a sit-down with various lackeys and the chief lackey introduced himself as “asset manager”.
I felt the urge to punch him before a word was said…
Look at the Dutch…
Landlords overcharging rent is called ‘huisjes melken’ = house milking in Dutch – is considered a disgrace in Dutch culture and the concept is taught in schools. Having a safe place to live is one of the basics one needs to make life happen and condtribute to society as a whole. No home – no life.
Think/develop of specific words and phrases in English that reflect the phenomenon of landlords finanically exploiting their tenants and with that abusing their position of power over their tenant. I call it ‘tenant fleecing’. However this needs wider language development. The Brits see it happen, yet the language is missing.
The Dutch government has been implementing several rules and legisation to prevent landlord abuse. There are at least ten. here are a few:
1. Since January this year, 2025, all rent in the private sector has been made equal to the rent in the social housing sector. This is enforced.
2. During one’s life time, one should live in either a property they own or social housing. The least of one life should be spend in private rental property – and should be seen as a temporal/transitional phase.
3. When buying a house – the owner has to live in the property for 3 years before being allowed to turn the property into a rental property.
4. Middle income must be allowed to access social housing – the income threshold has been raised. With the intent that middle income can thus save more and buy their own home sooner.
5. All council districts need to have atleast 30% social housing minimum. Currently some have 4%, others 65%.
6. The private housing sector needs to use a point system to calcutate how much rent is charged. Tenants can use this system to calculate and see if they are over charged. Landlords are made to pay back to their tenants. And checks/enforcement are carried out.
Furthermore: fraud – there have been cases of fraud and corruption in the housing sector. All in investigated and widely published in the Dutch news.
Private landlords have since been selling up, while families have been able to buy their own homes.
Thank you.
Reply to Pauline. I wish I were Dutch! Such proposals here would have the right wing newspapers in fits of “red revolution apocalypse ” headlines.
One of my last experiences renting was displacing an older woman on benefits, in an area which could credibly be accused of gentrification. It left a rotten taste in my mouth. Then I went to a neighboring city and saw an entire block of homeless tents. Having sat down and had lunch with homeless, and seen evidence of the physical violence women endure while being homeless, it was really heartbreaking. It makes you question what kind of society you’re part of when human beings are forgotten like so much trash.
We can talk about whether a rent-seeking economy is to blame (as in the Michael Hudson link), but I am skeptical of China being the model society he claims, and I am doubly skeptical of ideological solutions re: Marxism vs capitalism. The “-ism” ideologies serve one thing and one thing only: power. Ideologies never serve people. The enemy of my enemy is not my friend.
Moreover, ideologies are not really necessary in discussions about policy. They obscure more than they reveal. Okay, you’ve given me your theoretical framework, but in practice, how does this actually work? Who benefits? What are they doing with these benefits? What role have they created for themselves in their own society, and what kind of society are they building? Contextualization is important.
Personally, I’ve never seen rent seeking as inherently evil, provided it has boundaries; provided we live in a system which values more than money; provided we can care for our elderly, our disabled, our poor. What those boundaries should be, and how to go about building such a system – for me, those are the real questions. I don’t have the expertise to formulate answers. The only thing I know for certain is that the status quo is inhumane.