Why They've Got The Housing Crisis So Wrong

From every aspect, housing is in a crisis in the UK. There are very few rental options in areas close to employment, what little there is is vastly over-priced. Many landlords would rather sell up small portfolios than even try to offer fairly priced rents as the inflated interest rates and the removal of tax incentives prevent them from doing so without taking a loss every month. If you are selling, you often must reduce the price to achieve a sale and if you are buying you are faced with the highest interest rates we have seen since 2008.

Many loud voices in recent years will be quick to say how wonderful it is to tax the landlords and force them to sell up. While the rage is understandable, it is misguided to point the finger at your landlord and simply place the blame on greed. The fault lies in a succession of governments who have appointed entire departments to housing who have little to no experience in the housing market. It is mis-management on an industrial scale, by those who seek to appease the angriest demographics rather than take the concrete steps to correctly manage housing.

The base problem has been in effect since 1980 with Margaret Thatcher's "Housing Act 1980" which introduced Right to Buy as a compulsory measure. The initial concept of this scheme had no problem in the housing market and in concept was a highly positive move. Vast numbers of council tenants became home owners and dated council stock passed into private hands rather than the local government face the refurbishment costs. The first iteration allowed for the proceeds of the sales to go back in full to the local housing departments to be spent on a 1 for 1 replacements scheme. In effect using private funds to finance the building of new and modern council housing. In this concept, it was a masterstroke of housing management, but like all success stories, it was a succession of incremental changes and external negative factors that was it's undoing.

Quickly councils began to neglect the idea of the 1 for 1 replacement, with council housing gradually becoming depleted nationwide. Nearly 45 years later of slow but consistent degradation of local government owned housing stock, our council housing needs are now almost entirely reliant on private landlords and housing associations. The problem was never that council tenants became homeowners, it was the catastrophic mismanagement in the onward planning by those at the very top of government. Allowing council tenants the right to buy homes at a discount was a huge vote winner, but failures of management combined with poor financial discipline throughout local governments created a system a generation later that relies on external suppliers. To put it in perspective, the sum total of tax payer money paid to private landlords for housing council tenants in 2024-2025 was ￡73 billion, six times more than the government budgeted for the same period for affordable housing.

At the same time, the central government has spent the last few years placing private landlords under huge financial pressures, driving up their costs and increasing regulatory requirements. Now faced with compulsory EPC upgrades that stand to cost some landlords 10's of thousands per house, landlords are now selling up in larger numbers than ever before. In what it widely seen as "an attack on the wealthy" it is instead harming the lowest income earners disproportionately. Without doing the research, the central government would have found a corelation between the lowest EPC scores and a likelihood of being open to consider accepting council tenants. By increasing these financial pressures, the government has elected to "cut it's nose of to spite it's face". Private landlords are now the largest suppliers of government housing and those specifically supplying local governments are disproportionately likely to be looking to sell up their portfolios.

This issue brings us back to the same lack of forward planning that we saw during the worst years of Right to Buy. If the government forces their own suppliers out of business, where do the already multiple years worth of back-logged housing list tenants go? There is seemingly no onward plan for the housing lists, as private landlords when faced with a short supply of housing combined with higher numbers of tenants that ever before, will always prioritise the highest incomes and the safest tenants. Those most at need of housing already are struggling with a system that is stacked against them and will only continue to struggle more if we continue down the current road. The housing crisis is not that a graduate can't afford a studio in a fashionable part of London, the high cost of which is only partially the fault of the ongoing crisis, a much larger part of the cost of such housing is predominantly ego and fashion statement. The crisis is that the state is now unable to provide basic housing needs for the most vulnerable.

This crisis acts as a ripple effect from the lowest levels of the market, growing more noticeable as it moves up to the higher end. If the supply of state housing is squeezed, most of those who should be served at this level are forced up, into state supported private housing which is rarely affordable. This trend continues throughout the market, leaving us in the position where tenants are now paying more than ever in history for rents, yet landlords are selling up due to still not making a profit.

The solution is simple, yet sadly ignored by most in government in favour of overly complex schemes. Right to Buy needs either total reform or abolishment to stem the flow of council stocks being sold at discount to the private market. In addition, we need to move focus on simply building homes by the thousand across the greenbelt, as these homes are built predominantly for the middle and upper classes in suburban locations who are least affected by the housing crisis. Instead we need a renewed focus on building quality, modern homes owned by the state. Gone are the days of the 1960's concrete council estates, with modern construction, there is no reason council housing should be in any way distinguishable from private homes, but built to serve as housing for those most affected by the ever growing crisis. If the state was able to reduce the dependency on the private market this this method, it would also reduce supply pressures throughout the wider market and create space for rents to finally reduce.