David Alexander: Landlords not to blame for housing problems

If Shelter did not exist someone would need to invent it. This country has a serious problem with homelessness, and the charity does much good work on behalf of those affected.
David Alexander says the private rented sector is helping to alleviate the housing problem. Picture: Ian GeorgesonDavid Alexander says the private rented sector is helping to alleviate the housing problem. Picture: Ian Georgeson
David Alexander says the private rented sector is helping to alleviate the housing problem. Picture: Ian Georgeson

However, I sometimes wonder if Shelter does itself no favours by constantly focusing criticism on the conventional private rented sector.

According to a new report by the charity, Edinburgh is in the grip of a housing “crisis” with private renters and the young disproportionately affected. Across Scotland, almost half (46 per cent) of people needing Shelter’s help were private renters, despite the sector making up only 14 per cent of homes.

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Not for the first time, Shelter is concerned about the level of rent rises in the private sector, but as someone working at the coalface, I simply do not come across this on any significant scale.

However, should rents start to increase sharply it will be the result of a reduction in stock without any parallel decrease in demand. Recently, private landlords have taken a tax hammering from Westminster and had their lease options diminished by Holyrood, which is causing even some experienced operators to think about withdrawing from the market.

Another cloud slightly beyond the horizon is the prospect of interest rates returning to something like “normal”. Many more recent investors entered the market only reluctantly as a result of dismal saving rates. Should banks and building societies start to offer two- and three-year fixed rate deals at 3.5 to 4 per cent, then I can imagine some of them wanting to sell up and put their cash back on deposit.

In theory, reducing competition from investors in the sales market should benefit first time buyers but any “correction” in house prices is unlikely to significantly reduce the deposits required by mortgage lenders. Therefore the outcome would be more empty properties – and fewer homes to rent.

Private rental levels are a relatively small factor in contributing to lack of affordability, which is the result of social issues of which housing is merely a side-bar.

For most of my life the population of Scotland has hovered around the five million mark. But statistics just released by the National Records Office showed that in June last year the number of people living here stood at 5.4 million – an increase of 8 per cent over a relatively short period and almost entirely due to immigration.

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As a committed “Remainer” I support the free movement of workers throughout the EU but the fact is that recent governments have operated a policy of allowing and even encouraging large-scale immigration without making provision for the necessary additional infrastructure – not just in housing but in the health service and education as well. Some private landlords, it is true, have exploited the situation ruthlessly but the vast majority have simply responded to a social need not of their making.

Among other social issues which often rebound unfairly on the private rented sector is family breakdown. Tellingly, the Shelter report highlights a case where a man in east-central Scotland found himself on the street after his wife asked him to leave. A generation ago couples with marriage problems were more likely to reach a compromise that enabled them to stay together. Then there is the contemporary problem of homelessness caused by drug-taking among young people, some of whom leave even “respectable” households to pursue their habit.

It is a pity that while helping to alleviate this problem the private rented sector is accused instead of being part of it. I only hope it doesn’t get any worse.

The recent legislation passed by Holyrood on residential rental leases effectively means that Scotland will soon have an element of state control over private lettings.

Should that lead to rent controls then, believe me, in terms of a housing shortage “you ain’t seen nothing yet”.

• David Alexander is managing director of DJ Alexander