The Paradigm Shift In Housing
The last few weeks have rocked the very core of society. I will do the readers of this brief post a disservice if I try to unpick all the various complexities as a result of COVID-19. However, over a three part post, of which this is the first, I will explore the beginnings of a paradigm shift in housing (private and social), the need for more affordable housing for our ‘Unsung Heroes’ and how we must re-think housing to create better and more balanced societies.
There have been many profound shifts (seen and to be seen); however I would like to zero in on two key broad shifts:
We are stronger together – when society is in crisis it is incumbent upon each citizen to do their bit in a big or small way. Whether that is tending to the sick, reopening manufacturing plants to produce PPE, or stopping the spread of the virus by staying at home. I have been stunned and impressed by how enterprise and regular folk have risen to the challenge to serve.
Social Security – A personal anecdote; one of our tenants in a Zone 1 postcode text my colleague to say they are unable to pay their rent due to losing their jobs in a private dental practice. We agreed the best course of action was for the tenants to apply for Universal Credit (Government Welfare). It’s unlikely that my tenants have ever claimed a form of benefits in their adult life, so to my point, the perception of social security will be looked upon in a new light. Simply put, when things hit the fan, the government stepped in, and helped with money for our daily living and to pay our rents.
Change in perception
Over 1m new claims have been submitted to Universal Credit since the pandemic began, many of whom may never previously had a cause to claim benefits. Many of the new claimants may have previously been amongst those who had a negative perception of welfare and/or cast judgement on those who relied on it.
There is a common phrase banded around amongst those who work in the welfare/social housing sector, “most households are typically one paycheck away from homelessness”. We have unfortunately seen this very evidently over this short period.
In our life-time, this shift is comparable to the launch of the Welfare State by Labour in the 40’s. It is my belief and hope that after this difficult period, many of those who have claimed for the first time, will look upon those who continue to rely on benefits with compassion rather than judgement.
Also Landlords/Agents who proudly posted on online adverts or on their shop fronts, ‘No DSS’ (Department of Social Security aka Government Welfare) similar to in the 60’s when shops would say ‘No blacks, No Dogs, No Irish’, will awaken to the fact that anybody at any time can find themselves in a difficult financial situation. Tenants should not be judged by race, creed or where their money is coming from – whether from Government or a FTSE 100 company.
Housing is a human right and as Landlords (whether private or social), we have a duty to provide good quality housing for the population.
Lack of affordability
As renters see their incomes threatened, I believe their inner protester will begin to ask questions such as “Why are rents so high”, “My Landlord is greedy”, “Maybe I can get a rent reduction”. I believe all these questions and many more I haven’t listed, are valid.
In my next post I will discuss housing options or the lack thereof for our ‘Unsung Heroes’, who have put their lives on the line to protect the population, yet many of whom face housing insecurity, on top of unaffordable rent levels in the Capital.
I am not an advocate for rent controls, as I believe in market forces with gentle nudges from the Government. We must aim for better tenancy security by way of longer fixed rent terms, so long as tenants adhere to the terms of their agreement. Landlord’s should also be incentivized through the tax system to offer longer term tenancies. A reasonable long-term agreement should increase with inflation during its fixed term period of say 2-5 years.
The reality is property prices are far beyond the reach of many young people and as living habits of millennials are obviously more transient than previous generations, 25 year mortgages are either unaffordable or undesirable. As a new wave of Landlords will emerge through this crisis, whether large PRS (Private Rented Sector) providers or small portfolio Landlords, we must challenge conventional market forces by valuing continuity over profit, working with tenants not against them and seeing housing not as a luxury but as a human right, because when we are in a crisis, We Are All In It TOGETHER 😊
I hope you have enjoyed the first of many posts I will be writing on the topic of Housing. This is a time to serve and rethink and reshape our society.