Ben Cooper column: ‘End the slum landlord subsidy’

Every year, the state must rent thousands of homes for people in desperate need. Councils are required to find temporary accommodation for those at risk of homelessness. The Home Office needs properties for destitute asylum seekers awaiting a decision. Homes are needed for prison leavers, older people with support needs, and women at risk of domestic violence.

The amount of taxpayers’ money involved in this crucial activity is enormous – and has grown in recent years due to the housing crisis. Around £2.8bn a year is spent on temporary accommodation. A further £2.7bn is spent on asylum accommodation, with hundreds of millions being spent specifically on housing. An effectively unknown amount is being paid to providers of supported housing that is ‘exempt’ from the cap on housing benefit. 

With billions of pounds of public money involved, and few alternatives, landlords can make significant profits. Successful businesses have been built on owning large numbers of poor quality homes, or acting as a middleman who can lease properties from landlords. Yet these profit-making activities have been subject to very little official scrutiny or regulation. The state effectively guarantees rent payment in return for a home, but rarely gets a good deal for tenants or for taxpayers. 

In many cases, the home provided is decent and liveable. For anyone in desperate need of a roof over their head, it is better than the alternative of sofa surfing or living on the streets. And until we build enough council and social homes, there will be a role for the private sector to provide this accommodation. 

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But the state is often renting homes that are substandard and dangerous. Mould, damp, pests, sewage spills, and floods have all been reported in housing rented by the state. Vulnerable people are often stuck for months – and even years – in accommodation that is overcrowded and unfit for human habitation. Even worse, millions of pounds have reportedly gone to gangs and organised crime that are exploiting the rules on exempt accommodation.

There is a new generation of slum landlords across the country who exploit people’s need for housing, just like their Victorian and post-war counterparts. Except this time, the state is funding them – and being ripped off by them. Slum landlords have found a ‘magic money tree’. They make substantial profits, in return for homes that fall into disrepair and which harm those who have no choice but to live there. 

Slum landlords also have a major effect on many communities. In many places where this housing dominates, their poor quality contributes to a sense of neighbourhood decline and to people’s feeling that the country is broken. Taxpayers are effectively funding this decline. It is a slum landlord subsidy.

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It also speaks to people’s sense that the state is not in control. Slum landlords exploit state weakness. Councils and the Home Office compete against each other for the same home, enabling landlords to force the rent up. Regulations on quality either don’t exist or aren’t enforced, so landlords can cut corners, neglect repairs, let the property fall apart and rake in the profits. And underpinning it all is a scarcity of social homes. If there are few alternatives, landlords can ensure their properties will always be in demand from the state. A state that is in control would not allow this business model to exist. 

Every generation of progressives has had to take on some form of slum landlordism. Nearly 100 years ago, a Labour Housing Act required private landlords to sell slum housing to local councils. The Minister for Housing at the time was clear: the landlord “must put this house into repair, and … must keep it in repair, and … must not overcrowd it anymore.” 

A similar spirit should inspire this Labour government. The state should restore public control over housing, bring the slum landlord subsidy to an end, and use public money to drive up the quality of homes and neighbourhoods – rather than funding their decline. The government and councils should work together on regulation, enforcement, and compulsory purchases to make this happen.

Andy Burnham has promised greater public control over the essentials. That must mean taking control of housing back from slum landlords. 

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