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The short term: Chaos
First, some ground rules. Let’s assume being a landlord is made illegal overnight. Tenants won’t be made to leave their homes, however, until the landlord has been able to sell up.
On a basic level, any landlord would tell you they do provide a service: housing. But get rid of the landlord, and the house remains.
It would be chaos in the short term. More than one expert we contacted pointed out this would fail at the first hurdle. They’re probably right.
“Gratuitous dislocation for millions of households,” is how one professor described the likely outcome.
Where does everyone go after this? Would courts sign off on eviction orders? Just picture whatever bedlam you fancy. In a way, that’s not the interesting part.
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The medium term: A house price crash is most likely
It’s the medium term when things get tasty. If we pretend the short-term mayhem has subsided, we can start building a world without landlords. What does it look like?
“The big impact would of course be felt in land and therefore house prices. At the moment, homes are assets and a means of capturing rent – imputed rent for the homeowner and an actual rent on buildings for the landlord,” says Nick Gallent, professor of housing and planning at UCL, who gamely answered my questions.
Assume 4.6 million houses enter the housing market as a result of our big experiment. Although house prices are reasonably inelastic – meaning they don’t fall so fast when supply increases – it’s still got the potential to wreak havoc.
“Landlords would exit the market. There would be a supply glut. The value of residential land would fall, as would house prices,” says Gallent. “It would be a huge shock and would probably lead to reduced housebuilding and a mortgage (negative equity) crisis.” In other words, if values fall, homeowners across the country would find themselves in a position where their mortgage is bigger than the value of their home.
This is one conflict at the heart of trying to make homes more affordable: it is difficult to knowingly bring house prices down and make housing more affordable without incurring the wrath of the millions who would find themselves with less valuable assets. It would be electoral oblivion.
“In time, the crisis would recede (along with the political and economic turmoil), although the party instigating the change would never be trusted again,” adds Gallent.
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The long term: House prices begin to get fairer
In the longer term, what would a world without landlords look like?
House prices could become aligned more with earnings, and treated less as assets in their own right. Gallent estimates around a 1:3 ratio (where house prices are three times greater than incomes) would be desirable.
“In short, if housing cannot be a business then the demands on the housing stock will recede. That will bring about a realignment of earnings and land/house prices,” says Gallent, stressing some regulation of second homes would be needed.
Ultimately, it could still just be the equivalent of shuffling chairs on the Titanic unless more houses are. There are broadly two kinds of housing policy, explains professor Iain Begg, a professorial research fellow at LSE’s European Institute. “One (the more valuable for most people) is about adding to the housing stock; the other shifts ownership or control of the existing housing stock among different groups, with the result that some people win and some lose,” he says. “For example, the Thatcher government selling council houses to their tenants at a discount, benefited the tenants, but deprived those on waiting lists.”
There would be wider consequences to getting rid of landlords, too – an end to landlordism. As Nick Bano, author of Against Landlords, argues, landlordism is pushing rents higher and creating insecurity. The interests of landlords are prioritised, and decommodifying housing would lay the foundations for ending the housing crisis.
What are the alternatives?
Clearly, getting rid of landlords isn’t going to just happen. But along the way, a few practical alternatives present themselves.
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Land value tax – where taxes are regularly levied on the value of land – could be a way to ease the housing crisis, Gallent argues in an article for The Conversation. The value of land has become the foundation of the UK economy – but homeowners do not get taxed on this. Doing this, while also decreasing income tax, would mean richer buyers and cheaper house prices.
Another option is to phase out the desirability of renting, by redirecting tax relief subsidies to councils and housing associations, as well as increasing the supply of socially rented housing. This would mean more homes become available to buy as landlords simply lose the will to carry on.
How would the Green Party get rid of landlords?
The Greens’ plan to get rid of landlords has five steps. First is rent controls, then the abolition of Right to Buy. Next, the Greens would increase taxes on Airbnbs and empty homes.
Then buy-to-let mortgages would be abolished, and councils would be given the Right to Buy properties which fail to meet insulation standards, are being sold by landlords, or have been empty for more than six months.
But former Green leader Carla Denyer, currently the MP for Bristol Central, said the “eye-catching” policy doesn’t actually amount to fully abolishing landlords. Instead, Denyer said, it would empower tenants and “reduce the proportion of the housing market that is privately rented”.
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