Wannabe landlords kill neighbourhoods

In my three years as chief executive of the Housing Corporation, our approach to affordable housing has changed fundamentally. We have opened up investment to private developers, local authorities and arm’s-length management organisations. We have overhauled low-cost home ownership options, championed modern methods of construction, and put policies in place to put residents at the heart of services.

We have made public investment go further than ever before by attracting private finance at a cost that is the envy of other parts of the market. In 2006/07 we completed more than 40,000 affordable homes for the first time in many years.

Yet, despite all this progress, significant challenges remain. Demand continues to far outstrip supply. Land costs continue to rise. And, as John Hills has rightly pointed out, we haven’t given enough attention to existing homes and residents. We have succeeded in addressing basic needs, but not in fully understanding and meeting people’s aspirations.

Thinking ahead, I believe the most important challenge that we must get to grips with is ensuring that we both build and transform neighbourhoods into truly mixed communities – economically and socially. Unless we get the mix right, we will facilitate change, but it won’t necessarily stick. It’s a mistake that has been made before. It is one we can’t afford, literally, to make again.

I was struck recently by a London Development Research study showing that two-thirds of new homes in the capital are now being sold as buy-to-lets. This is not just a London phenomenon, although it is more pronounced in the capital. There is also a worrying trend of “buy to sits” – homes bought purely for capital gains with landlords not even bothering to let the home.

There is a worrying trend in ‘buy to sits’ – homes bought
purely for capital gains with landlords not even bothering to let them out

I am aware of the importance of a healthy private sector in a successful mixed economy. However, in some areas, it is clear that this market isn’t functioning effectively. There are absentee landlords who have limited knowledge of the day-to-day maintenance and running of their properties, let alone any wider estate management. There are antisocial tenants in private rented properties creating misery for neighbours, behaving in a way that in affordable properties we simply won’t and don’t tolerate. There are buy-to-lets in new mixed developments that are being rented back to local authorities and housing associations, creating the very concentrations of mono-tenure and single-income housing that we have deliberately tried to prevent.

In extreme cases, communities are being hollowed out by new empty properties. In our present circumstances of housing shortages and acute need, this practice is unacceptable. It also has real detrimental effects for existing households, undermining the potential to create a real sense of community or develop important social capital.

Fortunately, there are ways to halt this, such as introducing restrictive covenants, community ownership of shared areas, the early appointment of neighbourhood managers, and dowries for the maintenance of public spaces. We need to use all of these and more as circumstances require.

I believe that there is an expanding role for housing associations and the best private managers in promoting and leading on community management – working closely with local authorities, police, landlords and residents in order to set up and provide neighbourhood-wide management services. It makes sense in more ways than one – not only does it make communities safer and more desirable places to live in, but it also protects landlords’ investments and assets.

We have worked hard, and continue to work hard, to bring affordable homes up to a decent standard. Following the Spending Review, we will no doubt continue to provide greater numbers of new homes. All to the good, but it is now time for us all to think harder about how we create, support and maintain decent communities. As for me, it is time to put words into practice at the sharp end.