New Housing Format Needed
Part of the UK problem lies in the failure to develop an acceptable format for new rented housing. In this, we stand out in dramatic contrast to all other Continental countries. Owner-occupation has been the runaway success of our society, with Governments over generations favouring the building society movement. And at the very top of the market, particularly in London, there is a strong new-build rented market. But that's all. Council housing is now finished, politically and socially. And the present wave of stock transfers to the housing association sector will change little, in that it will not generate any new stimulus to the new-build rented housing sector, in the middle-income bands. Social landlords, and housing authorities, will remain at the core of the managed public sector, the one formal
and the other informal. That sector will remain (at least in class-ridden England) an institution of low social status. The question is how can we get a market sector going, where new self-generating business initiatives occur? The Condominium could be the answer. My suggestion is that, under the Industrial & Provident Society legislation, developers and other investors could form new condominiums which would be occupied on short-term unprotected tenancies, at rents adjusted to a fixed proportion of tenants' income. The IPS would have shares and would be subject to landlord's ownership rights in the ordinary way; some might operate as subsidiaries of the major housebuilders. Every tenant household would be asked to pay, in return for the right-to-occupy, a fixed percentage (say, 20%) of the household's post-tax income - and would be contractually required to disclose IR figures or certified accounts. Rent would be adjusted for Year Two only on the basis of
certified income in Year One, and there would be no retrospective adjustment. There would be a low
contractual minimum, to mesh with the statutory system, in the event of
unemployment.
An income-stream of this kind, which would not be open to the
coercive intervention of any rental tribunal, would be more buoyant that
conventional rents, and would also offer the tenant a buffer against
unemployment and other sudden changes of circumstance. My belief is that,
properly managed, a Condominium formula could
develop a cooperative style of tenant participation, offering a genuine
alternative to other tenures.
Would that be enough to "make a market" in new-build rented
accommodation? Would it work outside London? Would it work for both flats and
houses? Would it be possible to generate a sufficient sense of common interest to enable the system to work? Is the idea a starter?
Let me know what you think.
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