Another tale of structural inequality?

Housing policy has created and amplified structural inequality

Despite the conclusions of the Sewell report, racial discrimination has been evident in the housing market for more than a century.4 It has limited the choices available to those who migrated from the New Commonwealth and elsewhere after the second world war, forcing them either to buy houses using mortgage clubs and other collective ways of raising funds or to rent in specific districts of the cities they settled in.5 The focus of post-war governments on building to replace war-damaged housing and then on slum clearance meant that there was little space for those local authorities that wanted to address the housing needs of post-war migrant communities. Their priority was to clear slums and build enough housing to cater for the population housed in them.

The 1957 Conservative government removed the rent freeze, which had been in place since 1939, arguing that it had led to disinvestment in the housing stock owned by private landlords, articulating the ambition to create a property-owning democracy. The policy has become associated with ‘Rachmanism’: a process of intimidation and illegal eviction to remove existing tenants and replace them with those who would pay higher rates. While often described through reference to the worst offenders, this practice was more widespread than a few rogue landlords, enabled by a change in laws on rent control and security of tenure.6

The property-owning democracy was reinvigorated by the introduction of the right to buy council housing at a substantial discount in 1980. Since 1980, more than a third of the council housing stock has been bought, representing two-and-a-half million homes. Subsequent evidence suggests that many of these homes are now part of the private rented sector. In 1988, rent controls were removed and tenancy protection was reduced substantially, creating the private rented sector environment that we now live in.

The 2000s then saw increasingly restrictive immigration controls extended to all migrants. As immigration controls arising from Brexit begin to kick in, those from the EU who used to have the right to live and work in the UK will increasingly be incorporated in these controls. An important thing to recognise here is that the discourse around immigration and the hostility to migrants have been translated to discriminatory practices. While the law says that those with specific citizenship statuses do not have the right to housing, local housing providers have developed local rationales for exclusion and treated some as not entitled because of the assumption they are not entitled.9 The Right to Rent was included in the 2014 Immigration Act that required private rented sector landlords to check the citizenship status of potential tenants. While it has been overturned by the courts, it is likely to be back in a similar form covering EU residents as well.

The charity Friends, Families and Travellers demonstrates that the Police, Crime, Sentencing and Courts Bill proposal to criminalise unauthorised encampments will further erode the rights and wellbeing of Gypsies and Travellers.12

Covid-19 policy threatens to repeat history and enhance structural inequality

In light of the Covid-19 pandemic, there have been temporary interventions to offer some protection to those who are struggling to stay in their homes. However, they have disproportionately favoured landlords and homeowners, enhancing the historic inequality of housing policy that has discriminated against those in rented accommodation since the 1980s. The effects of structural racism mean that people from minority ethnic backgrounds experience worse housing conditions and are more likely to be renting.

Those who own their homes with a mortgage have been able to apply for a six-month mortgage holiday – this includes both homeowners and landlords. There was also a promise of no evictions from rental properties. But in a rule change earlier this year, evictions of those with more than six months’ arrears have been allowed and the London Renters Union is currently fighting cases in the courts. The ‘Everyone In’ programme provided accommodation for those who were street homeless in hotel accommodation. Probably the biggest cost has been the stamp duty holiday, which redistributes money to those who can afford to buy their homes, including landlords acquiring buy-to-let houses.

A consequence of the loss of or reduction in work as a result of the pandemic is increased levels of debt. Overall, around 6 per cent of households were in arrears with their housing payments based on the Understanding Society survey carried out between May to December 2020.13 Those born outside the UK were twice as likely to be in housing arrears compared to those born within the UK. Single parents and other households with dependent children were twice as likely to be in housing arrears compared to couples. Social housing tenants were three times as likely to be in housing arrears compared to owners with a mortgage and twice as likely as private renters. Figure 1 shows that the starkest evidence of inequality is by race, with a quarter of Bangladeshi people and a fifth of Pakistanis and Black Africans in housing arrears.

Similar patterns emerge when looking at people who are behind with bill payments. Overall, around 5 per cent of the respondents were behind with bill payments. More than twice as many people born outside the UK were behind with bill payments compared with those born within the UK. Meanwhile, 17 per cent of single parents with dependent children, 21 per cent of people in social housing and 11 per cent of private rented tenants were behind with bill payments. Figure 3 shows that, again, race has a significant effect, with more than 20 per cent of Black Africans, Bangladeshis and Pakistanis behind with bill payments. Current policy interventions do little to address this unequal distribution of pandemic-inflicted precariousness.

More than a quarter of respondents to the Understanding Society survey said that they intended to move. The majority of these (66 per cent) were going to move to improve their housing situation, to downsize or to form a new household, while 30 per cent cited other reasons. The remaining 4 per cent cited the end of their tenancy or eviction. Five times as many lone parents with dependent children intended to move because of the end of their tenancy or eviction compared to couples with dependent children. Twice as many members of other households intended to move because of the end of their tenancy or eviction compared to single people or couples without children. Ten times as many in the private rented sector and nearly three times as many in social housing also intended to move because of the end of their tenancy or eviction compared to those who owned with a mortgage. There was little difference between those born in the UK and those born abroad, but Black Caribbean, Bangladeshi, White other and mixed ethnic groups were two to three times more likely to intend to move because of the end of tenancy or eviction.¹¹

House sales dipped significantly between February and August 2020, suggesting that if previous years’ patterns were to be repeated, 170,000 house sales would be expected, to catch up with demand. This figure is likely to be inflated by the demand arising from the suspension of stamp duty. At the same time, private rents increased by around 1.5 per cent, with the lowest rates in London and the highest in the South West and the East Midlands.14

The number of households presenting as statutory homeless follows historical patterns. Figure 5 raises questions about racial inequality in this regard, with nearly seven times as many mixed white and Black Caribbean people and five times as many Black Africans presenting as homeless than would be expected from comparison with population forecasts. We have no measure of the different housing needs by race but would expect them to vary by age and household circumstances, suggesting the need for further research.

Eviction claims reduced significantly across all tenures during the Covid pandemic. Early signs of increasing claims to the county courts for those in private rented and social housing are evident in the fourth quarter of 202015. There is likely to be an acceleration due to increasing arrears and the lifting of the temporary protections for eviction in May.

Conclusion

Housing policies and the behaviour of the housing market have consistently created structural inequalities. The temporary interventions to address issues raised by the Covid-19 pandemic have favoured homeowners and landlords more than tenants. They are likely to be followed by an acceleration in sales and evictions affecting those in most need.

For those who can make the choice to move to places with gardens and more space, the added incentive of the stamp duty holiday seems likely to lead to a significant number of moves. These may in turn trigger the displacement of existing residents and the reduction of housing choices for their families as market demand increases the prices of suburban and rural housing. For those who cannot afford to move, the spectre of overcrowded, unsafe and insecure accommodation looms large.