Rental reform must be proportionate

The rental market has changed radically in the last decade, but penalising private landlords is not the answer, says Trevor Cooper.

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RENTING social housing is a fundamental right in Guernsey, whereas the private rental market is a business in the same way that the Guernsey Housing Association works towards spanning the two sectors. Having floundered on the first context, the States is now levelling blame and political pressure upon the second and outsourcing its constitutional responsibilities onto the third.

Not content with that, the States last week announced its intention to invite social housing and GHA tenants who aspire to own their own home to purchase the houses they occupy at discounted prices, putting even more public money into private hands and further reducing the island’s stock of rental properties.

Some deputies are overly sensitive about States bashing and it’s fair to say that the present assembly is stuck with a housing problem that has been many years in the making. The same can be said about the virtual witch-hunts against rogue landlords in the private sector, but don’t point those pitchforks at all residential landlords. There are some, certainly not all, who take advantage of a strong rental market and that’s their prerogative. They are in a business led by market forces that a little more than 10 years ago suffered an excess of properties and a shortage of tenants who could pick and choose where to live and negotiate the rent they paid.

So why have market conditions changed so radically in such a short time?

It’s widely blamed on an insufficient number of new houses being built, and yet Guernsey’s population was 59,807 in 2001, according to that year’s census, and rose to 63,155 by 2020, an increase of 3,348. The following year, GHA celebrated having constructed 1,000 dwellings over the same period. Assuming that the private building sector was equally proficient suggests that the increase in population should have been adequately provided for, based on an average ratio of two persons per dwelling and allowing for the existing housing need at the turn of the century and the typical loss of rundown properties in the process.

Nonetheless, there should have been more development and redevelopment. I’ve written before about Guernsey’s lost decade when the housing market was slack and local builders were desperate for work. The States could have negotiated reasonable housebuilding contracts that went towards paying wages that subsequently fed back into the economy. Instead of which, our present representatives were queuing up last week with get-out-of-jail plans that will take years to complete in the most competitive housebuilding market seen in decades.

Admittedly, the phenomenal acceleration in today’s housing market has taken every developed town, city and country by surprise. On the other hand, housing shortages are not new and our government’s policies of intensified increases in population without a strategic housebuilding programme speaks for itself. Relaxing accommodation restrictions for high-earning non-local housing licence holders has also impacted badly on the lower echelons of the market.

Aside from governmental gaffes, there have been seismic changes in rental market trends that have also had a profound effect on the present state of affairs. The rental market has become transient during the past 20 years due chiefly to the financial crash of the late noughties. Tenants no longer wanted three- or five-year tenancies that were once standard. Tenures of 12 months swiftly became the norm, especially during the cataclysmic credit crunch when those employed all the way up to management level didn’t know if they would even have a job in 12 months’ time. Landlords loathed the rapid turnover of tenants, incurring additional costs and often enduring vacant weeks or months devoid of rental income.

Yet anyone in business knows there are peaks and troughs and those market conditions began to ease in the same way that these torturous market conditions will subside. They have in the past and will continue to come and go in the future.

By 2012 industry professionals were reporting upward trends and rental prices reaching a new high, as first-time buyers struggled to get on the property ladder. The writing was on the wall, so to speak.

And yet the trend for 12-month tenancies was imbedded in tenants. Any suggestion of longer tenures by landlords or estate agents was dismissed as flimflam because tenants liked the control and flexibility allowed them under minimum-length tenancies. This mindset remains today but market conditions have radically changed and landlords now hold the control and flexibility. It’s one of those unintended consequences which, to quote the author, journalist and political commentator Will Self, seem increasingly to define our modern political, social and environmental reality.

Reports locally of escalating rents and poor accommodation regularly make the headlines yet genuine cases of misappropriation by Guernsey landlords are notably rare considering there are 6,812 privately rented homes in the island, according to the 2021 Guernsey Residential Property Stock Bulletin. This is actually 156 fewer than two years previously, thereby worsening the squeeze at a time when every roof over a household in need is vital.

Which makes the States’ intended offensive against private sector residential landlords vexatious and proposed legislation to unearth Guernsey’s few true rogue landlords wholly disproportionate. As such, I regret and give my apologies for not being available as originally intended to speak personally at the Guernsey Residential Landlords’ Association’s AGM at Les Cotils tomorrow evening.

The association was formed in 2006 to unify and help improve the standard of local letting accommodation under the sponsorship of what was then the States Housing Department led by the late deputy Dave Jones.

It’s a not-for-profit body that currently has more than 280 members and 11 associate letting-agent members owning or managing more than 2,000 units of rental accommodation. Its council members are volunteers with immense experience who have latterly extended their remit to inform and raise awareness among tenants and support groups.

As an honorary member and past secretary, I have seen the association work behind the scenes in constructive consultation with mainstay States departments and Citizens Advice Guernsey, and urge today’s various States committees to think rationally and not impose disproportionate and possibly counterproductive punitive measures against landlords should it persuade any of them to sell-up at the next available opportunity while the freehold market is buoyant and alternative forms of investment begin to look more attractive.

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