There’s not much point raising wages if rents keep rising too

THE last time I wrote about in-work poverty, I alluded to the “food bank nurse” who had appeared on Question Time taking Nicola Sturgeon to task about public-sector pay. It’s fair to say few readers were interested in reading about high rent and hefty childcare bills in that particular context.

So let me tell you about Linda instead. Linda lives on the border of London and Essex, in a two-bedroom privately rented flat. She pays £950 a month for the privilege. She is 66 years old, and she has three jobs. She is, as they say, “just about managing”.

Linda is perhaps the kind of person Labour and the SNP have in mind when their MPs stand up in Westminster and call for action on slow wage growth. Theresa May has her answer ready: the Tories have already increased the tax-free allowance and the minimum wage, she says, and their policies have created jobs.

But with the cost of living spiralling, and the Joseph Rowntree Trust this week warning more and more UK households are slipping into poverty, it’s clear many workers aren’t managing at all. The problem is that increasing wages might not actually put more money into their pockets.

Linda told BBC film-makers her pay had increased by £40 per month over the last two years. Not bad, you might think … until she mentioned that her rent had increased by £100 per month during the same period. Linda featured on the first episode of The Week The Landlords Moved In, a series in the same vein as Wife Swap but with a key difference: while the cameras followed landlords moving into their own rental properties, the tenants didn’t get a taste of the high life in return. Instead, they had to make do with serviced apartments, which were swish compared to what they were used to but not a patch on the mansions their overlords – sorry, landlords – called home. This unequal arrangement set the tone for an expertly edited hour of alternative-reality TV, which concluded with the unveiling of shrewd investments dressed up as charitable giving.

There was some drama along the way. We met father and son Peter and Marc, who were raking in tens of thousands of pounds per month letting out their portfolio of properties. When the pair visited Linda’s flat and found it in disrepair and covered in mould, Marc was appalled to see how she was living. Peter, by contrast, was appalled to see how she had treated his investment. Therein lies the central problem with the private rental sector: landlords dealing in “units”, not the human beings who live in them.

Scottish housing policy is a step ahead of England’s when it comes to so-called “retaliatory eviction”, the threat of which can scare tenants off reporting problems with their homes. The Private Housing (Tenancies) (Scotland) Act 2016 removes the “no-fault” ground for possession, and has been hailed by homelessness charity Crisis as facilitating the most secure private tenancies in the UK. However, Govan Law Centre has warned that landlords will still find ways around the law, and eviction isn’t the only threat facing tenants: they also have to watch out for rent increases. When Peter and Marc got a man in to investigate Linda’s mould problem, it turned out there was no quick-fix solution.

The only way for Linda to keep the mould at bay in the long term was to keep her heating on – and in the process run up fuel bills she couldn’t afford to pay. While Peter muttered irritably about a rotting cabinet in the kitchen, Marc popped down to the local estate agent to find out what yield they could achieve if they spruced things up. The answer was £1200 per month, compared to the current £950.

In a surprise twist, the beneficent pair installed a new kitchen and bathroom and fixed Linda’s rent for two years. They then ordered her to keep the heating on, saying they’d help out with the bills if required.

I wonder if she got that in writing.

Perhaps Linda will live happily ever after (or as happy as she can be while extending a begging bowl every quarter), but there are thousands more Lindas all over the UK living at the mercy of landlords whose priority is profit, not people. And as long as the housing crisis continues, government intervention to raise wages risks simply funneling more money to those who already have plenty.

Increasing wages must, therefore, be accompanied by the building of homes. Not just by private developers who will squeeze as many “units” as possible onto each scrap of land, using commercial viability arguments to get around council planning requirements. Not just the building of affordable rented housing as an “add-on” to collection of flats that must surely, by definition, be unaffordable.

The government cannot sit on its hands and blame market forces for the plight of those citizens who will never get on the property ladder (and quite possibly don’t want to either). It doesn’t take an economics degree to see this is a problem of supply and demand to which building is the solution. If moves such as empowering councils to borrow for building cause a few buy-to-let empires to crumble, so be it. The landlords who have been lining their pockets with other people’s hard-earned wages will just have to go and get jobs themselves.

A version of this article first appeared in The National.

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