The decline of the private rented sector has been one of the most consistent features of the twentieth century - Explain the trend and discuss the prospects for attempts to resurrect this sector.
The decline of the private rented sector has been one of the most consistent features of the twentieth century. Explain the trend and discuss the prospects for attempts to resurrect this sector.
One of the most obvious changes in British housing in the twentieth century has been the decline of the private rented sector. Before the First World War private landlords controlled the majority of rented accommodation in both Scotland and Britain. From 1914 to the present day both their physical stock and their share of the rental market have been in continual decline. This has been particularly sharp since 1945. The decline has been attributed to rent controls, the increase in better investment opportunities elsewhere and the growth of owner occupation and council renting. In recent times there have been a number of attempts to resurrect this sector.
In the late nineteenth and early twentieth centuries the housing stock was overwhelmingly in the hands of private landlords. This sector accounted for 7.1m dwellings or 90% of the total housing stock in England and Wales in 1914. At the same time owner occupation accounted for no more than 10% and council renting around 1% of the housing stock in Britain (Daunton, 1987). By 1975, however, the number of private rented sector dwellings had fallen to 2.9m or 16% of the stock, a net loss of 4.2m (DOE, 1977). More recently, the size of the sector has fallen further to 7.7% of the stock in England and Wales (Malpass and Murie, 1990) and 5.9% of the stock in Scotland. (SDD, 1988)
The causes of the decline are well documented. (Kemp, 1980: Gibb, 1990) The imposition of legislation, to control rent and give security of tenure, has been seen as the main cause. They were first introduced to prevent private sector landlords from taking advantage of a housing Brief introduction. Nevertheless gives outline of content and order of what is to be discussed later. Outlines decline (Note frequent references because facts taken from other writers.) shortage that developed during the First World War in areas of munitions production. Some landlords exploited the situation by raising rents and justified their actions by claiming that they were off-setting higher rates of interest on borrowed capital. This created resentment amongst working class tenants and a wave of rent strikes took place throughout the country. This forced the State, which until then had showed no signs of intervening, to pass emergency legislation at the end of 1915 to control rent levels. The Increase in Rent and Mortgage Interest (War Restrictions) Act (1915) fixed most rents at the level of August 1914. The effect of this was to reduce the flow of investment into housing because it reduced a landlord's rate of return on capital. No private landlord would continue investing in an unprofitable market. After the war, and for the next twenty years or so, rent controls were removed in stages and then, just as the economics of private renting were becoming more attractive to landlords again, the Second World War broke out and rent controls were re-introduced. The experience of twenty years previously was then repeated.