![Private landlords breathe a sigh of relief](https://www.propertyforum.com/wp-content/uploads/2016/11/service-group.png)
If we look back to the 1980s there is no doubt this was a major turning point for the UK housing market. The Conservative government of the day introduced the right to buy policy for council house tenants which saw many take up their option at a significant discount to market value. Even those with deep rooted socialist beliefs were tempted to take up the offer of a right to buy which would ensure they had a stake in the growing UK property market and a secure home. However, whether or not Margaret Thatcher expected the right to buy policy to continue years after she left office, it has had a major impact upon the UK property market.
Shortage of social housing
There is no doubt that a shortage of social housing has had a major impact upon the UK property market and the buy to let sector in particular. While today we have social housing projects/housing associations, many of them receive funding direct from local authorities and the UK government. This funding from the authorities is used to raise additional capital but even then there is still a significant shortage of social housing across the country.
The Labour government in waiting, led by Jeremy Corbyn, has spoken in positive terms about increasing social/council housing across the country but has been very quiet on how this will be financed. The fact is that the rising cost of public services in the UK, ongoing austerity and concerns that the UK general public will not accept significant tax rises do not bode well for the future.
Private rental properties
In areas of the UK where there is limited social housing we have seen a significant increase in the billions of pounds in housing benefit paid to private landlords. Even though various governments have attempted to tackle this issue, at the end of the day there is insufficient social housing and people need to live somewhere. So, for many local authorities the only option is private rental properties which on the whole are more expensive than social housing accommodation.
It is not difficult to see where the major issues arise, as the number of people looking to rent homes continues to grow, the buy to let market has become very popular. The government has attempted to increase its take from the buy to let market, both directly in the indirectly, with various taxes and new regulations. However, under the bluster and criticism of buy to let investors, all politicians realise they are effectively at the beck and call of the buy to let market.
Squeezing property prices higher
Even though buy to let investments are not as lucrative today as they have been, the likes of HMOs have now stepped in with exceptionally high rental yields available. The increase in buy to let investment over the last 20 years, the trend towards HMOs and the need for more social housing has pushed house prices to unsustainable levels. In what is effectively a self-fulfilling prophecy, as houses become less affordable to the masses, families are forced into private rental which encourages more investment in private housing, squeezing prices higher.
In order to secure an acceptable return on the long-term trend of house price increases, landlords need to increase rent which places more pressure on the state. As more and more money is thrown into the housing benefit abyss this leaves less and less money to invest in long-term council owned/part owned social housing. Some people suggest that we are past the point of no return when it comes to affordable housing in the UK…..