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Could Corbyn Be Planning His Own Estate Agency?


Could Corbyn Be Planning His Own Estate Agency?

It’s hard to think of a time in recent history where the face of British politics was such an unmitigated mess. May’s imminent departure is highly unlikely to serve as a catalyst for stability anytime soon. Understandably, there are many who blame the Tories squarely and exclusively with the vast majority of issues the UK is facing right now.

One of which being the Brexit saga – the other being the UK’s on-going housing crisis.

In the case of the latter, we’ve long-since entered an era where home ownership – even sensible rentals – are completely inaccessible for an entire generation. Things have been heading this way for a while, but a complete lack of decisive action on the part of the Conservatives has been cited as a key contributor.

The question being – is there anything that can be done to steer things in the right direction? Should Labour take control at the next (and now-inevitable general election), how will Jeremy Corbyn attempt to succeed where his predecessor failed?

A New State-Backed Estate Agency

It’s no secret that whispers in Westminster and even political promises are about as reliable as a plumber’s estimate. Nevertheless, there’s growing speculation that a Corbyn government could introduce the UK’s first ever state-backed national estate agency.

The idea was first mentioned a while back by Owen Jones in his Guardian column, though has popped up once or twice again in more recent discussions.

In his column, Owen Jones stated quite clearly that “Estate agents are justifiably bogeymen for Generation Rent: why not set up a national, state-backed estate agency that works on a not-for-profit basis purely to help tenants?”

The idea is that should a state-backed estate agency plan go ahead, it would effectively serve as an enormous non-profit letting service for tenants across the country. The obvious issue with for-profit estate agents is their tendency to focus more on making money than the best interests of their clients.

An admirable idea, but with two fundamental flaws, nonetheless. Along with the problem of funding and staffing the new nationwide agency, there’s the small matter of attracting landlords in sufficient numbers. 

Presumably, a state-backed estate agency operating purely for the benefit of tenants would be completely unwilling to accept extortionate monthly rental prices and OTT deposits. Strict rules would be imposed to ensure that the tenant gained access to a good deal at a fair price.

From the landlord’s perspective, this could simply amount to lost earnings. If they can just as easily advertise their property privately for a much higher price and under their own terms, that’s probably what they’ll do. Hence, the idea of a state-backed estate agency has been interpreted by most as wishful thinking.

Important acknowledgement of the problem, but an imperfect and unworkable solution nonetheless.

Disappearing Inventory

To be frank, if there’s one thing the government (Labour or Conservative) should be doing to combat the housing crisis, it’s to build, build and build some more. Right now, the UK remains stuck within a period of record-low housebuilding – the lowest levels recorded during peacetime. Labour has already pledged its commitment to imposing an inflation cap on rent rises, but this doesn’t solve the problem out there simply being too few properties available.

It could also be useful to authorise local authorities to impose their own controls over excessive rent prices, but this is yet to be considered (or even mentioned) in Westminster.

In the meantime, there’s no realistic quick-fix solution out there to the UK’s on-going housing crisis. Irrespective of who takes the torch from May, chances are things will only deteriorate further – at least until the seemingly endless Brexit fiasco reaches some kind of conclusion.

Last Updated: Jun 4, 2019 @ 3:28 pm
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UK Property Finance is Authorised by The Financial Conduct Authority (FCA)

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