How to stop landlords profiting from homelessness? Compulsory purchase

Although most of today’s headlines are taken up by the fact that Brexit has descended into the political equivalent of a skip being set on fire, it’s important to remember that this government has been diligently trashing the country in other ways too.

Related: London councils pay landlords £14m in 'incentives' to house homeless people

To wit: the Guardian carried a story this morning revealing that London councils have been paying more than £14m a year simply to persuade private landlords to house homeless people. This has been caused in part by the right-to-buy scheme introduced during the Thatcher government, which gave tenants the right to buy their council houses.

By 2017, four in 10 of these homes were owned by private landlords, who charged more than twice the rent of local authorities. According to today’s report, Barking and Dagenham council has “lost 48,500 council homes under right-to-buy policies and now spends more than £800,000 a year renting back sold-off properties”. Then there’s homelessness. By January 2018, homelessness charities were reporting a 169% increase in homelessness since 2010. Surely mere coincidence that 2010 was the year that saw a Conservative-led government introduce significant cuts to public spending.

Councils now find themselves in the perverse situation of competing with one another to curry favour with private landlords. Some London boroughs have even formed a body called Capital Letters, which allows them to avoid the situation where local authorities are being played off against one another by negotiating with landlords via collective bargaining.

This grotesque story is just one element of a wider national housing crisis, which has reached epic and absurd levels in the capital. Housing charities have rightly alighted on the gradual depletion of social housing as the cause of this intolerable situation, and have urged governments – both local and national – to build more social housing and improve renters’ rights.

These are laudable demands, but why stop there? Building social housing will, in time, alter the housing market, increase demand and bring down housing costs. But it doesn’t send much of a signal to private landlords about their social responsibilities, and it doesn’t fix the problem for those suffering under the housing crisis in the here and now.

If there’s one thing that the past few weeks of news should have made clear, it’s that these are extraordinary times. And in extraordinary times, the range of political possibilities available to those in power is widened. So why not requisition private housing from landlords engaged in these unethical practices? Councils could conduct compulsory purchases of private landlords’ housing stock at market rates. It would save money in the long term, allow local authorities to have greater control over housing stock, provide housing for people who are homeless now, and send a strong message to landlords about what activities are and are not acceptable. When Jeremy Corbyn suggested requisitioning empty luxury housing for Grenfell survivors, the policy was remarkably popular. Perhaps the public would be similarly open to a plan to requisition property for the homeless.

Landlordism is a peculiarly British phenomenon. In many European countries, private properties are often rented out by large companies that own dozens of dwellings. In contrast, in 2010, 89% of all landlords in England were private individuals – of whom 85% owned between one and four properties, with nearly half owning just one. According to a PropertyWire report this year, more than nine in 10 landlords in England operate as private individuals, and most make nearly half their income from renting out accommodation. It’s not surprising, then, that so many landlords treat their properties as a cash cow, refusing to accept anything other than the most profitable of tenants and prioritising their personal income over the social necessity of housing.

This doesn’t make them evil, but it does suggest that urgent action needs to be taken to end the phenomenon of people making money simply because they own things, not because they do things – and that landlords themselves need some form of deterrent preventing them from engaging in damaging practices such as forcing councils into bidding wars so they will accept tenants. The market has been designed so that landlords can act in this way, but human beings designed the market, and we can redesign it in whichever way we like. Requisitioning properties from private landlords who refuse to rent to homeless people unless they’re bribed into it is perfectly possible, we just need to decide to do it.

Anyone who suggests that policies such as this are a terrible idea because they’d cause major disruption in the housing market should reread the opening of this article. Britain’s housing market is a basket case on par with Brexit – disruption is just what it needs.

• Ellie Mae O’Hagan is a journalist writing mainly for the Guardian. Her first book, on the sweeping changes in politics, will be published by 4th Estate in 2019