After a series of Labour reforms through the years immediately following the end of WWII, the time had come for the Conservatives to get their foot in the door and squeeze open the floodgates that had been keeping a cap on rents round the country.
The Rent Act of 1957 was designed to put the bite back into Landlording. It introduced a system of decontrol whereby a new formula was concocted for historic tenancies and no new tenancies would be subject to control. The idea was to revive the PRS which for years had been in steep decline. Rents would now be allowed to edge closer to what we talk about as their ‘market rate’ through revaluation.
As you can imagine, this was welcomed by landlords, and certain benefits were indeed felt across the board such as the ability to easily transfer tenancy (so long as all were in agreement). Not so welcome, however, by some tenants. For those not receiving National Assistance, for instance, sharp rent increases were paid for out of their own pocket. Indeed, for tenants with precarious finances or in valuable properties, the changes were felt as a loss of security. So much so, that many tenants reluctantly joined the owner-occupation club to keep well away from the housing battlefield. As such, private landlordism did not quite experience the revitalisation that had been forecasted. Affordability still lay at the bottom line.
One such figure that cannot be credited with helping the industry’s PR campaign was Peter Rachman. For a time, Rachman was the nation’s public enemy #1 and came to stand for all that was holding back the PRS from maturing. Far from the jumpstarting a new generation of buy-to-let property owners, all that he managed to resuscitate was the image of the unscrupulous, Dickensian landlord. Rachman was famed for exploiting the recent deregulation to overcharge Caribbean immigrants in overcrowded slum-housing and forcing unprotected tenants out of their homes when it suited profits. Moving into property development and dabbling in brothel-keeping along the way, Rachman built up an extensive portfolio of assets over the course of his career. His cutthroat tactics along the way earned him the progeny of the term “Rachmanism”, the dictionary entry for which reads ‘the exploitation and intimidation of tenants by unscrupulous landlords.’ So no one’s favourite bloke, really.
Despite the fact that the legislation had certainly abided by many of the principles we think of as the basis for kickstarting a market, the reality is, it was still some time before the PRS got fully underway again. The arguments for and against rent control and deregulation abound, and the period teased some of these out and put them into play. Some argued that lifting caps would only incentivise the worst practices in the business whilst others saw the initial issues as merely growing pains, and that fundamentally the only thing that would keep rents down was increasing supply: building more homes. As we know, the debate rages on. And now you know where it came from!