Lorne Street tenants protesting at City Chambers, Edinburgh November 2015
The American land and tax reformer, Henry George, observed in his book, Progress and Poverty, that “thirty thousand people have legal power to expel the whole population from five-sixths of the British Islands. The vast majority of the British people have no right whatsoever to their native land, except to walk the streets.”
The history of much of the world is a history of property, of the appropriation of territory and the framing of laws designed to protect the novel concept of private property. Those frozen out of this process – the poor and the landless – had to make do with belated concessions to protecting their rights – concessions that came too late for many as James Hunters’s new book on the Sutherland clearance, Set Adrift Upon the World, makes painfully clear. In the year of the Strathnaver Clearances in 1814, Sir John Sinclair, Caithness landowner and author of the first Statistical Account of Scotland ,observed that, “in no country in Europe are the rights or proprietors so well defined and so carefully protected.”
To be a landowner was to be endowed with economic, legal, social and economic power. On the basis that the primary responsibility of government was to defend the country, those who owned the country presumed to be best placed to monopolise the electoral franchise and undertake that task.
During the 18th and 19th century, fortunes were made through the ownership of urban land in particular. As cities expanded, demand for land enriched those fortunate enough to hold the title deeds to the fields and meadows that were acquired to build the houses, factories and infrastructure necessary to support a modern urban economy.
In Edinburgh, the street names reveal this history in Buccleuch Street, Hopetoun Crescent Roxburgh Terrace, and Moray Crescent. One of the beneficiaries of this legal dispensation was George Heriot, the Edinburgh jeweller, whose death in 1624 established the Heriot Trust which was run by the Provost, Baillies and Councillors of the City together with the Ministers of the town. It rapidly established a virtual monopoly on land around Edinburgh
“An exclusion zone was imposed upon Edinburgh by the activities of the Heriot Trust’s acquisitions” wrote urban historian, Professor Richard Roger. “Scarcely an acre in the neighbourhood came into the market which they did not instantly acquire for the benefit in perpetuity of Heriot’s Hospital”. By the end of the 19th century, the Trust owned over 1700 acres of land around the City. Much of this comprised land between Edinburgh and Leith.
Samuel Hunter’s timber yard in Leith, 1852. Lorne Street was built along the south.
One of those who held a feu from the Heriot Trust was Samuel Hunter, a stonemason and builder who owned a yard on Leith Walk at Smith Place. He ran a successful business as a property developer and builder and in 1879, was granted a further feu by the Heriot Trust to erect blocks of tenements at the western end of what is now Lorne Street.
When he died in 1893, his daughter Agnes Hunter inherited a substantial property portfolio including her own elegant house on Dalrymple Crescent in the Grange. Upon her death in 1954, her executors established the Agnes Hunter Trust which continues to own over 90 tenement flats in Lorne Street occupied by over 200 residents. The Trust is a charity and provides grants to health and social welfare projects.
The Trust established a reputation as a landlord that provided long-term secure tenancies. “We were promised a tenancy for life”, said one tenant. “Stay as long as you like”’, another was told. The Agnes Hunter tenants comprised a close-knit community of all ages. The oldest resident has lived there for 74 years, having moved in aged 2 years old. The younger children all attend Lorne Primary School adjacent to most of the tenement blocks.
But whilst tenants felt secure, their homes suffered from poor maintenance. Damp persisted for years in flats, waste water rose through bath and kitchen pipes, window frames rotted and repairs were ignored. Many tenants undertook work themselves, installing bathroom sinks and even a heating system. Some tenants began leaving and others were evicted. In July 2015 all 200 of the Trust’s tenants were informed by letter that “retention of The Agnes Hunter Trust’s property portfolio was no longer in the interests of the Trust” and all households were to be evicted by the end of the year.
A determined campaign by residents was launched and the Lorne Community Association secured a stay of execution until the end of January 2016. Following a petition to Edinburgh Council, this was extended to July 2016 in order to allow time to try and establish a housing co-operative or similar solution.
To the wider world, evictions on this scale came as something of a shock. Few knew anything about the Agnes Hunter Trust. I had some vague recollections of my own from 7 years spent living in a flat on Lorne Street but I forgot all about it until the story appeared in the newspapers.
At a time when the Scottish Parliament is, at long last, considering a Bill – the Private Sector (Tenancies) (Scotland) Bill – to modernise tenants rights and provide greater security of tenure, it is worth reflecting on what a shocking state of affairs these evictions represent. Most tenants are on Short assured tenancies. Despite the assurances of lifetime security, most tenants in law were never more than 2 months from eviction.
The short-assured tenancy was introduced in the 1988 Housing Act. The idea was that these tenancies would provide a landlord-friendly tenure for the private sector, allowing it to grow at the same time as Housing Associations were given the freedom to access private finance. The result has been the growth of one of the most unregulated, liberal and (from a tenant’s perspective) insecure rental markets in Europe. Britain’s obsession with homeownership has led to eye-watering levels of private debt, house prices outstripping earnings, a speculative volume housebuilding industry that profits from land value appreciation and consumers spending growing proportions of their income on housing costs.
Sometimes it takes a case like Lorne Street to focus minds on long-standing policy failures. The private rented sector has grown in a haphazard manner driven by buy-to-let landlords and little in the way of a strategic plan. A system where 200 tenants can be evicted on a whim reveals serious flaws in Scotland’s housing tenure. One of the most glaring question (which has, as yet, not been addressed) is quite simple.
Why should 100 families have to be evicted merely because the landlord wishes to sell their homes?
The short answer is, of course, because the law allows it. But this situation would never arise in, for example Germany. The fact that a pension fund might wish to sell its portfolio of flats in Hamburg to another investor does not mean that all the tenants have to be evicted. To the Germans such an idea would be ridiculous. Owning rental property is perfectly legitimate but if you sell it, tenants stay put in their homes. Tenants enjoy security of tenure and the landlord a regular return on their investment.
The complacency in addressing such fundamental questions was evident when the Chair of the Agnes Hunter Trust, Walter Thomson, spoke at the City of Edinburgh Council Petitions Committee on 5 November. In a statement that had tenants draw breath for its audacity and cold logic, he claimed that,
“The Trust is not in existence to provide housing.The properties are an asset which enables the Trust to make funding available for charitable causes. Miss Hunter’s trust has never been a social landlord.”
In other words, we have no responsibility to families we have housed for over 60 years. They are merely an asset to generate a revenue stream – this from the Chair of a Scottish charity which, among other things, funds homelessness projects.
Such attitudes are an indictment of 15 years of devolution. The Scottish Government’s Private Housing (Tenancies) (Scotland) Bill will have its final reading next Thursday 17 March. It introduces welcome changes to the private rented sector including a new tenancy that affords greater security for tenants. But, crucially, the wish to sell a tenanted property remains a lawful reason to evict a tenant. Whilst such a provision has a role in a transitional period, it will do nothing to contribute to the kind of long term security enjoyed by tenants in Germany.
Whilst crofting tenants, agricultural tenants and commercial tenants are lawfully entitled to remain in occupation of their crofts, farms and offices when the property is sold, people whose tenancy is their home are rendered homeless on the arbitrary whim of the owner. It is an antiquated state of affairs that has no place in a modern democracy.
As Tony Cain, the Policy Manager for the Association of Local Authority Chief Housing Officers observed recently,
The unstated, and unquestioned, view that underlies these provisions is that eviction and homelessness are appropriate management tools to address business failure or change.
These provisions ensure that private landlords or lenders can remove tenants when thing go wrong with the business or they want to disinvest. And most importantly, the value of the asset is protected by ensuring that it is linked directly the property values in owner occupation. It also means they can borrow more to invest and make bigger returns on capital values.
Equally importantly what they also do is transfer the cost (aside from the personal trauma and disruption to the tenant) on to the public sector.
By protecting the value of private rented houses in this way and transferring the risk and costs of business failure on to the tenant and local authorities, landlord and investors can be confident that they can sell out relatively quickly and at very little cost to them.
The Lorne Street tenants have been given until July 2016 to see whether they can devise a solution whereby they form a co-operative to take over ownership of perhaps persuade a housing association to step in. They deserve all the support we can provide.
Meanwhile MSPs should question whether it is right that folk who have lived in their homes for decades deserve to be treated as little more than collateral damage in pursuit of the owner’s short term interests. In particular, they should examine critically Schedule 3, Part 1 1(1) of the Private Housing (Tenancies) (Scotland) Bill – namely, “It is an eviction ground that the landlord intends to sell the let property”. If tenants are to feel secure in their homes, this provision should be removed.
Patrick Harvie MSP has tabled an amendment to remove this ground for eviction.
Scotland needs investment in a sustainable, high-quality, affordable rented sector. It needs to learn from successful countries such as Sweden and Germany. Above all, it needs to ensure that never again is a community treated with the contempt and arrogance faced by the families of Lorne Street.
Tenants should have security from eviction at all times and in all circumstances.
The ability evict at will ensures that a tenant can never invoke the paltry rights the law allows them on rent control or repairs.
Short term farm tenants or limited partnerships on a 12 month lease are little different.
Is it within the power of the Edinburgh parliament to make an effective change in tenancy law ?
Yes. Housing is devolved. The third last paragraph describes how effective change is not only within the Scottish Parliament’s power, but at its very fingertips. Ask your MSPs to support Patrick Harvie’s amendment.
Tony Cain has a responsible position but the outlook of a reptile. ‘Rent-seeking’ is indeed an existential threat to humanity. The hypocrisy of a charity causing homelessness in a grand scale ought to be from that other world through the looking glass. It is time to collect Annual Ground Rent (AGR), the value we all create collectively as we go about our daily lives.
Err. May I apologise to Tony Cain and declare the object of my scorn to be the above mentioned Walter Thomson…
Having been at the mercy of one of these “short assured ” tenancies and having had had it enacted upon us with 2 months to find a new home – (and having to be officially “homeless” for 20 months) I really sympathize with this group of families. Unless you’ve been at the raw end of these vile, poisonous policies – you really struggle to understand the repercussions. No wonder families end up in trauma!
Maggie: my sympathies are with you. I”ve seen the trauma inflicted by 6 -month Short ATs here in Blair Atholl and I’m very lucky, due to two sets of would- be landlords stabbing each other in the back, rather than remembering to give me a written tenancy agreement with 5 months and 28 days of entry, to have a full Statutory Assured Tenancy. Pity more people don’t have that kind of security, but landlords make sure that they are as rare as hens teeth.
Thanks for that Ron. Yes, the landlords know exactly what they are doing. In my own case, it certainly stuck in my throat when our “landlord” (who had not been interested until recently, and also owns many properties in South Kensington) , decided he needed our property to move some of his more ‘needed’ tenants away from his new stable block, but still needed them on the estate for work he required – and seeing as we had only been there about 8 years – he wasn’t doing anything illegal. !! It beggars belief that individuals have that kind of power over other people’s lives in this day and age.
It happened to me 6 months before I graduated university, I was forced to move across town into another rented flat, and then move again 6 months later when I found a job in Edinburgh after graduating (having studied in Glasgow). I had to max out several credit cards to afford the additional move as my financial situation was, like many students, an extremely delicate tightrope with only debt as a safety net. I’m still paying off the debt I took on in that period now, with money I should be using to save for the future.
The key words in this fascinating expose by Andy are ‘land value appreciation’ and what is written in paragraph 4. The underlying problem is quite literally underlying, ie LAND. or more specifically the accumulation of societally created Annual Ground Rents ( AGR) to the private landlords instead of the entirety of these being returned to society as public revenue, with the compensatory mechanism of no taxation of the income the landlord gets from the provision of the building/contents and no taxation or impost upon the physical property or improvements upon it. This is pure Adam Smith: making money legitimately from selling the best quality product or providing the best quality service ( in this case rented housing) at the keenest possible price–income tax free. If AGR was fully collected, then the balance between landlord and tenant would alter in favour of the tenant, inasmuch as landlords would have to compete against each other for tenants by providing the best quality housing at competitive prices, but on the other would reap the full economic benefit of so doing.
It’s worth reflecting that prior to the 1988 Act the PRS was in free fall with reduced supply of properties and poor quality. The 1988 Act made the position more attractive to landlords with the result of a significant increase in supply and a similar increase in quality. I won’t argue that the system is perfect and that there aren’t examples of poor practice or unfeeling decisions by a minority of landlords. However those problems are not the norm and trying to address every bad case may have more negatives than positives. The measure proposed by Patrick Harvie would be highly likely to lead to an increase in evictions in the short term as small scale landlords seek to sell their properties whilst they are able and a reduction in investment in the sector. Reduced supply leads to increased rents etc. As a short term solution I suggest the community land fund considers becoming a residential landlord. It won’t like the economic returns but in the absence of a private or institutional investor it may resolve the problem.
Another drip of project fear , Andrew ?.
What is wrong with paying tax on an asset which has increased in value ? .
Nothing whatever. It’s called Capital Gains Tax.
Hector states that “Tenants should have security from eviction at all times and in all circumstances.” In theory a good idea but the consequence of that is that the majority of landlords would not rent property. Why should a tenant be able to damage/ destroy the rented property, and / or not pay their rent for example but still have a secure tenancy? That is the consequence of Hector’s statement if it were law.
Andrew’s suggestion seems sensible as an interim measure what do others think?
Clearly if a tenant does not pay rent or destroys the property, they can and should be evicted.
But landlords should refrain from using that as an excuse to evict anyone they choose.
Rent controls were voted for today at the SNP conference, so non payment of rent will become less of an issue.
Together with security of tenure, rent control will drive landlords out of the market and let first time buyers get in, after all, if landlords wont let their houses, what will they do with them?
Is the landlord going to sleep in several houses ? .
Some people either can’t buy or don’t wish to. If you reduce the supply by discouraging landlords then rents will rise on a shortage of property and investment will fall. It’s not project fear to point this out – it’s stating the obvious.
Most if not all people would like to own their own home . Unfortunately some people own more than one home therefore denying others the opportunity . Those who own more than one home create a shortage , inflate house prices which generates capital appreciation as well as high rents .
Your first sentence may be largely correct, though not wholly, but the reason a good many can’t buy or don’t wish to at a point in time is not wholly, or even largely, down to some owning more than one. Your ignoring the personal financial circumstances of some who would not be able to buy even if homes were cheaper. Your ignoring those who want a home only for the short term. You’re ignoring our disfunctional planning and development system which singularly fails to deliver sufficient new housing each year thus adding to price pressure. Multiple home ownership plays some role in price pressure but only some and it’s necessary anyway. The UK and Scottish governments have both taken recent steps to affect the attractiveness of buy to let’s for smaller scale landlords through SDLT / LBTT and changes to interest relief. Steps are being taken but real change in housing opportunity will come from providing more of them and on that front little is being done to facilitate that.
Sounds like Andrew ( Estate Factor of Moray Estates ) is wanting to sell land for housing to the highest bidder .
Trying to do our bit to increase supply.
“The history of much of the world is a history of property, of the appropriation of territory and the framing of laws designed to protect the novel concept of private property.”
It cannot be both “novel” and a “history of much of the world”. People aspire to owning or having a strong stake in their own property. I have not spoken to anyone, including Green voters who are not delighted to be given the opportunity to own their own property. There are no more fierce defenders of private property than small independent owners. See the Protestant workers in Northern Ireland with their little 2 up 2 down houses. Or the Landless Peasants who gained land in the Soviet Union and were persecuted mercilessly when it was realised that they suddenly became very aspirational and conservative!
But even Stalin shrank from turning the peasants out of their homes and little allotments.
Not so the brits!
Wasn’t like Stalin to shrink from anything!
What about collectivisation? They may have been left with a few square metres for subsistence but it was hardly what you’d call generous.
Collectivisation in russia was brutal , but the people got to keep their homes and a cow and perhaps a half acre each.
Very generous compared to the duke of sutherland et al.
Discouraging landlords does not reduce supply of homes.
It may reduce the supply of rented homes, but will increase the supply of owned homes, so no NET effect.
A worryingly high proportion of new homes are being bought by landlords, so no wonder mr howard favours more housebuilding.
If homes were really homes and not financial instruments, we would not be in this mess.
Reducing the supply of rented homes is a major problem for those who wish to / can only rent. Reduced house prices will help some current tenants but not all becuase not all tenants are tenants because of house prices. You still need a sensible PRS. Reducing the attractiveness of the PRS to investors is not going to help tenants in the round becuase it will reduce supply.
As houses aren’t bought and kept empty in the UK it’s clear housing shortage isn’t linked to empty investment homes [holiday homes aside – are you planning to ban those?]. That’s a tenure mix issue. Rising population and reducing household size mean we’re under building by a long way a fact understood by both the UK and Scottish administrations.
Many houses ARE bought and kept empty.
While driving through perthshire today i lost count of the derelict cottages/ farmhouses/steadings which estates have allowed to deteriorate to ruin. Lots of derelict land too.
They should be sold off by order of a court to people who would live in them after renovation
A sensible Public rented sector would 5 % of the housing stock, not the 30% and growing that we see today.
Holiday homes should be taxed heavily and should have to seek council approval to convert from residential use.
Interestingly in Europe it seems to be Britain that is obsessed with home ownership; could the be a legacy of the Thatcher years?
In France and Germany the vast majority look for affordable rented accommodation of which there is a supply both public and private.
Not everyone wants to buy and those who do not need security of tenure be it public or private. Maybe it’s time to look at how other countries have done it and adopt what is successful from them.
Home ownership is a good bit lower in Germany, rising in France and high in Scandanavia in the latter area tending to be accompanied by very high levels of personal debt. I think, more so than here. Whilst I think it’s perfectly reasonable to have a look what works elsewhere it can be difficult to transfer to other nations given the differences in other interlinked areas such as planning, development, housing supply, debt availability / regulation and culture. As an example institutional ownership of residential property is common in Germany yet despite encouragement has not taken off here. I’m not sure why given that institutions have been on a search for yield in recent years. It could be high cost of entry because of capital values.
A german tenant can never be evicted and can pass his tenancy on. The rent is also regulated and negotiated nationally.
Thats the system we need.
As I’ve said already you can’t see things in such isolation. To immitate that sort of system all sorts of other things would need to align. For a start the large number of small landlords who exist in the UK would need to be displaced by large institutional owners who plan to hold property for long periods. How do you plan to force the small landlords out and encourage the institutions in?
Nonsense, its just our laws that need changed.
Controlled rent and no evictions, simples.
How did that work out last time? Collapse in supply, disinvestment etc. You don’t need to take my word for it. All of what you want has been done before and it was a disaster. Even the Scottish Government has worked that out in that their reforms, whilst not wholly helpful, don’t look to create your vision.
Actually it wasnt a disaster for the majority, only a disaster for the landlord speculators.
I know quite a number of people who were swindled out of pre 1988 assured tenancies, and a few who were smart enough to smell a rat and still have them.
Lack of regulation leads to speculation, and the 1988 housing act led a runaway housing bubble which has ruined the country.
Contrast with germany where people invest in industry not houses, and where property values have not risen in real terms for 50yrs, while the uk has risen by 350%.
Landlords would truly ride a willing horse to death.