Phew. Council tax is going up again. What a relief. For a moment, I was worried local councils might stumble upon some hidden efficiency, some radical, innovative concept like ‘spending money carefully’.
But no, in line with so many of our formerly treasured public services, water, the BBC, the Post Office and the like, we now must pay more. For less.
And where does this ever-expanding tax burden leave the property market? Well, if you’re a homeowner, congratulations! You don’t just own your home – you also get the privilege of renting it back from the council forever.
It’s like a subscription service, except the thing you get in return is a bin collection less often than you used to, and the local pothole is repaired every two years.
Council tax is a huge expense
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For buyers, the situation is even more fun. Not only must they enter a housing market that is like playing Monopoly when someone else holds all the money and owns all the streets, but they must also factor in an ever-rising council tax bill.
Because, be honest – when has it ever gone down? And when have services ever improved? But of course, extra tax revenue is essential – £12billion of it is spent on housing.
On average that means that a couple of month’s council tax a year is spent on paying somebody else’s rent. I expect that will give you a lovely warm feeling inside. But it hasn’t always been this way.
Once upon a time, councils owned vast numbers of homes, providing affordable rents and a degree of stability to those who needed it as well as holding assets that were almost always increasing in value.
But then came Right to Buy, that grand Thatcherite scheme that allowed tenants to purchase their council houses at generous discounts. The problem? Those homes were never properly replaced.
Stripped of their housing stock, councils found themselves in the perverse position of needing to house people but lacking the properties to do so. And so, in the great tradition of British public policy, they were forced to outsource the problem to the private rental sector, where landlords – who – spoiler alert, are not running charities.
And who picks up the tab for these soaring rents? That’s right: local councils, through benefits and other subsidies, are sending billions of taxpayer pounds straight into the pockets of private landlords, many of who reside overseas.
What’s more, because of supply and demand, rents for non-council tenants are pushed ever higher, further punishing those who can’t afford a home of their own.
It’s a beautiful cycle of inefficiency – sell off council homes, watch rents rise, then use taxpayers’ money to pay those rents, causing rents to rise further. If a private business were run like this, shareholders would be rioting in the streets.
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The result? Local councils are financially drowning, and once they have further reduced bin collections, street cleaning and the hours of the local library, raising council tax is the only option left.
So, while you dig a little deeper into your pocket for another annual increase, remember: you’re not just paying for bin collections, pothole repairs, or even bloated council pensions.
You’re also subsidising a broken housing market, one in which councils now act as middlemen between landlords and tenants, funnelling public money into private hands.
All because, decades ago, someone thought selling off the country’s social housing and pocketing the cash rather than re-building, was a genius idea. And so the cycle continues: higher taxes, declining services, and a housing market so skewed that a generation has missed the boat.
Jonathan Rolande is a property expert from the National Association of Property Buyers
