Feature: Housing

The odds against moving into affordable housing have never been so highly stacked, particularly for the young. But that’s ignored by those who see housing as a source of profit not as a basic human need...

Thirty years of attacks on social housing – no wonder there’s a crisis

WORKERS, MAY 2011 ISSUE

AGAINST THE BACKDROP of a massive housing crisis, the coalition’s decision to cut the social housing budget by more than half is the clearest indication that behind a smokescreen of reform they are determined to continue the destructive policy unleashed by Thatcher more than 30 years ago. That policy has been doggedly pursued by every government since.

Chancellor Osborne’s March budget, in which he blathered about “…unblocking the planning system”, has ensured that the gap between the number of households and the number of available homes will widen over the next five years. By 2016 it is estimated that 1.3 million new households will be formed, but that the number of new homes being built will be some 700,000, barely half of what will be required. Uncontrolled mass immigration from the European Union contributes to the gap.

Further, housing minister Grant Shapps’ proposal that social housing landlords increase their income by charging up to 80 per cent of market rates is set to drive up average weekly rents from £85 to £250. At the same time, the largest house builders are now concentrating on wealthier customers, typically those moving into second or third homes.

The odds against moving into affordable housing have never been so highly stacked, particularly for the young. The combination of slack construction activity (102,570 homes built in 2010, the lowest level of completions since 1923) and ever harsher mortgage terms (the average deposit for first time buyers has risen from 10 per cent to 25 per cent of property value in the past three years) puts home ownership beyond the means of an increasing proportion of the population. Rents have rocketed in densely populated areas.

And Osborne’s “reform” of the social housing budget means a further 500,000 people on the waiting list for affordable housing which already stands at 4.5 million.

A 2008 report by the homeless charity Shelter found that more than 2 million people find their rent or mortgage a constant struggle, or are falling behind with payments and having their homes repossessed (48,000 in 2009). The situation is probably much worse now, and due to worsen further.

The changes in legislation, and particularly the cap on housing benefit will have its most severe impact on the large urban areas, none more so than in London. Since 2000, average rents in the capital have increased by 65 per cent, while the Consumer Prices Index has increased by just 17 per cent.

There will, in addition, be a 10 per cent cut in housing benefit for those unemployed for more than a year. (This latter cut described by no less a body than the Institute for Fiscal Studies as “…a blunt and punitive instrument to encourage people to find work.”)

Within London, several of the inner boroughs have no private rents below the cap. The inescapable consequence is an exodus of people to the outer boroughs. In fact, it has already started – and outer boroughs such as Waltham Forest are anticipating it by moving their own tenants out to create room for those to come.

The head of housing at one such borough, Havering, sees the writing on the wall. “The implication for a borough like Havering is we will have a flood of people moving in because of the lower costs. It will lead to a ghettoisation of benefit claimants.” Not to mention the extra strain on education, health and other public services. It amounts to social cleansing.

Shelter puts it in a nutshell, recognising that the “…critical shortage of affordable housing means more and more people are being housed in the private sector, where rents are almost double those in social housing.”

These punitive measures are often portrayed as the government getting tough with feckless wastrels. In fact only 22 per cent of households receiving housing benefit are unemployed – the problem is low wages and high rents.

The way housing benefit works can indeed be a barrier to moving back into work, but these moves actually increase disincentives and make matters worse. Furthermore, they represent a false economy as the costs of dealing with homelessness and other social problems rise.

It is clear that the system of housing benefit has effectively meant that taxpayers are subsidising buy-to-let landlords, but the solution is regulation of the rented housing sector – effectively a return to the old rent tribunals which fixed “fair rents”, set up in an attempt to deal with slum landlords.

In London, as in the rest of Britain, there is a requirement for a dramatic increase in the supply of all types of housing, particularly social housing, and an end to mass immigration, particularly the uncontrolled numbers arriving from the European Union.

Social housing – and the attacks on it

The history of mass social housing begins with William Beveridge’s Social Insurance and Allied Services report in 1942, ushering in the Welfare State.

In 1945, when the national debt (expressed as a proportion of GDP) was more than three times today’s figure, the government adopted a huge council house building programme, part of the rebuilding of Britain after the war.

The 1960s saw slum clearances throughout the country and the rise of the tower block, complete with its own set of problems. At this time a quarter of the population were council tenants, up from 10 per cent in 1938.

In 1979 the election of Thatcher heralded a reversal of policy. Councils effectively lost their direct labour force and housebuilding was increasingly contracted from the private sector.

The Housing Act of 1980 brought in the right to buy, and one million council houses were sold within ten years. At the same time the Parker Morris standard, which specified minimum provision in terms of space, sanitation and heating, was abolished.

Subsequent governments have maintained this assault on housing. ■

Meanwhile, the largely unregulated private sector thrives on overcrowded, cold, damp and insecure provision. Thanks to this “market is king” approach, 1.4 million children live in bad housing. In 2007, 7.4 million homes failed to meet the Decent Homes Threshold, the government’s own indicator.

At the sharp end, 50,000 households are living in temporary accommodation arranged by local authorities, and homelessness sees many hundreds sleeping rough in towns and cities throughout Britain, often in the shadow of empty apartment buildings owned by speculators who prospered in the pell-mell “buy to let” rush.

This housing failure is also revealed in the construction industry. In 2009 there were 163,000 redundancies in the construction sector and nearly 3,000 firms entered administration. As public spending cuts bite, it is anticipated that as many as half a million workers could be laid off.

But calls to build more and more housing are not the answer – there is no more space in our cities. Instead, free up the many buildings left empty by speculators waiting for prices to rise.

A society that cannot house all its people adequately is not a “big” society, it is a broken society. Living in a secure and decent home is a basic human need. Poor housing equates to ill health, low achievement and unemployment – a Victorian slum prospect for 21st-century Britain. This will be the legacy from Cameron, Clegg, Pickles and the rest of the coalition of the unelectable if we allow them to get away with it. ■