Food and shelter are essential to survival and yet according to the latest Government figures, collected in the autumn of 2019 and published in February 2020, 4,266 people are estimated to be sleeping rough each night in this the 5th largest economy in the world. The Charity Crisis believes it may be nearer to 8,000.
According to the charity Shelter three million new social homes must be built in England over the next 20 years of which 1.2 million homes are needed for younger families who cannot afford to buy and “face a lifetime in expensive and insecure private renting”. The Government responded that providing fair social housing was a priority and it planned to build 250,000 homes by 2022, including homes for social rent.
Housing is big business and it was the collapse of the property marked in America which led to the economic crisis in 2008 which saw the Government bail out the banks and led to ten years of austerity during which the rich, including those responsible for the crisis, got richer and the majority of us got poorer.
Building giants Barratts and Taylor Wimpey made pre-tax profits in 2019 (even after paying their Chief Executives £3.6m and £1.7m) of £909.8m and £656.8m respectively. Barratts built 17,856 houses thereby making a pre-tax profit (after all on costs) of £50,000 per house. The Nationwide Building Society made a pre-tax profit of £833m in 2019 after having paid its Chief Executive £2.37m, including bonuses, and this despite profits having fallen from an all-time high of £1.2bn in 2016.
The Government gets £9.3b per year from Stamp Duty paid on house purchase, and, of course the value of one’s house is taken into account when assessing long term care charges – with an estimated 30,000 to 40,000 having to sell their houses to pay for their care each year. And despite the introduction of a new allowance that allows couples to pass on a family home worth up to £850,000 tax-free, “Inheritance Tax” receipts hit a record high of £5.2bn in the last tax year much of which came from houses. Estate Agents and legal fees all add to the cost of moving.
Despite schemes like “Help to Buy” and the abolition of “stamp duty” for first time buyers many new so called “affordable homes” remain empty because there are too few would be first time buyers able to afford them.
Clearly there is sufficient money in the system to considerably reduce the price of new houses. However house prices have to some extent been dictated by supply and demand and to reduce the price of new ones would have a knock on effect on prices generally and leave many home owners in negative equity – i.e. owing more on their houses than they are worth.
Therefore the answer lies, not in reducing prices (although this would clearly be possible) but in increasing the incomes of the lower paid including those in the building industry, by income redistribution, so that deposits and mortgages are within everyone’s reach.
* Chris Perry is a former Director of Social Services for South Glamorgan County Council, a former Director of Age Concern Hampshire, a former Non-Executive Director of the Winchester and Eastleigh Healthcare NHS Trust and a former presenter of an award-winning public affairs programme on Express FM.
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6 Comments
I received the sad news today that the Reverend Paul Nicholson had passed away at the age of 87 http://taxpayersagainstpoverty.org.uk/news/reverend-paul-nicolsons-fight-on-behalf-of-the-most-vulnerable-continues-on
Despite his advanced years, Paul was a tireless campaigner for the poor and downtrodden. Last month he spent all day sitting at the door of Church House, Westminster begging for the street homeless and homeless families in temporary accommodation in England.
This was his way of supporting a motion which asks why, in contrast to Jesus, the Church of England is generally less effective in communicating with, and attracting people from, more disadvantaged communities?
He said “To the thoughtful papers backing the motion may I add the conviction that all land is the gift of a generous and loving God intended to provide shelter food, fuel and clothes for all. Fighting as a Christian, without allegiance to any political party, with and for the tenants and small businesses of deprived areas, which are threatened with demolition, is made even more difficult by reasonable complaints from local people about how the Church Commissioners and some dioceses manage their land, too often teaming up with the developers to the detriment of the existing tenants. Complicity with developers kicking the existing tenants off the land is read into the silence of Church leaders.”
In his final years, he was promoting the Elimination of Homelessness Bill http://taxpayersagainstpoverty.org.uk/news/the-secretary-of-state-shall-each-yearc-publish-a-scoial-housing-plan-seetitogeher with Professor Richard murphy
RIP Paul – you will be remembered by many as an example of how to live a good and caring life.
@ Joe Bourke Rev Nicholson sounds like a great man, Joe. You have paid an eloquent tribute to him.
@ Chris Perry, Great article, Chris. “It was the collapse of the property market in America which led to the economic crisis in 2008 which saw the Government bail out the banks and led to ten years of austerity during which the rich, including those responsible for the crisis, got richer and the majority of us got poorer”.
Absolutely, Chris. As a former Convenor of Social Work (married to a former Director of Social Work) I doff my cap to you for saying it. What happened to local government finance over the last ten years makes one wince……. Those at the bottom of the pile have paid the price for the Fred the Shreds of this world.
For too long this party under Clegg, and some on LDV, parroted the Tory line, with a twist of Orange, that it was all Gordon Brown’s fault. In fact it started in George Bush’s free market ‘let it rip’ U.S. of A. The rest of the world got caught in the flying volcanic debris and has had to pick up the pieces.
“The Government gets £9.3b per year from Stamp Duty paid on house purchase.”
O.K. Let’s use half of that to build municipal housing for rent. Problem solved.
We should work from the principle that everyone that wants a home should be able to. The first step is to equalise supply and demand by encouraging downsizing, using empty dwellings and building more. We should make more use of rent to buy and ensure commercial letters help people onto the property ladder.
1st thoughts on reading.-We need flats for the homeless small families,modular housing NOT built by the big boy profiteers.
Govnt built 10 thou councils houses in a decade PATHETIC Macmillan built 100,000.
What is fair social housing?
A new Govnt ‘ploy’is that a couple who own their own house can add an extra floor upwards to accommodate the kids.Sticking plaster to solve an ever growing problem.
Are the houses being built in the Cities/towns/locations that need them?
Tory philosophy is that if you have your own house you are more likely to vote for them maintaining the status quo of ‘elected dictatorship’ of constant Tory Govnts.
Half of £9.3bn pa doesn’t go very far here.
Raising incomes here is offered as if it is a simple policy choice. If it were it would be so popular that any government would do it, of whatever political colour, for the immense popular support it would engender. It isn’t. It’s a good idea but there is no magic bullet. And it is not clear what it would do for housing supply either – it may just push prices and rents up to match.
Better for the housing shortage is building more, and letting the supply and demand magic improve affordability. There’s a lot of regulation and additional taxation on housebuilding, all of it with good intentions, but not all actually delivering on those good intentions.