Housing is not an issue of Conservatism or Socialism. It is an issue of Humanity
The Conservative Minister for Housing said that. In the 1950s. His name was Harold Macmillan, and he oversaw more than 300,000 homes built every year of that decade, two thirds of which were council homes.
Those words were spoken in a time when there was a consensus that the state should step in where there had been a market failure, and to ensure that everybody who wanted a decent home could afford one. Fast forward fifty years and what has happened that concrete and brick foundation of the New Jerusalem?
Millions on waiting lists. An affordability crisis pushing up the average age of the first time buyer to 38. Housebuilding completions falling off a cliff. Empty homes in areas where there are no jobs and scarcity where people want to live.
What has come out of the Conservatives to address this? A policy that wasn’t in their manifesto, nor the Coalition Agreement. A policy that doesn’t seek to increase supply. A policy to incentivize joblessness, and to encourage ghettoized estates. They want to abolish secure tenancies and make future ones dependant on being continually poor or wretched (yes it’s an old-sounding term, but then the Tories’ policy harks back the Victorian era, so why not?).
Proposals to remove security of tenure are a reaction to scarcity, not a solution to it. I fear that they are driven by an ideological opposition to council housing in principle, a view that public housing should be a home of last resort, not the rented castle of the working man. A view that it should be something that the enterprising can and should seek to flee from the first chance they get.
This idea hits the most disadvantaged in society. By proposing to make tenancies dependent on low or no income, it removes incentives to work and better oneself. It snatches away the most secure part of many people’s life, often when they are on the margins of society and employment. It will ghettoize council estates into sink places where only the most incapable of work can live, as if so many aren’t close enough to that already. It turns on its head the best part of a century of the notion that the ‘working man’ deserves a decent place to rest his head, just at a time in our history when the prospect of home ownership is remote for most first time buyers. It is essentially the extinction of council housing, the completion of the project started by Thatcher, and continued by New Labour.
The BBC reported yesterday that LibDem Ministers have accepted these ‘reforms’ as part of a package of housing proposals. If this is true, I am gutted. I thought that my 18 years of membership and campaigning had been with people who believed in the tenets of the welfare state, and wanted to make it better, not destroy it. If we don’t fight this, if we don’t get all our MPs behind Simon Hughes’ good fight, then we will deserve to be a one-term coalition partner, consigned to the dustbin of politics for another 65 years.
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54 Comments
I have to say I entirely agree.
completely agree. great article.
I’m in complete agreement also…….we’ve (so far!) achieved a consensus.
I completely agree.
If LibDem ministers fail to dissociate themselves from this policy, the Party should dissociate itself from them. My vote for President will be dependent on the stance which the two candidates take on this.
OK Mr Curran.
You say you don’t like this policy. But I don’t see any in-depth analysis of how to get out of this problem. And in the short term there are people languishing on housing waiting lists and other people trapped into staying where there is no work because of assured tenancy and no incentive to move.
I live in a council house myself and advised both my two boys of working age to put their name on the waiting list because as they are both on poor wages there is no chance they will ever be able to buy their own house. One of them did move out for a while and rented a flat but even that he couldnt afford and after a month had to move back with us. What are they supposed to do now ?. Even if they are lucky enough to get a short term tenancy with the rent being increased to 80-90% of the going rate they have no chance in the foresseable future of them ever being able to move out and set up home on their own. Their not teenagers they are both in their mid twenties and now all they have got to look forward to is years at home with their parents, and a room they have to share with each other.
Their only crime is to be in low paid jobs and to live in the south where buying a house is totally out of the reach of normal families like mine.
Thankyou Mr Cameron and Mr Clegg .
To avoid upsetting any concensus (it is a rare and wonderful thing!) I will try to make a couple of points that complement the article.
Firstly, we need to simply bite the bullet on building. The policy not just of our party but of all parties and most other commentators is contradictory and avoids the real issues. We need to make a choice: do we build 300,000 more homes or do we not? (Note: my understanding is that London is short of 300,000 homes, which is a lot fewer than the 300,000 a year for 10 years that were needed in the 1930s!). If we are to do so, we cannot keep pretending that every piece of green space that has ever been statemented in some way (Green Belt; MOL; etc…) is sacrosanct. It is incredible (in the literal sense of the word) to say that we can build sufficient new homes on Brown Field land etc. Nor will 300,000 new homes mean tarmacing over the entire South East. London is currently one of the greenest cities in Europe (though we rarely appreciate the fact) and there is a lot of green space around it. What matters is that people have access to green space; not that every former football field is declared a permanent Arcadia.
The second point is that the shortage of housing is not simply a shortage of Council housing. It is a shortage of all housing. The housing problem could be solved simply by making development (incluiding both new build and rennovation/rebuilding) a lot easier. This would create a flurry of private housing development that would result in falling house prices (and thus rental prices), to the benefit of first-time-buyers and renters. But again, we need to remove the contraditions in our (and other parties’) policies. We need to stop trying to prop up house prices. And we need to stop supporting planning law that prevents (re-)development, and then reacting to the resulting under-supply by building (often smaller, lower quality) Council Housing.
Great comment by Tom Paperworth. There’s lots of small changes to tax and benefits and laws and so on in an attempt to increase growth by 0.01% or somesuch. Yet a relaxation of planning laws that allowed bigger and cheaper housing to be built would increase welfare by much more than that addition to annual growth could do. I’m a homeowner with a large mortgage, but fully believe the Lib Dems should have an implicit policy of reducing the price of housing by something like half in real terms over a generation (clearly it can’t be done immediately, not least because people have invested a lot of money in their house as a saving vehicle)
Can someone please answer this question. Given that the population is not growing why (other than replacement) do we need to build any more housing?
One of the answers is, of course, to do with where the work is. Houses and people are pentiful where work isn’t, and in short supply where work is.
isn’t the answer to rebalance the supply of work rather than the supply od housing?
The population is growing? The existing housing stock is too small and of poor quality? Shrinking household sizes?
Btw apologies to Tom Papworth for getting his name wrong.
The Chancellor said to day that he wanted to change the benefits system so that it incentivised people to work. The idea of taking away securing of tenure for social housing tenants so that they have to be reassessed every x number of years will be a massive disincentive to work. Instead of get a job and lose your benefits it will be get a job and lose your home which is worth far more.
What is the point of getting behind Simon Hughes on this issue. As far as I am aware he has stated that he has been persuaded that this is the right thing to do. Big respect to any Lib-Dems who do fight this iniquitous policy though.
This article is preposterous. It’s based on a rose tinted view of social housing for artisans and the masses in some sort of arts and craft vision of pre industrial rural idyll. The fact is that for the best part of 50 years council housing has never been for the masses and in many places has been a factor in holding people back not giving them a step up. We now have a situation that in nearly all council estates those with get up and go have got up and gone. In the private rented sector we have a transfer payment from the state to rachmanesque landlords who are providing vastly expensive slum conditions for their benighted tenants.
To deal with it there are basically two options – one is to try and recreate the immediate post war staus quo where council housing was for the masses, where residents worked in the nearby factory, local shops and post offices were just round the corner, public transport was readily available and janitors and caretakers were plentyful and resident on the estate as neighbours. The other is to recognise that through custom and practice council and welfare funded rented housing is basically a safety net for those who are unable to work or have retired. The first is ludicrously expensive (and no longer relevant in a zeitgeist that values ownership) the second requires some grown up recognition that council housing is basically the first rung of the care ladder and some tough decsions that breaks the dependency culture it helps to engender. Making work always more attractive than a life on benefits and stopping subsidising slum landlords are two parts of a strategy that could be the making of a new way forward for affordable housing.
What is clear is that trying to defend a system that is now completely bust is neither radical, liberal or sensible.
There will be NO changes to security of tenure for EXISTING tenants. Any changes to tenure will be to tenancy agreements with those on waiting lists for LA or HA properties -this was clearly stated in the announcement.
As it would cost £50 bn to house all PRIORITY applicants on waiting lists, let alone those with few housing need points, there is no way to solve this problem without radical overhaul. The system proposed sounds like social housing schemes in Europe, where tenancies are means-tested on a regular basis.
It is also common practice now in LAs & HAs to effecively set a salary cutoff point anyway, and applicants with earnings above £30K pa are wasting their time in Canterbury, as they will receive 0 housing points.
I agree. Really well written, well informed opinion piece. More please.
@Roger, Patrick, David and Nick – thanks for your comments. I think this issue is a huge one that is consistently under reported, and I think a lot of people are very agitated about house prices and housing generally.
@Tabman
If only there were room for a long in-depth analysis of how to get out of the hole! I had to keep to word limits but could have written reams in answer to you. Essentially, we need to build more affordable housing. I’m sanguine, to be honest, whether it’s Housing Association or council, but it needs to be built, in large numbers, and quickly. And that means using public money to do it. I’ll address how below. You seem to imply – forgive me if I’m wrong – that because people have no incentive to move thanks to secure tenancies, they are denying homes to those in need on the waiting list. I understand why you and others make this point, but in doing so you are accepting that there is a shortage and that we should ration that shortage so that those who can move on should do so. I think you’re effectively blaming current tenants for the people on waiting lists, when in fact it’s a shortage of housing that is causing those waiting lists to explode. Rather than re-slicing a smaller pie, I want t bigger pie so that argument doesn’t occur. It doesn’t occur in other areas of public spending. Would you, for example, blame someone getting a hip operation on the NHS for the fact that someone else is waiting for one? Wouldn’t it be more sensible to address the cause of the rationing rather than castigating those to whom goods are rationed?
You’re right about housing not being where it is needed – I say that in my article. But we also have increased rates of household formation – single living alone for longer, older people living longer, more divorced families – which mean that even with a static population, we need more homes. Throw in the fact that the population is actually also increasing (contrary to your assertion), and voila – lots of demand.
@ vince
I sympathise with your problem – it’s faced by tens of thousands of families in the south. In fairness it’s not clegg’s fault we are where we are – you would more correctly blame Mrs Thatcher and Mr Blair. However, my article highlights a fear that things won’t get better anytime soon.
@ Tom & Matthew
I agree with your fundamental point that we need to build more housing, Tom. If the state stepped in a built more affordable housing it would add to supply and ease prices for everyone, although private building also needs to be stepped up.
I don’t think that it’s planning law that restricts this, Matthew – it’s no more restrictive than it was in the 60s when we hit a peak of 450,000 homes built in a year – it’s that the political will isn’t there. Currently about 11% of land in the UK is built on – although parks and gardens make up a lot of even that small percentage – and we could solve the housing crisis by building on another 1%. It’s not, as you say, about emotive terms like ‘tarmacing over the south east’. In fact, we could accommodate the south-east’s housing needs on the Thames Gateway alone, according to Sir Terry Farrell. It’s about being clever about how we plan future communities.
@ Emily
Exactly.
@ Isabel
No, Simon has been fighting the government on this issue. He is not behind it at all, although some LibDem Ministers are reported to be so (Simon is not a Minster).
I agree with this article 100%, and if it is true “that LibDem Ministers have accepted these ‘reforms’ as part of a package of housing proposals” the grass roots of the party should fight this tooth and nail, in fact that is what I expect to happen, anything else then the Lib Dems now is not the same party I’ve been supporting all my adult life.
@Tabman and Dan
I said I would address how to build more housing in my above reply to Tabman, and wanted to take that point with Dan’s comment.
Dan, you say that there are two options to dealing with the issue of a shortage of affordable housing. The first implies a building of a lot more council houses, although you don’t explicitly say that (forgive me if i didn’t extract your real meaning from your comment). The second option seems to be suggesting (again, forgive me if I didn’t read it right) that council housing should be a little more than a safety net for the very worst off, one from which they should get out as soon as they are able. I have looked and looked but neither option actually proposes a solution to the housing crisis. Do you believe in building more houses, of any kind? What is your solution? There are two options, yes, but both are perspectives, not answers.
In answer to the content of your two options, your first option paints a picture that doesn’t exist in my head but which involves what I think is an essential truth – that the state should build lots more houses. I am a Keynesian on this issue – building housing, even borrowing to do so, creates jobs, provides tax revenue, reduces the social cost of unemployment, alleviates housing need for those at the bottom and brings prices down for those above them. The economic case is overwhelming. But, because the Tories are deciding on a policy which is pretty much your second option, they are making an ideological choice not to pursue it.
Looking again at your post, Dan, you actually seem to counter your own objection to the principle of council housing with your line: “In the private rented sector we have a transfer payment from the state to rachmanesque landlords who are providing vastly expensive slum conditions for their benighted tenants.”
That rather good line has made me think that it is worth remembering why we have council housing in the first place. My article was much longer originally, so I’ll paste the part about this which was cut from the final edit: “The unsanitary slums of the Victorian era created sickly people. Disease, physical weakness and hopelessly inadequate conditions existed in the beating heart of the greatest empire the world had ever seen. The moral imperative to ensure that our fellow citizens could breathe clean air and live healthy lives was matched by a need to have a working class healthy enough to fight for king and country during World War One, and to ward off incipient Bolshevism after it.”
Good housing created healthy people. It was good for them, and good for the ruling class. Poor housing creates sickly people, as any councillor or MP with constituents in overcrowded housing will tell you. That actually costs us all through the NHS. So it is still in our interests to provide decent housing for all.
Dominic, first of all can i say its good to see that not all lib dems have forgotten what their party is supposed to stand for. I must disagree though that Thatcher and Blair are to blame entirely for my current position. Without a doubt they have a large part to play by firstly selling of council houses and secondly for not replacing them. Having said that though it is not them that has finally taken away my boys chances of firstly getting a place and secondly affording it when they finally get one. Yes the waiting list may of been long hence why we advised them to put their names on the list but thanks to whats been put through today by this coalition there is not even any point putting your name on the list because firstly it won’t give you a secure home and secondly they couldnt afford the rent if they got a house/flat on a short term basis.
On a more pragmatic level (the moral argument for SH is well proven in my opinion) most council/association housing tenants are NOT generally Tory voters but there are a great deal many Lib Dem voters who are, especially in my area, I think we can safely say if this does go through and when the full impact is realised, we can kiss them all goodbye, yet another nail in the party coffin, if the Tories do not have a long term plan to destroy the party they are certainly doing a good job of it by ‘accident’ .
@ Vince – Thanks. I think we basically agree – historically the problem is a legacy of housing policy since the 80s, but thanks to the current government, it’s not going to get better (they today announced that they will build 150,000 social housing units up to 2014. That’s 40-50,000 a year, which is an absolutely pathetic amount and nowhere near to addressing housing need).
@ nige
I completely agree. I’m based in London, and although Simon may be ok with his council tenants as he is both locally very popular and also has fought on this issue, we can kiss goodbye to ever taking any seats in Islington or Camden, and Sarah Teather can expect a very bumpy ride trying to sell this one to her tenants. How she’ll sell this as a Minister I don’t know…
Matthew: “the Lib Dems should have an implicit policy of reducing the price of housing by something like half in real terms over a generation”
I’m not sure I’d have a target – prices need to find their own level, and we have no way of knowing what the “right” level is – but I agree that we should have a policy (and I would say an explicit policy) of reducing the cost of housing. Note that it doesn’t even have to mean falling prices; just that prices fall relative to household income/wealth.
Tabman: “Given that the population is not growing why (other than replacement) do we need to build any more housing?”
Matthew already mentioned the fact that shrinking average households means a demand for more (smaller) housing. For example, more people now live along; more couples break up. Also, even a static population can age. Our population is getting older which means children growing up and needing houses more quickly than elderly people die. And of course we need to improve quality (which also means increasing size – few developed nations would put up with the tiny little matchbox-houses we are building these days!).
Dan: I agree that the early-C20th (and I suspect Bismarckian) concept of social housing doesn’t really reflect the C21st experience. Social housing is now rationed and – like with rent controlled properties – once one is in one would be crazy to leave. This isn’t Homes For Heroes or new estates for the upper working classes; these are places where problem families are dumped next to those who have been living on the estates for generations.
I also agree with Dan that “radical, liberal … sensible” policy is called for. I suggest that we’d be better off enabling a massive increase in private sector building along with a shift away from Council Housing to all social tenants being in the privately rented sector, and Council’s using their massive buying power to enforce standards and drive down cost (I can imagine that they’d be able to negotiate extremely good rates with owners of large developments if they guaranteed occupancy and ensured that the tenants, too, maintained the property at a certain standard).
However, I disagree with your view of the privately rented sector: the vast majority of homes are of a very high quality which is why the rented sector is still popular. Rachman was only able to operate as he did because of Government rent-controls, which discouraged owners from letting property (thus injecting competition into housing) and discouraged renters from moving (because they would lose their controlled rent). Also, Councils have power to enforce housing standards in the private sector. This is out-of-date propaganda that doesn’t to reflect the real world.
Dominic @ 4.30pm: “Tom. If the state stepped in a built more affordable housing it would add to supply and ease prices for everyone, although private building also needs to be stepped up.”
That is true up to a point (because the rents are set artificially their effect on prices would be different, but the basic supply/demand issue should hold) but it misses my point. The shortage of housing is not a market failure. It is very much a government failure, in that it is government (i.e. planning law) that constricts supply. Were there a housing shortage as a result of genuine market failure one could argue that there would be a need for “the state to step in” but to advocate the state stepping in to rectify problems that are created by previous state interventions is a slippery slope, as well as being very expensive and inefficient.
As Mao might (not) have said, “Let a thousand housing developments bloom!”
BTW: There’s nothing like an article on a technical issue to lead to some good, long posts :oD
It’s absolutely right to raise the issue of housing as of central importance. It isn’t at all clear to me why the Treasury felt that housing fell very low on the list of priorities for capital spending and hence was ripe for the chop.
It is a classic case of silo thinking – failing to join thinking up (to use an outmoded turn of phrase) – good housing has a wide range of spin offs across a range of other policy sectors, including health as @Dominic Curran notes in the comment. One of the most important components of ‘housing’, which is intrinsic to delivering these wider benefits, is security and stability. It is not having to worry about being moved on at short notice that allows families to plan, build and sustain social networks, uninterrupted schooling, etc.
The idea that the govt should be cheering itself for making capital funding available for 150,000 affordable homes *over four years* is laughable, especially when they redefine “affordable” and ratchet up social rents at the same time.
It is clear that the policy proposals laid out in the CSR today for housing are troubling, even in the scant detail offered. They focus on symptoms rather than causes. Rather than housing as a secure base from which to build, the proposals seem precisely designed to promote the opposite view of state-assisted housing: that it is temporary assistance for those in the most impoverished and extreme situations, with little incentive for households to improve their circumstances. This throws the thrust of recent policy in reverse: far from seeking to create sustainable and mixed communities it is now aiming for concentrations of the most disadvantaged. An American-style Project coming soon to a town near you?
I sincerely hope that within the ranks of the LibDems there remains sufficient momentum behind a more enlightened approach.
Another, overwhelming argument against this policy it is not that it will do nothing to alleviate the housing shortage, it is that it will do the exact opposite. it has been said that this will only effect ‘new’ tenants however anyone with existing tenancy will simply block the system, no one in their right mind will downsize say, from a 4 bed to a 3 bed through an exchange scheme (as frequently happens now) if it means swapping a secure ‘lifelong’ tenancy agreement for a short term one, thereby guaranteeing an even worse situation in the future.
@ Tom Papworth
It is important not to adopt too sanguine a view of the private rented sector. There are certainly some good properties in the sector and some good landlords. There is also some very poor property and very poor management practice. Every review of the sector that was conducted in 2007-2008 (by the Law Commission, RICS, and Communities and Local Government) concluded that there was a case for strengthening regulation in the sector (in the case of the LC it argued for stronger self-regulation by trade bodies) and that the existing legal framework was inadequate, particularly because local authorities very often do not have the resources to take effective enforcement action (and that is only going to get worse, one would presume). Some of the problems in the PRS are hard to track precisely because of their nature (rather than taking your landlord to court to enforce your rights it is often easier to move).
It would be more accurate to say that Rachman’s actions were made possible by a botched deregulation under the 1957 Rent Act, which allowed a significant gap to open up between the controlled and the deregulated rents and created incentives for unscrupulous landlords to ‘encourage’ sitting tenants to leave so that the property could be relate at an unregulated rent. But maybe that is getting a bit too detailed for current purposes!!
It seems to me that Dominic’s analysis of the housing crisis, and his proposed solution, is based on a society which totally changed in its aspirations and expectations during the second half of the 20th century.
When social housing was developed on a massive scale it was mainly intended for families, or those wishing to start a family. Moreover the majority of tenants would have had at least one family member who was in relatively well-paid, full-time work. Single people, single parent families, and the unemployed were certainly not the target client base. Many of those who would have once perceived of themselves as potential council tenants look instead today to the private sector to buy their first home. Indeed, they may even turn for the first step on the housing ladder to ex-council houses which were sold under the right-to-buy legislation. The fact that the best council housing was sold off under the right to buy provisions demonstrated that many former council tenants (or in the case of old tenants, their grown-up children) were well equipped financially to cope with home ownership. Today’s social housing tenants, for better or for worse, come from a very different strata of society, and the approach to social housing adopted in the post-war years is no longer relevant, or appropriate.
As for the idea of building hundreds of thousands council houses in the South East, this is simply pie in the sky. The majority of council housing built in the immediate pre- and post-war years consisted of huge estates, of which the Becontree estate in Barking is perhaps the most famous. Not only is there not the land available to build on this scale, but even if it were the general consensus is that in the long run such vast estates have in general become a social disaster, trapping people in poverty and low expectations. It is only in the so-called commuter town which ring London, such as Ashford in Kent or Billericay in Essex that land is available for major housing building, but in these areas there is major opposition to further private house building, let alone social housing, the proximity to which is perceived as lowering property values.
Lastly, the view that the jobs can be moved to where spare housing capacity exists flies in the face of history. The tragedy of moves by successive post war governments to move public sector jobs out of London and the South East is that the private sector commercial and industrial investment and development which should have followed has simply failed to materialise. This is why so many areas in the Britain’s former industrial heartlands will be so badly affected by cuts in public sector employment.
I do not know whether or not the Coalition’s proposals will improve the housing situation, but their critics seem to be simply recycling yesterday’s solutions to yesterday’s problems.
@ Tom
Your solution to the crisis is to suggest that we should stop all social housing and house everyone in the private sector with councils enforcing standards and driving down prices is a very interesting one. Its certainly classically liberal, but i’m not sure it would achieve the intended results, partly becuase i disagree with your assertion that the planning system is to blame for a shortage of supply. The huge drop off in housing completions in the last 20 years is becuase of the state basically withdrawing from the sector. Under recent planning refomrs, local authorities are required to have a five year supply of housing identified in local plans, and yet we still achieved historic lows in completions. Certainly the green belt restricts building in greenfield sites outside london, and there are huge development pressures in the south east, but this is the result of an economy focused on one region of the UK, not of especially restrictive planning policy.
The problem is that huge demand and cheap credit stoked prices up so much over the last decade that homes became totally overpriced. Combined with the state NOT building 200,000 homes a year, and you have a housing crisis. i really don’t blame planning policy.
Since your solution depends on a massive increase in private housebuilding, which presumably would be liberated by removal of your ‘restrictive’ planning policies, I’m not sure my other worries about your solution make sense, since i don’t share your assumptions. However, one worry i have is that private landlords wouldn’t accept a rent of 40% of market value (what council tenants pay now), no matter how good the purchasing power of the council. Plus, the council is dependent on developments coming forward, which is by no means assured, whereas if they had the power to build homes themselves, they could guarantee that a) they would be built and b) they would meet the area’s housing need. By contrast, wouldn’t developers want to carry on building 1 and 2 bed flats, which isn’t what the people on the waiting lists need, by and large?
Tom Papworth
“There’s nothing like an article on a technical issue to lead to some good, long posts 😮 D”
There is nothing technical about this issue as far as the poorest in society are concerned, for them it is very a fundamental issue to say the least. after all it’s their security we are talking about.
@ Graham
“Today’s social housing tenants, for better or for worse, come from a very different strata of society.”
That is true. Why is it true? Because we have sold off council homes to tenants who wanted to get out, and didn’t build any more. Then we allocated the remaining homes to those with the greatest need. As time went on, and fewer and fewer homes were left in the social sector, the level of need required to get a new tenancy grew and grew. So it became a place where the most vulnerable, and those least able to cope for the themselves, and immigrants and asylum seekers, were all increasingly concentrated. But that was a result of right to buy and no new build. You are thus describing a situation that is borne out of scarcity. A situation of plenty simply wouldn’t mean what you imply, as a much broader range of people in housing need, like the families you describe, would qualify for homes. Plus, we now understand the need and use of mixed communities, so concentrated pockets of deprivation can be avoided.
As for your next comment, that the post-war approach to social housing is therefore “no longer appropriate”, i have to ask what you mean by the “post-war approach”. If you mean that we shouldn’t build any more estates on the edges of towns and communities and dump a load of people there, i totally agree. If you mean we shouldn’t build enough social homes to get ourselves out of this crisis, i totally disagree. There is enough land. Local authorities have identified it in their plans. I am not talking about huge greenfield sites. Islington Council saw some 5000 homes built in the last council term, and it has virtually no open land at all. We can and should increase the density of existing settlements, with council or RSL blocks forming part of the urban streetscape. There should be no more giant, disconnected estates, either within or outside cities. But there can and should be easily built and managed blocks of housing that social tenants can live in, whether it’s one building in Islington or a Brookside style cul-de-sac in Ilford. If we built at the density of Paris, Amsterdam or Barcelona (hardly urban nightmares), we could meet our housing need, in London at least, within the exisiting urban footprint.
Building hundreds of thousands of council homes in the south east is entirely possible, if there is the political will to drive it through.
Dominic speaks of an economy focussed on the South East as though this were had been government policy, whereas in fact successive governments have tried, and failed, to promote economic development in the UK’s other regions. Germany’s experience shows how difficult this is. West Germany, unlike the UK, was fortunate to have a significant number of economically prosperous regional centres – Hamburg, Cologne, Stuttgart, Frankfurt, and Munich is particular – so that no one area dominated the national economy. However attempts to transplant the model to the East with vast injections of public money and infrastructure expenditure have, with the possible exception of Leipzig, been relatively unsuccessful. The young and ambitious still continue to flock to the West, leaving an ageing and unskilled population in the East behind them. I am afraid that history tells us that housing development follows economic development, and it is far from easy to reverse the flow.
Germany also provides an alternative model for housing provision. Only 44% of the population own their homes, and these are predominantly in medium and smaller provincial towns, or in the countryside. In Germany there is no sigma attached to living in rented accommodation, though of course the “best” areas of the city attract the highest rents. Consequently, most city dwellers live in rented accommodation, and while some of this would be classed as “social housing”, much of is owned by private landlords. However, unlike the UK, where most private landlords own just a few properties, in Germany providing housing for rent is a major commercial activity, undertaken by property companies in exactly the same way as UK companies own major office developments and shopping centres. The result is an abundant supply of privately rented accommodation, at reasonable and affordable rents, and without any question of security of tenure.
While in the short-term there is an issue of companies being able to borrow money in the UK for this type of activity, there is clearly something fundamentally wrong with our structures – whether it be planning, company or tax laws I do not know – which prevents the private sector taking over the housing role once fulfilled by the state. Pension schemes see commercial property as a reliable and relatively stable source of income, so there is no fundamental reason why rented housing should not fulfil the same role.
In terms of the type of development built by private companies, I have to admit that the British have a love affair with the house which Germans do not share. However, even in the UK’s city centres, there are few opportunities to actually build houses, rather than flats. Often the issue will be therefore more to do with the size of these flats, and this can easily be addressed through planning controls. Indeed many private developers have recently learnt to their cost that building 1 and 2 bedroom boxes in city centres was not such a good investment as they originally envisaged.
quick technical question- the talk is all about social housing however is there a distinction being made between housing association houses and council housing in these proposals?
I posted my last comment before I had read Dominic’s latest, much of which I agree with – apart of course from his final conclusion that the state should be spending vast amounts of public money on building social housing. However, I must pick up on his point about selling council housing and not building to replace it. Because of the huge discounts available to sitting tenants, the income from sales fell well short of that needed to replace the properties which were sold. Moreover, subsequent changes in the structures of local government finance made the situation much worse. (Indeed after over a decade of Labour rule Tory Wandsworth is able to levy the lowest council tax rate in the country thanks to a funding formula for central government grant which protects its residents from a huge tax hike, i.e. it needs assessment should lead to a grant far less than it actually receives). Unless we take housing finance totally out of the hands of the state we shall continue to suffer from the curse of unintended consequences.
Quick technical answer. I see no real distinction these days between most housing associations and local councils. Indeed many housing associations now own and manage housing which once belonged to local councils. I do however accept that there is a role for some small special housing associations, such as the John Groom Association which specialises in the needs of the disabled
What’s wrong with building more social houses this year than in any year under Labour? What’s wrong with presiding over a substantially bigger net increase in affordable housing in this parliament than in Labour’s 13 years in office? Yes we’d all like to build even more houses, but the economic situation means that we can’t afford to. We have to make the best of what we’ve got, and we are doing more with less, with a new funding model enabling us to build affordable houses at less than half the cost that Labour did.
This article completely misrepresents the policy. The new tenure introduced by the coalition is an option for social landlords to use for new tenancies. It will not affect existing tenancies, and is not compulsory. Local Authorities will be free to choose whether to introduce the new tenancy in their local area themselves, it will not be forced upon them.
This new tenure will provide a fairer subsidy model, which will increase the government’s stock of affordable housing, helping more households with their housing than would otherwise have been the case.
Don’t believe everything you read in the papers.
Andrew Stunell MP
Tom P – there is an answer to optimal pricing of market housing – the cost of provision, plus the cost of internalising externalities. That suggests that a small 3 bed terrace (pre-1914) would retail for around £50k or so outside of London, and rent would not exceed £70 a week. In about half the country it would be lower than that, with values of typically £50-£60 a week outside of the South East. At that point we would not need more social housing, since pretty much anyone in regular work would be able to afford to buy, and we could return to a sensible system of covering interest payments for the unemployed, up to a cap. Remember that Macmillan is mainly famous for total house building, not council house building.
How do you come up with those figures?
I would add two other things
1. Are planning laws really no more restrictive now than in the 1960s? Here in London you have to get permission even to alter the back of your house – friends of mine were refused permission even though none of their neighbours would see the work on the grounds of ‘architectural interest’ – it is a 1900 terraced house of which there are about 5,000 within 2 miles, many falling down and the work was to the back interior.
2. When I said planning is to blame I said that because (as Tim says) there was a lot more private housebuilding in the 1950s/1960s than now. Clearly there are enormous profits to be made from taking non-housing land and making it housing (look at the fate of London pubs/churches etc), so I can only imagine it is planning laws?
@Andrew Stunell MP
“The new tenure introduced by the coalition is an option for social landlords to use for new tenancies. It will not affect existing tenancies”
Okay that’s understood but what about existing tenants who wish to exchange (to downsize from a 3 to a 2 bed property for instance)? as I said previously no one will ‘swap’ if it means also exchanging a lifelong tenancy agreement to a short term one (and who would blame them). therefore making under-occupancy even more of a problem than it is now.
This Proposal will only serve to make an already a serious problem into a critical one.
I won’t bother going into the ‘ghetto’ aspect of this proposal where the disabled and unemployable are herded into one segregated area unable to move as my post would become far too long and emotive.
No point building new social housing as long as right to buy means it can be sold off five minutes later.
Surprised no one has mentioned Osborne today: “Alongside £4.4 billion of capital resources, this will enable us to build up to 150,000 new affordable homes over the next four years.”
Be nice to have more detail on that.
All housebuilders have been interested in in recent years is new towers of flats (how many, I wonder, remain unsold – or unlet by those who bought them as investments?) – totally unwanted by families or the elderly. And over-priced ‘executive homes’ the size of shoeboxes.
I thought this was down to land prices (as well as maximising profit)??
Meanwhile, easy mortgages have allowed anyone with a few spare quid to own a ‘property portfolio’ – and push prices up absurdly in relation to average earnings. My street used to be ‘first-time buy’ territory. The ‘for sale’ signs in recent years have nearly all been replaced to ‘to let’ signs soon after. Rented by people who might have aspired to buying them in the past.
Prices have risen something like 400% in what, 20 years? Earnings sure haven’t.
Best thing would be if prices continued to fall and houses became somewhere to live again, rather than get-rich-quick schemes.
So Andrew , are you now saying that its not true that new tenants will only be given short term tenancies and that they will have to pay 90% of the going rate of prices in that area. And i didnt read that in the paper ive seen on it on three different new channels. One of the news articles also pointed out that in London that will mean new tenants seeing a £120 a week rent increase on what they would of paid.
If the state stepped in a built more affordable housing it would add to supply and ease prices for everyone, although private building also needs to be stepped up.
I don’t think that it’s planning law that restricts this
Matt, If there were no planning restrictions I don’t suppose that house prices would ever go far above the marginal cost of building another house. So if house prices have rocketed in recent decades that rather suggests that the problem is planning restrictions.
> there was a consensus that the state should step in where there had been a market failure
More the other way round, in Macmillan’s case, surely? The outgoing Labour government (more socialist than Blair-Brown) had set a house-building target which it had not met, but Macmillan – with the aid of Ernie Marples & his building trade connections – did.
Graham wrote:
> successive governments have tried, and failed, to promote economic development in the UK’s other regions.
Surely only Heath made a serious attempt to move commerce out of London? Thatcher almost explicitly reversed that philosophy – and that of Callaghan, who moved some large government offices out of London.
David Lloyd George, Newcastle, 4th March 1903
@andrewstunnell
firstly well done for coming here and engaging in the debate. you already know my views on fixed term tenancies, but the proposal to raise rents to 80% of market value is deeply worrying, and very expensive to the gvt too. in many areas, particularly those of high demand 80% is completely unaffordable, thereby defeating the object of social housing. it doesnt matter how many you build if people cant afford them. obviously if this has been misreported then feel free to correct us.
essentially its the old issue of housing benefit and the benefit trap. 80% of market rents is little different to private rented temporary accommodation, which costs billions in hb. the same will happen here if this proposal is accurate. people won’t be able to work, or those that do will need top-up which doesnt cut the benefit bill, which is hugely important. building truely affordable housing could halve the housing benefit bill as people can afford to work, and even under the tapered system they won’t need to claim that portion of universal credit.
if there was a way to use some of the savings that would be generated to build housing and keep rents down, that would save more money to go on paying off the deficit, or doing something else.
in terms of mobility out of the stock, i would repeat what i said to you earlier this month and urge you to seriously consider right-to-invest to replace right-to-buy. on top of that i agree that the issue of making better use of the stock is crucial. the thing is that councils already have some tools on this, many just don’t use them or market schemes aggressively enough. but some form of national cbl might help here too.
the fundamental problem for areas of high need is the availability of land. if you were to ease some of the restrictions in the south east then the private sector could provide some serious assistance through s106. there’s also the old chestnut of vat on brownfield development and community land auctions for greenfield sites.
i hope this helps, and if what is being reported is inaccurate please do write something on lib dem voice, or elsewhere, clarifying the situation.
@ Andrew Stunell
There is a growing refrain from Lib Dem ministers that members have misunderstood this or that Coalition policy. Maybe this shows that any distinctive Lib Dem message is being lost. At our local meetings members wonder if our MPs have always understood Coalition policy! We are being called to account by our voters for saying one thing and doing another. People do understand that we are a minority partner but they do not understand or like the cheerleading of every Conservative policy as if it was our own.
Firstly, may i say thank you to everyone who has commented here. Comments have been well-informed, civilised, intelligent and done with a spirit of debate that warms my libdem cockles.
@ Andrew Stunnell
As Patrick Murray said, thank you very much for enagaging with the debate here. Any MP – let alone CLG Minister – willing to take the time and effort to do so is to be welcomed and applauded.
having said that, let’s look at your claims:
1. “What’s wrong with building more social houses this year than in any year under Labour?” – according to the HCA, some 55,000 affordable homes were started in the year ending 31 March 2010, 39,000 of which were for social rent (http://www.homesandcommunities.co.uk/statistics). Housing completions in that year were 31,000. Presumably the latter is your target to beat? If you are building 150,000 homes in a five year parliament, isn’t that 30,000 per aunnum? This is lower than either housing starts or housing completions in the last year of the Labour Government (although higher than in any previous year). So i don’t think the claim really stands up. Isofar as it does, it does so barely, just like a 0.01% increase in the NHS budget keeps the Tory promise to increase the NHS budget. It keeps the letter of the promise but not really the spirit.
2. Labour record on building social housing was, in any event, pitiful. So being slightly better than pititful is not really something to get too excited about. Although it is preferable to ‘worse than pitiful’.
3. “What’s wrong with presiding over a substantially bigger net increase in affordable housing in this parliament than in Labour’s 13 years in office?” I don’t think this stands up, either. It appears that something close to 250,000 social homes were built 1997-2010 in England alone (see here: http://www.hnm.org.uk/charts/housing-supply.html#eight and add together cocunil and hosing association annual totals). The Coalition’s 150,000 is less than that. It’s only five years compared to Labour’s 13, so I accept that it would be lower. I’m a bit bemused why you would make that claim. In any event, it appears also to not stand up to scrutiny.
4. “The new tenure introduced by the coalition is an option for social landlords to use for new tenancies. It will not affect existing tenancies, and is not compulsory.” It is to be welcomed that the policy is not compulsory. However, if i think it’s a wrong policy, I don’t really care that no one will be compelled to adopt it. My point is that i don’t think you should be creating that option for local authorities in the first place. At some point you have to inject principle into policy, and be accountable for it, even if you’re giving local authorities the right to carry it out. If, for example, you said that you would allow local councils to not give homes to ethnic minorities, that is still morally wrong decision to make, even if you’re not forcing it on anyone. ‘Localism’ is not a defence of a policy, it is a defence of a process.
Can you answer the charge as to the substance of the policy – that it will create disincentives to work?
The fact that the policy is only to be applied to new tenancies still means that it is the death of council housing. It’s just that it is a very, very slow death, which will be complete when the 18-year old who takes a tenancy out today takes his last breath in 50 years’ time (assuming no succession!).
5. I will end with a question for Andrew. Do you really in your heart of hearts believe this policy to be a good one? Because if you don’t, you don’t have to accept it. It wasn’t in our manifesto, it wasn’t in the Conservative one, and it wasn’t in the Coalition Agreement. You’re not bound to implement it. Fight the good fight, Andrew, and come back from the dark side.
AlexKN wrote-
“There is a growing refrain from Lib Dem ministers that members have misunderstood this or that Coalition policy”
The leadership telling conference they do not understand, MPs telling members they do not understand, maybe so, but what the membership do understand is that higher echelons of the party are in increasingly out of touch which the rest and that voter support is decreasing the more the leadership support right wing Tory policies.
@ ad
“If the state stepped in a built more affordable housing it would add to supply and ease prices for everyone, although private building also needs to be stepped up.
I don’t think that it’s planning law that restricts this
Matt, If there were no planning restrictions I don’t suppose that house prices would ever go far above the marginal cost of building another house. So if house prices have rocketed in recent decades that rather suggests that the problem is planning restrictions.”
Prices rocketed partly becuase increasing demand, especially in the south-east, but also because of a credit bubble. Even though the price was high, the cost of taking out the debt needed to buy a house was cheap (if that makes sense). Plus, S106 obligations, basically a tax on new developments to pay for social housing and other things like schools and roads, added hugely to the cost and viability of developments. Insofar as this is planing law, you could say that this imposition slowed down new building by making it more expensive. But it wasn’t land use planning that forced prices up.
“But it wasn’t land use planning that forced prices up”
You haven’t given any evidence for that.
@ Matthew
You’re asking me to prove a negative but in any event, here we go: house prices doubled between 1997 and 2006. During this time, planning law stayed basically the same (there was the Planning and Compulsory Purchase Act 2004 but that didn’t take effect at a local level in the time period in question). However, credit became very easily available, and a lot of people entered the buy-to-let market. There was therefore a lot of money chasing those properties that were being built (there were fewer properties being built than in previous decades but that was because the state sector reduced its contribution to the total, which was a poltiical decision, not one based on planning). While you could take the argument to an extreme and say that if we had absolutely no planning controls we could built lots more, which is evidently true (and always has been), it isn’t actually planning that drove prices up – it was cheap credit and high rates of household formation, plus the decline of social housebuilding, plus, possibly, planning obligations (ie developer tax).
Let me save Grammar Police the bandwidth and denounce you as a Labour Troll!!!
You’re not wanted here – but neither am I, or anyone else who isn’t a Tory with a yellow rosette.
Can I please have my donations and the time I spent leafleting and canvassing back?
Oh yes, and my votes!
In `The time has come for a new alignment of progressive politics’-The Liberal Moment (2009) Nick Clegg wrote:
`Labour`s record on housing ,other than upgrading social housing stock,is dismal…. House building levels at one point fell to the lowest level since WW2..There are almost one million fewer social homes than in 1991 and the waiting list has rocketed to 1.8 million families.Labour has let down low income families—the very people who hoped Labour would protect them’
`Liberal Democrats would approach housing differently…allow local councils to borrow on their own assets to build new social housing and replace those council houses locally, bought under the right to buy’
I agree with all of this and ask is it now being put into practice?
@ patrick – yes, it is being made easier for councils to borrow to build, and that is to be welcomed. However, the sting in the tail is that the central budget for council housing is being slashed and council/housing association rents will rise to 80% of market levels, not 40% as currently. so it won’t be council housing in practice as it’ll be basically the same rent level as the private sector. oh, and throw in the likelihood that your tenancy will not be secure anymore, and will be only 5 years long (and will be not renewed if you’re earning too much to be deemed worthy), and you have to ask if it really counts as affordable housing.