Opinion: 4.5 million people are waiting for homes – let’s not leave them behind

David Cameron’s recent comments on council housing tenancies have sparked some controversy in the media and here on Lib Dem Voice.

First, I am delighted that at least there is a debate around housing policy. Many people are simply unable to afford to buy, leaving people in cramped overcrowded accommodation that is harmful to their and their family’s health. There are still many people sleeping on our streets and many more in homeless shelters and temporary accommodation.

I’ve seen both ends of the crisis. Ten years ago I was homeless myself and went through the shelters to temporary accommodation until I was allocated a council flat. When I got into university and got elected to Oxford City Council I decided that given the horrific shortage in my home town I would give up my secure tenancy and rent privately. That was an easy decision for me; for many others with children and dependents, or those who have not been so lucky, it is not. It goes without saying that plans to review security of tenure, or levels of rent, will cause numerous problems, not least ghettoising many communities as concentrations of some of the most vulnerable in our society.

Unfortunately the debate has missed a much bigger issue, and indeed the more cynical may view Cameron’s comments as somewhat of a deflection from the fundamental problem.

There are 4.5 million people waiting for homes. You can do as many clever things as you like around temporary accomodation and the private sector, around introducing choice in allocations, or cutting times that council homes are empty. I should know; as housing portfolio holder in Oxford I did those things. But fundamentally it’s all re-arranging deckchairs on the Titanic. We need more affordable homes, and we need them in the areas where people want to live and work, and the areas where the lists are longest.

We need all types of housing: social rented, as well as other forms of affordable housing – shared ownership and community land trusts, for example. The Coalition Government has not yet grasped this thorny problem. Labour built fewer homes than any government since the Second World War. They forced councils to transfer their stock out of public control. They certainly didn’t have the answers, frequently caving to Nimby lobbies.

Unfortunately the Liberal Democrats seem to be going down the same route in their partnership with the Conservatives. The abolition of Regional Spatial Strategies (RSS) is understandable, but often they were the only way in which councils which did not want to build new homes were forced to do so. For a city like Oxford, with a huge housing need and homelessness problem, the RSS had offered some hope: 4,000 houses were on the cards to the south of the city. Our determination to protect Green Belt land at all costs, no matter what human suffering is caused, has left many people in Oxford with little hope.

The complex arrangements governing the calculation of housing benefit have been changed, leaving many people with less benefit to pay the rent in the private sector homes that councils have placed them in, in an effort to cut expensive temporary accomodation. Many will become homeless as a result.

What happens then? Well, they come back through the council’s doors, and are put in even more expensive temporary accommodation, immediately negating any potential savings from this move.

Bizarrely, there seems little consideration of housing benefit tapering, whereby as tenants start working they are still given some benefit, meaning they can still afford to live in their homes. This move would get more people off benefit and into jobs more than any penalising of those looking for work will ever do. Housing benefit is often the reason many people simply cannot afford to work.

I should know – when I was in temporary accomodation my rent was almost £300 a week, and there was no job that I could get that would pay that rent (especially with the two-year gap in my CV from being homeless and trying to put my life back together). If I had worked, I would have been made homeless. Clearly the Coalition Government does not yet understand this trap.

There are policies which have been agreed that will help the imbalance between supply and demand. Of course, making use of existing stock through refurbishing empty homes will make some difference. But there are many areas of high housing need where there are few empty homes, and many empty homes are not in the areas where people want to live and work. High speed rail can help spread economic growth around the country, helping people to get jobs and making better use of existing stock.

Buried in adopted Liberal Democrat policy papers are some excellent answers.

Replacing the right to buy with a right to invest would stem the thousands of homes that are lost from social housing stocks every year. Community land auctions would allow some greenfield development for affordable housing to happen. For areas like Oxford, with few brownfield sites and 50 year-old Green Belt boundaries that choke the lives and opportunities of less affluent residents, that policy could offer a real solution.

Where are these policies now? We didn’t even campaign on them during the election, so not everything can be blamed on the Conservatives!

Ultimately, though, it comes down to the numbers. Unless we build more affordable homes, with the right infrastructure and integrated into existing communities, then many people will be left behind. The result of the current Coalition policies will be more over-crowding, more misery, and more people sleeping on our streets. And that should not sit easy on the conscience of any Liberal Democrat.

* Patrick Murray is a Liberal Democrat city councillor in Oxford where he is deputy leader of the group.

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  • Patrick has confirmed my suspicion that housing benefit is the most intractable aspect of the benefits system just because the sums of money involved are so enormous. It was introduced by Margaret Thatcher after the Right to Buy legislation started to decimate council housing stock as a way of reviving the privately rented sector which at that point had virtually disappeared, but in order for a landlord to get a worthwhile return in areas of high house prices housing benefit has to be set at levels which make it almost impossible for recipients to avoid being caught in the poverty trap. If someone gets temporary or sporadic work they virtually have to do it under the radar because if they declare it their benefit is suspended or cut while their new circumstances are investigated: the real world moves on much faster than council bureaucracies which means that tenants can easily find themselves unable to pay the rent for periods of time, which tends to aggravate landlords. I have not seen any of the political parties come up with a solution the problems caused by housing benefit, probably because it would entail a switch away from the privately rented sector back to massive investment in social housing.

  • David Thompson 11th Aug '10 - 7:37pm

    Agreed, this is an excellent and timely piece. Thank you.

  • Blimey, a Lib Dem Voice post I agree with, I need to go and lie down

  • Hurrah – a post calling for more housing!

  • Andrew Shuttlewood 11th Aug '10 - 10:10pm

    I’ve posted this before (and probably had holes picked out in it), but why not simply have a system where earnings are paid into a government managed bank account (we have a couple of banks hanging around, and I’m sure other banks would be happy to help) where for every pound paid in by your workplace, you receive 60p or so of it. The remaining 40p would cover the difference in benefits. Thus benefits would never be cut, per se, and work would always pay. Every year or so, the inland revenue could provide any overflow back, either in a lump sum (or possibly more sensibly) via an adjustment to the amount retained.

    This way, doing more hours means you wind up with more money in your pocket, and work going slowly doesn’t affect your benefits or mess them up. It could cover housing benefits as part of this.

    Obviously there are risks with this approach, but surely the government could try it in an area with lots of unemployment, coupled with special tax rates for businesses hiring people, either temps or full time (with more breaks for full time employees), to try and increase the number of people working. It would also, for those on the system provide a useful backstop.


  • patrick murray 12th Aug '10 - 7:23am

    Firstly, thanks for all the kind comments.

    A little addendum if I may…

    As I see it there are two big problems with camerons idea. Firstly, the point I raised in the piece is that if you review tenancies then social housing becomes only for those in acute need. You develop areas of high concentrations of very vulnerable people, many with chaotic lifestyles which would be awful places to live in. Coupled with high turnovers of tesidents this would destroy all sense of community and stability.

    Second though is that its somewhat of a false premise. You do get mobility within, and out of the stock, primarily through right to buy. The problem with rtb is that when people leave they take the home with them. Traditionally councils have not received the receipts, but even with that change you still need the land to build on, meaning that for areas with high housing need but limited land it doesn’t really help. Thats why right to invest is do much better; it retains stocks, security of tenure and allows for successful tenants to either get an equivalent security as owning a home, or keep pace with the market if they do wish to buy.

    On the benefits point this is a massive problem. The biggest challenge I found was not on the streets, but in temporary accomodation. At present if you work more than 16 hours you lose all your benefits so you end up back where you started. The raising of the tax threshold is a great help but if benefit tapered off as you went up in hours then you would be able build back your confidence in work. So many people I’ve seen get caught in this trap and end up either falling backwards or losing all confidence and ending up on benefits for years, even though they want to work. There was a pilot a few years back, I think somewhere in london, of a rent waiver scheme for temporary accomodation that sought to deal with it, but councils are now placing people direct in the private sector to you need a combination of both. That would get people who want to work back into the mainstream, encourage ambition, and cut overall welfare bills.

    The most perverse element is that many of these houses are former rtb properties that were sold on. Effectively council housing has been sold off and private landlords are profiting massively with rents 4 or 5 times higher. It’s those in housing need who lose out.

    That said the idea Andrew outlines looks good as well.

    But yeah, the central point is that we do need massive investment in new homes.

  • An excellent piece.
    It’s been awful to see so much righteous indignation poured out over the issue of council tenancy, while nobody seemed to think about those 4.5 Million. Is it too cynical to think that somehow people don’t expect those 4.5 Million to vote in large numbers? I think it’s despicabl to just forget about them, and this article is the first piece I have seen that actually focuses on this problem.

    I know I am risking to sound like a broken record – but another thing that keeps being overlooked is the private rental market. We need new laws to givern this along continental lines. Tenants need some security of tenancy in the private market also, and there has to be some sort of protection of unreasonable rent rises.

    As long as this is not tackled together with the other issues raised here, I don’t think we’ll be able to solve the problem. Even IF the housing market crashes, buying won’t be the best solution for everybody, and I an just fed up that everybody just assumes as a matter of fact that it is.

  • *apologises for typos*

  • patrick murray 12th Aug '10 - 10:02am

    Maria – absolutely agree on private rented. We did a lot of work in. Oxford to improve quality and management, but rents are still a huge problem. Didn’t have room in this piece bit maybe one for the future!

  • Matthew Huntbach 12th Aug '10 - 11:44am

    When Mrs Thatcher’s government brought in the “right to buy” for tenants in council housing, I wrote to the then housing minister, Ian Gow, saying that while this was nice for existing tenants, I would like to know how the next generation of people who could not afford to buy housing would be housed – particularly in places like the Sussex coastal towns (Gow was MP for Eastbourne, and I was running Brighton and Hove Young Liberals along with one Carina Trimingham – wonder what happened to her?) where house prices were high but wages low. Gow wrote back saying I shouldn’t worry, because the housing would be still there whether privately or council owned, so I was being silly to suppose there would be any problem.

    25 years later, who was right – me saying I thought it would lead to big problems, or Gow saying it would not?

    If housing is on the market and someone who wants to buy it to rent it out is willing to pay more than the top price affordable by someone who needs it to meet their housing needs, then it will go at that higher price to the buy-to-let merchant. The person who cannot afford to buy their own housing to meet their needs may then rent it. Housing benefit will pay the costs, so the buy-to-let merchant pockets the profits. This is money taken from the taxpayer and given to the buy-to-let merchant as pure profit, with private rents typically twice or more what the equivalent property is rented out for at cost price if it is still council owned. In some cases you can see this in almost identical properties, one next door to the other on a council estate, one still council owned and let, the other having passed through right-to-buy to buy-to-let.

    Isn’t this quite obviously crazy? How much of those big cuts the government is making to cut the deficit are needed in order to pay pure profit to buy-to-let people thanks to the Mrs Thatcher’s right-to-buy meaning there is no cheaper council house alternative?

    Yet even now we have had to fight tooth-and-nail to get the ADDITIONAL profits made by buy-to-let in the shape of capital gains taxed even at the same rate as the tax people who work for their money have to pay on their wages. The Conservatives and their friends in the newspapers tell us that raising Capital Gains Tax is an attack on hard work and enterprise. What utter bollocks. Before the election they made a big thing about being opposed to “jobs tax”, after the election the Conservatives showed by their opposition to CGT rise that they preferred a jobs tax to a tax on making pure profit through nothing but being rich enough to buy something and then sitting on your bum owning it. Why have we heard nothing about this, except misleading attacks on the Liberal Democrats from the right-wing and the bulk of the British press for our line on CGT? The reason is that the central purpose of the Conservative Party is not at all to promote reward for hard work and enterprise, it is to defend money gained by the rich for anything which is NOT work. Anything else is window-dressing for that central aim. The right-to-buy worked excellently for this because it brought more people into making money by sitting on their bums, enabling such people to be drafted in to oppose, through the usual “attack on the middle classes” line (when you see this in the right-wing press, it means some measure that would be detrimental to the wealth of at the very most the wealthiest 10% or so of the population, sometimes the wealthiest 1%), any attempt to switch taxation away from income made through work.

    I am making this point again and again because to me it is obviously just about the most central issue in British politics, yet no-one seems willing to acknowledge it.

    Because housing has become a prime investment vehicle in Britain, the profits that can be made from it are a strong reason why people hang on to more of it than they need. Because a buy-to-let merchant with a large cash deposit is always a better bet for the lenders than a first time buyer scraping to “get on the ladder”, and because the investment potential means a buy-to-let merchant can outbid a potential first-time-buyer and in effect force that person instead to rent privately, profits to buy-to-let, we cannot build our way into satisfying housing needs.

    Those right-wing headbangers who fill the comments on this issue here and elsewhere are wrong. They want us to concrete over our country simply to provide more gambling chips in the housing market with gives the illusion of making money for the masses but is actually a transmission belt of wealth to those at the top. It is the prime way of making ordinary people work and the rich take the profit from that work.

    The simplistic economic theorems which these head-bangers are using are doled out to us by the press – owned by very wealthy people – to make us conform. These headbangers are little conformists, little creeps who take up and spout the ideology of our masters as if it is true wisdom. Or as Lenin, who similarly had simpletons who would spout out and support his ideology, sometimes not realising who it was they were ultimately working for called them, “useful idiots”.

  • Dominic Curran 12th Aug '10 - 12:39pm

    An excellent piece, Patrick. I agree with every word. Will supporters of this view – of which there are many judging by the comments – now get a motion passed at conference calling for more house building, and get this up the agenda?

  • Matthew,

    I don’t disagree with the thrust of your post, but I have one or two comments to make about your blanket denunciation of buy-to-let landlords.

    (1) I know several buy-to-let landlords personally. They are not rich rentier capitalists, they are middle-class people who have money to invest and realise (correctly) that real property is a safer investment than shares and more lucrative than gilts.

    (2) I am not aware of any buy-to-let landlord who would let their properties to Housing Benefit tenants. Most agencies operate an absolute bar on “claimants”, and landlords usually insist on a commercial credit check. It is the Nicholas Van Hoogstraten kind of landlord who buys up run-down property and keeps it run-down and enthusiastically profits from Housing Benefit.

    (3) As far as I know, most buy-to-let landlords have mortgages.

    Adam Bell,

    Which bits of the Green Belt? A colleague at work recently assured me that there is “loads of vacant land in Surrey”. So I asked him: “Where?” I struggle to think of any vacant land in Surrey, ie, land that is presently unused and whose development would not cause an almighty outcry – and my colleague was unable to identify a single site. Disused hospitals and lunatic asyla are usually good bets, but Warlingham Hospital was developed only recently, and I don’t think Brookwood is closing any time soon. In 1986, the Thatcher government hinted (only hinted) that it might be prepared to relax the Green Belt. The result was a flood of ambitious planning applications, such as 1,000 houses in East Horsley, and the “Elmbridge Mall”, and the hint was retracted pretty damned fast. There actually is some low-grade Green Belt land that is presently under-utilised and has little or no amenity value. Some of it is in Kent and Essex along the Thames Estuary, and some of it is around London Airport. The latter is retained within the Green Belt in order to facilitate the Airport’s expansion (and it unlikely to be redesignated for that reason).

  • Matthew Huntbach 12th Aug '10 - 10:38pm

    Sesenco, on (1), yes, but the fact remains that because they can pay more to buy property than can those in need, their existence pushes up house prices beyond the reach of those in need. They are making profit through the rent and profit through capital gains through doing nothing but being rich enough to buy the property in the first place. They are not putting their investment into anything entrepeneurial. All this has a cumulative effect.

    On (2), I lived in a block of flats which were gradually bought up and let to people on benefits, and I’ve seen large amounts of it elsewhere around where I live. Maybe you live in a posher place than I do so you haven’t seen it. It’s big money. Housing benefit actually makes these tenants a very safe option – the money goes straight to the landlord. The property doesn’t have to be run down, it’s generally the sort of stuff that wouldn’t appeal to high-flying yuppy types however. So former council property coming into the market because the kids bought it in granny’s name under RTB and flogged it off at a profit when she died fits the bill well. If you’re a buy-to-let merchant running this sort of property, you expect it to be smashed up when the tenants leave, so you furnish it very cheaply. You need a tough skin to deal with the complaints coming from the neighbours, but hey – it’s big money. My wife was frequently in tears from what we experienced from the benefit tenants opposite us, and we ended up having to move on police advice.

    On (3), yes, and so? They let out at rents above that mortgage to make a profit to people who couldn’t get that mortgage themselves. The result is house prices being pushed up beyond affordability by the very people who then profit from renting them out to the people so squeezed out of buying.

    Now, I’m not opposed to private renting. There is a place for it, being a private tenant is a good option if you’re at the time of life when you’re often moving, and I can accept a certain level of payment to landlords for shouldering the overheads and risks of ownership. I’m noting, however, that it’s moved beyond what it used to be, and there are now big-time players making a lot of money from it. The running down of council housing is feeding into it as people who once would have got council tenancies are now forced into the hands of those of who Van Hoogstraten is only the most notorious.

    In some ways, however, it is the now normality of owning several houses and renting them out that is driving the market upwards, so actually it is your no. (1) people who are the problem. Each individually is doing no harm, multiply them by millions and it’s a problem. This is a recent thing, but the more we see of it the more it will be a problem. If it gets to the point where the norm if you have a few £100,000s of money to put buy is to by a house with it, maybe not even bother with letting it out, just have it empty as your savings, there’s the issue. As you say, it;s safer and more lucrative than anything else, so why not do it? The fact that it leads to us needlessly concreting over our green land in a fruitless attempt to “build to meet demand” can like much else be put aside as someone else’s problem.

    The fact that the head-bangers can’t even see this as an issue, can’t even understand the point says a lot about them.

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