Meanwhile fat cat landlords cream the cash
Paul Kershaw
Since the global financial crash of 2007-8 the lack of affordable housing has become increasingly acute for ‘the 99%’, particularly shattering the lives of young people and the poor with a relentless cruelty.
That is true internationally, in Europe and the US as well as the UK. Through this housing disaster workers are being made to pay for the capitalists’ crisis.
The number of households forced into the expensive and insecure private rented sector overtook those in social housing (housing association and council housing) for the first time last year according to the 2014 English Housing survey. The same survey shows 9.3% of private rented homes suffer from damp.
Private rents have rocketed, forcing people into overcrowded conditions and making the prospect of saving enough for a deposit to buy a house ever more remote.
Average monthly rental costs across Britain are on track to climb above £1,000 this year, according to property firm ‘Move With Us’.
Prices boom
In December, official figures showed that the average UK house price had for the first time risen above £250,000; about ten times median income and London house prices jumped 12.3% on average last year.
The boom has broadened out beyond London, with prices up in more than half the country for the first time in ten years, according to data from property researchers Hometrack.
The government has given prices a deliberate boost through its cynically misnamed ‘Help to Buy’ initiative.
Of course rising prices do not help people buy. In reality they want to boost house prices and please established home owning Tory voters.
At the start of the world financial crash the bursting housing bubble started the collapse. No wonder even bankers have condemned this policy, warning of a further bubble.
House prices multiplied six times between 1983 and 2007 and land prices rose a startling 16 times in the same period; it is easy for landowners to make money doing nothing.
This, rather than ‘red tape’ explains large ‘land banks’ where, despite planning permission, homes are not built.
Home ownership has fallen to its lowest level for 25 years and the English Housing survey shows that four in ten private renters see no prospect of ever owning a home.
The Joseph Rowntree Trust estimates that the number of people in their 20s with a mortgage will halve in the next five years.
In the past private renting in Britain was seen as a temporary stage with the dream of owning your own home at the end. That dream is now in ruins.
Building council housing has all but ceased since the 1980s and the infamous Tory ‘right to buy’ scheme continues to reduce the stock.
The number of relatively cheap, social rent homes has dropped by around a quarter in the last ten years.
In London, over 271,000 council homes have been sold off since 1980. More than a third of them are rented out by private landlords.
Housing Associations are building, but with disappearing grants and higher rents. The new category of social ‘affordable rent’ may be cheaper than private renting but is actually often unaffordable; far more expensive than ‘social rents’.
Rent controls
The distinction between housing associations and private landlords is collapsing as associations behave more like commercial corporations and private landlords can now access grant money.
The new ‘social’ arm of Grainger, the UK’s largest listed residential landlord, moved its first tenants into a development in Berewood, Hampshire last month.
High rents charged by private landlords, combined with the growth of low pay explain the rising housing benefit bill.
What a scandal that TV programmes such as Benefit Street try to direct the blame on tenants and benefit claimants.
Even some Labour politicians are now toying with some form of rent control. David Lammy, seen as a possible candidate for London Mayor, says he is considering it.
He is anxious to assure that he isn’t thinking of the rent control introduced under the pressure of the workers’ movement during World War One.
Perfectly accurately he points out that Chancellor Angela Merkel in Germany accepts the need for a form of rent control.
He assures us he wouldn’t want to interfere with landlords’ profits and wants investigations before action. But the housing emergency is a result of profit oriented policies over decades.
The boom in private landlordism dates from the Thatcher government’s 1988 housing act which cut security for private renters and removed rent control for new lets. That legislation is still on the statute books.
The housing emergency should be addressed by immediately reintroducing rent control which would not need new primary legislation.
When rents were deregulated the Tory housing minister was challenged about the impact of rising rents; he did not deny rents would go up but said that housing benefit would ‘take the strain’ – in reality increased profits for landlords would come from benefit money.
It is true that rent control alone would not solve the housing crisis; nationalising the banks and mobilising finance to build quality council housing to meet social need should follow.
Fundamentally, capitalism is the problem. All of the major parties support it. The Socialist Party and campaigners in the Trade Unionist and Socialist Coalition have a key role in establishing an alternative.
We campaign and fight for:
- Rent controls – a cap on rents in the private sector as an emergency measure
- Council run, not-for-profit letting agencies and full use of council powers to regulate the private rented sector
- House building and renovation – campaign for the government to divert its private developer subsidies to a mass programme of building quality council housing. For councils to use reserves and borrowing powers to build and renovate public housing now
- Bring all housing association stock and housing services back in-house – privatisation has driven up costs
- Axe the bedroom tax and reverse all housing benefit cuts
- Nationalise the banking system and mobilise the finance for a massive council house building programme.
- Nationalise the ‘commanding heights’ of the economy under democratic workers’ control and management – the basis of a socialist plan to ensure resources are directed to meet people’s needs.
Labour has little to crow about over housing. Between 1998 and 2010, when in government, Labour built only 6,330 council homes. Even the Tory Thatcher government managed to build 17,710 council homes in 1990.
Ed Miliband says he would emulate the 1945 government and build 200,000 homes a year. However, he doesn’t say how this modest programme will be funded and whether these will be council or privately owned homes.
- 1.7 million households remain on ever lengthening social housing queues
- 2 million households are in rent and mortgage difficulties
- 38,000 families live in temporary accommodation
- 62,000 are officially homeless
- Rough sleeping is up by more than a third since 2010 according to official figures
The average value of a house owned by a cabinet minister has soared by over £200,000 (19%) since the 2010 election.
The Camerons’ four-bedroomed house in Notting Hill, bought for £1 million in 2006, is now worth an estimated £2 million.
David Cameron rents it out for a cool £72,000 a year while he and his family continue to live rent free in Downing Street. He also owns a property in his Oxfordshire constituency valued at £1.1 million.
Welfare minister Iain Duncan Smith, who introduced the hated ‘bedroom tax’ last year, lives rent free in a £2 million Buckinghamshire mansion with four spare bedrooms.
An undercover investigation by the Daily Record into privately rented slum housing in Glasgow discovered “tiny rooms with barred windows that look on to a rat-infested courtyard, and we found blitzed men left unconscious in filthy corridors”.
Bellgrove Hotel owners, fat cats Ron Barr and Kenneth Gray, are creaming more than £1.5 million a year in housing benefit for such squalid accommodation.
The enormous gulf between the social classes in London widened further as recently published figures showed that average home prices surged by more than £8,000 last month to hit a new record high of £409,881.
The average London home went up in value by more than £40,000 in the year to January – around a third more than the average London salary – fuelled by overseas billionaires buying up property portfolios thanks to the Con-Dems’ liberal tax regime.
