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From The Socialist newspaper, 23 April 2014

Why is there a housing crisis?

Housing emergency!

Housing emergency!   (Click to enlarge)

Caroline Vincent

The Daily Telegraph predicted that 2014 will be another profitable year for homeowners, suggesting that "the spring could be a great time to go for that investment-cum-country-house you have had your eye on."

What a luxury for a privileged few, to be able to snap up another property, sit back and watch the value soar! A stark contrast to the situation that most of us are facing.

Homelessness in England has increased by a third since 2010, and home ownership is now at its lowest level in 25 years.

Most building companies are proud of their massive and rising profits. But while profits may be increasing, output in the building sector is 11.3% below its pre-crisis peak.

Last year only 109,370 new homes were built in England, when 240,000 new homes a year are needed in order to meet demand. The consequence of this shortage of homes is sky high rents and house prices.

Renting used to be seen as a temporary stage before getting on the property ladder, but with house prices rising twice as fast as wages, the chance of becoming a homeowner is now little more than a dream for most people.

Currently rents take up an average of 50% of disposable income, a trend that is only likely to worsen.

Moreover, the number of housing benefit claimants who work has risen by 104% since 2009, which says a lot about intensifying exploitation and casualisation in the workforce.

Housing benefit

24 billion pounds of taxpayer's money a year goes on housing benefit - most of which is going in the pockets of private landlords. Providing council housing with genuinely affordable rents would reduce the bill.

It is also well established that money spent on house building stimulates economic growth faster than any other industry - every 1 spent on housing generates 2.41 in the wider economy, and every new home creates 2.3 jobs.

There are factors other than alleged red tape that can block house building.

'Land-banking'

While the working class suffer, profits roll in for the rich, with land prices having grown by a factor of 16 between 1983 and 2007.

This has led to the super-rich engaging in a practice known as 'landbanking', creating a situation where homes are not built despite the existence of planning permission.

Such land is then sat on until such a time as it can be built on even more profitably.

A report for the Greater London Assembly in 2012 revealed that 45% of homes for which planning permission had been granted would not be built because the companies that secured them are not in the building business!

Few believe the Tories lies, but the week before David Cameron's arrival at Downing Street in 2010, speaking on the topic of social housing he boasted: "The Conservative position... is very clear: we support social housing, we will protect it, and we respect social tenants' rights."

This 'support' obviously doesn't stretch as far as to actually provide social housing, as growing waiting lists illustrate - some 4.5 million people and counting.

The government's affordable housing budget for 2011-2015 has been almost halved. The social rented housing model has now been dropped in favour of an 'affordable rent' tenure.

New homes built will be let at up to 80% of local market rents with 'flexible' tenancies of a minimum of two years instead of secure lifetime tenancies.

This is just the latest in a long line of attacks. The Tories' 1996 Housing Act replaced a homeless person's legal right to permanent accommodation with temporary housing for up to two years.

Stock transfer

This vicious attack was then followed by New Labour's demunicipalisation of social housing through 'stock transfer' to housing associations and by acting to expand the role of private providers and finance in this sector.

The 2011 Localism Act brought about by the Con-Dems has given teeth to the Tories' 'big society' vision of privatisation and charity-based welfare.

The housing crisis has again been framed in such a way that blame has been shifted towards so-called 'scroungers' putting a drain on society.

House building should exist to provide shelter for all, but under capitalism, as with any other industry, the main aim becomes to make money for those at the top. Why would big business worry about providing roofs over people's heads if there is no profit to be made?

Our demands on housing include:


No need for afforable homes

■ Milton Keynes Tory council leadership has criticised the government for scrapping the requirement for private developers to build affordable homes, saying: "People won't be able to afford to live in Milton Keynes".

Deputy leader of the council, David Hopkins, wrote to the planning minister saying the government must drop the policy "that unfairly and inappropriately favours the interest of developers over the needs of present and future residents."

■ Separately, after questions in parliament the planning minister admitted that the government's new garden cities will not have to include any affordable homes at all.


Fighting anti-union housing bosses

Bryan Kennedy, convenor for Unite the union at One Housing group spoke to the Socialist.

I have been suspended from work since 12 February. I could well be dismissed at my hearing on 23 April (after the Socialist goes to press - Eds).

Last year I led a strike for eleven days which managed to stave off pay cuts and also won compensation payments.

We were about to launch a campaign - not for a living wage, but for a minimum wage, for night staff who were on 3.79 an hour! The day after, I was suspended from my workplace.

They came up with a lot of charges that were dropped but after a massive fishing trip, came up with other charges after I left.

One Housing builds 4,500 flats a year in London. That's a licence to print money so they make huge surpluses.

Their care and support section is also expanding fast mainly by cutting pay to undercut other providers.

After they took over a stock transfer group in Tower Hamlets, One Housing sacked the convenor, a member of Unison, openly saying the union was subversive of their 'corporate agenda'. They don't worry about the notion of unfair dismissal.

One Housing say Unite is political but CEO Mick Sweeney has spoken at Tory party conference and invited Theresa May, Boris Johnson and other top Con-Dems to speak at his own conference centre.

We made tangible gains in our workplace and our union branch grew fivefold, so we are not just accepting this attack.

Workers in One Housing have shown they want a voice by joining a union and supporting their convenor by striking against my dismissal.

We can't let them get away with anti-union behaviour again and again. We want people in the trade union movement to support us.

If an employer that claims to be the tenants' friend treats its staff so badly, you wonder what kind of advocacy they are giving their clients.

Our protest is called I'm Bryan (www.housingworkers.org.uk) which has t-shirts, wristbands and determination and will carry on fighting whatever the 23 April hearing decides.


End rip-off letting agents fees

Iain Dalton

Anyone who's lived in private rented property probably know its problems such as poor quality, high rents and short-term tenancies.

Shelter's 2013 report, Letting Agencies: the price you pay, exposed the sky-high fees letting agencies were charging just for 'arranging' a tenancy.

Around nine million people in the UK rent their homes privately, but the turnover of housing in this sector is high.

Increasingly, properties are let or managed by letting agencies on behalf of landlords, partly due to the boom in buy-to-let mortgages. There are now over 15,000 letting agencies in the UK.

These agencies charge landlords a percentage of rent for their services but also charge tenants upfront fees.

The bewildering variety of fees includes admin charges, credit checks, inventory checks - plus renewal fees if you want to extend the tenancy between the usual one year length or cleaning charges levied after you leave.

The average letting fee last year was 355, but one in seven was charged over 500 when the weekly average rent for a property was 164. On average tenants are charged for three fees - 38% are charged for four or more.

Profit

Understandably, many people struggle to pay these as well as their deposit and first rent instalment. 27% of those using a letting agency had to borrow to cover the fees. 17% cut down on food or heating to pay the fees. Rents too increased, on average by 300 a year.

Private sector landlords don't let properties to tenants from the goodness of their hearts, they aim to make a profit.

Tenants' needs are secondary to this. We need a massive council house building programme to create quality affordable housing.

This would really meet tenants' needs.

Why not click here to join the Socialist Party, or click here to donate to the Socialist Party.


In The Socialist 23 April 2014:


Socialist Party news and analysis

Hungry Britain: Fight for jobs and a living wage for all

New figures reveal capitalism in crisis - not recovery

Scotland: Capitalist 'Project Fear' backfiring?

Why is there a housing crisis?

Zero-hour contracts damage your health

Them & Us


International socialist news and analysis

Building Socialist Alternative in the United States

China: labour disputes soar


Trade Unionist and Socialist Coalition

Over 550 TUSC no-cuts candidates in place


Socialist Party workplace news

Every job matters: Support the Tube workers' strike

Care UK workers stepping up the action

Don't let Gove wreck education!

Rail workers prepare for action

CWU conference: Renationalise Royal Mail!

Workplace news in brief


Readers' comments

In the fight to defend our NHS, know your enemy

The Broad Left Organising Committee

Workers' Memorial Day: strike for safety

25 years after Hillsborough


 

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