THE FINANCIAL crisis is adding greatly to people’s problems in getting decent housing. Despite prices of houses and flats falling at present, the previous huge price rises coupled with less disposable income and more expensive mortgages have made it harder for potential house buyers to enter the ‘homes market’.
Private rents have not yet fallen significantly and there is a massive shortage of council housing. And this lack of affordable housing could well get worse. Even when the present crisis was just seen as a minor ‘credit crunch’, total new house building had almost shut down. Only half of the 185,000 new homes planned are being built this year.
More people are also losing their homes. It has been estimated that there will be 45,000 repossessions in Britain this year. One in 150 homeowners is already at least three months behind on their mortgage repayments. Jim Lowe of North Devon Socialist Party looks at the housing crisis’ devastating impact on his area.
ON 6 October, The Guardian reported that the number of house repossessions in south-west England has increased dramatically. It reports: “One repossession and eviction court in Penzance, Cornwall, raced through 50 cases in one morning recently. In Barnstaple, Devon, the last repossession court heard 26 cases – more than double the number before the credit crunch.”
The repossession situation is worse in the south west, largely because the area’s below-average wages and above-average house prices create an outrageously high ratio of average house prices to average wages. Also, the ‘average wage’ is heavily skewed by a small number of very high earners.
High house prices
Nationally there have been, until recently, very high house prices. One reason for this is that the supply of council housing has shrunk dramatically over the past 25 years, due to the Thatcher government’s ‘Right to Buy’ scheme, the privatisation of many council housing estates and the lack of funding and legal opportunities for local authorities to build new houses.
Also the number of houses available for sale was reduced by the buy-to-let market. Cheap and easy credit enabled some people to buy up swathes of housing and rent it out to recoup the mortgage costs and make profit.
On top of these factors, locally, the attractiveness of the area and the enrichment of a small section of people in the Thatcher-Major-Blair years led to a boom in second home ownership, further reducing the number of houses available. This allowed sellers and estate agents to hike up prices.
Despite all this, the undesirability and insecurity of private rented accommodation and the lack of council housing led many people to buy their own homes.
Homelessness
But low wages, high house and flat prices, combined with the (now ended) willingness of the banks and other financial institutions to lend large sums of money to low-waged people (the so-called ‘sub-prime’ mortgages), mean that more and more people are now losing their homes.
More people now either live with relatives, in temporary accommodation or become homeless.
The solution will not be found in the City of London or in parliament, where the Tories and New Labour have been waging the class war fiercely on behalf of the capitalists and their rotten system. The measures taken so far in the economic crisis show that clearly.
Nothing is done to help people turfed out of their homes, yet the banks are ‘nationalised’, to rescue banking fat cats and the financial system.
They are deemed ‘too important to fall’. Most of the financial wizards who made the mess will keep their mansions and holiday homes and workers are expected to pay for the crisis.
People struggling to pay their mortgages should have the option of having their house transferred to the ownership of the local authority, who would be obliged to rent the house at a low rate to them with total security of tenure.
There should be a national council house-building programme, funded from central government but carried out by local authorities. Local people should have a democratic say in how new housing developments take shape.
Community facilities should be provided, including transport links, general stores, a post office, GP surgeries, health centres, schools and amenities.
The building industries should be nationalised and placed under the democratic control of the workers in that industry and the public as a whole.
With the above measures, in a major break from current practice, new houses and flats would be built to meet people’s varied needs, not just to make vast profits!