Link to this page: https://www.socialistparty.org.uk/issue/219/9164
Workers Priced Out By Housing Crisis
A HOUSING crisis is developing across England and Wales, warns a report by the National Housing Federation.
The average price of a home is £117,398 but a worker on the average wage of £21,842 can only get a mortgage equal to three times their salary - about £60,000.
In London things get even worse. In conditions similar to the housing boom of the late 1980s, prices have risen by as much as 37% in the last year, fuelled by speculators, big City bonuses and a general housing shortage.
This is the result of the Tories' disastrous housing policies of the 1980s and the failure of councils to build any new houses. The only council to do so was Liverpool city council between 1983 and 1987, under the control of supporters of Militant, predecessor of The Socialist, which built 5,500 new houses.
Now we have a New Labour government hell-bent on privatising council housing. Workers are being priced out of the capital and large areas of the south-east.
According to the Centre for Economics and Business Research workers earning £23,000 in London have £360 less to spend than those in Yorkshire, despite earning £3,800 more.
This is having dire consequences for services in London, vacancy rates in some social services departments are running at 50% or more in some specialities and there are shortages across all key services.
The government has set up a Starter Home Initiative, putting a derisory £250 million into the scheme over three years. Its average grant of £25,000 would make no difference to someone living in London.
In an area of relatively cheap housing like Walthamstow, a two-bedroom house is over £120,000. Even with a grant of £25,000 this would still be out of reach to a person earning less than £30,000.
If this is true for relatively well-paid workers, then things are even worse for the low-paid, cleaners, ancillary workers, shop workers etc.
House prices are so inflated that some analysts warn of a crash like that of the late 1980s where thousands were left with negative equity.
This is the consequence of allowing housebuilding to be dictated by the market. The private sector is failing to meet people's needs.
Over a million privately owned houses are standing empty in England and Wales. There should be a national audit of housing need and a survey of housing stock.
Most of all, a house building and repair programme should be implemented aiming to supply everyone with decent, affordable accommodation.
In The Socialist 31 August 2001: