The housing crisis - a toxic issue for the Tories

March for Homes, 31st January 2015, London, photo Paul Mattsson (Click to enlarge)

Almost everyone acknowledges there is a major housing crisis in the UK. As Paul Kershaw (Unite the Union housing workers branch LE1111) explains, a chronic lack of affordable housing has been made worse by the government's attack on social housing. Millions of households find themselves at the mercy of the private sector, where landlords and property developers are making vast sums. Worse still, as the two companion articles show, is the plight of homeless families. But workers and tenants are fighting back and have forced some concessions out of the Tories.

The government has retreated from enacting the 'tenant tax' or pay to stay proposals of their misnamed Housing Act. This is a relief for social housing tenants who could have been pushed out of their homes and represents a real victory for campaigners.

In a further sign of weakness the government has also delayed 'right to buy' for housing associations until at least 2018. It's clear that the hated housing act is in deep trouble.

The Tories understood that the housing crisis is a toxic issue for them. House building is at an historic low, private rents continue to rocket upwards and homelessness is rising by any measure and the benefit cap is clobbering families.

The potential for a grass roots movement resisting pay to stay around the call 'can't pay, will stay' is dangerous for them.

Unaffordable

However, many damaging measures in the act are still moving forward. No new secure tenancies will be issued for council homes creating more instability in working class communities. And changes to planning regulations will make life easier for property developers.

In an important move housing associations will be deregulated 'freeing' them to serve the banks and investors without restraint; tenants beware!

Housing associations own a majority of social housing in England. Deregulation means they will now be able to sell social housing on the market or change it to market rent without seeking 'consent' from a regulator.

In the Autumn Statement they pledged an extra Ł4.7 billion for affordable housing. For most of us that sounds like a lot of money but it is hopelessly inadequate for people struggling to find an affordable home.

The Tories have slashed spending on 'affordable' housing in recent years and only Ł1 is spent on affordable rented homes for every Ł20 spent on subsidies for home ownership initiatives such as the misnamed 'help to buy'.

Help to buy is unaffordable to most young people, although Tory MPs have used the scheme to buy investment properties. It pushes up house prices and acts as a support to private house builders.

In 2012 there were almost 40,000 social rented homes completed in England, a terribly low figure in historical terms, but in 2016 just 950 social rented homes were started.

Last year housing associations actually transferred 4,406 social rented homes out of the sector, and that is before deregulation. Associations justify their record surpluses of Ł3 billion last year on the basis that surpluses help them build homes; but what kind of homes?

The new Clarion housing association, (a merger of Circle and Affinity Sutton housing associations), announced a Ł1.1 billion land buying programme to build 50,000 new homes. But they say that the proportion of affordable homes built will fall from 85% or 90% now to just 65%

'Affordable' can mean unaffordable home ownership schemes such as 'help to buy' or rents as high as 80% of market rent.

For decades investment in social housing has been cut. Private builders were supposed to fill the gap but this has not happened. Big house builders have been increasing their profits (see fact box) but not the number of homes built.

Meanwhile they say that they cannot afford to meet local authority requirements to build a proportion of social housing in new developments. On top of this, they complain about a shortage of skilled labour.

They are concentrating on 'high end' homes and pleasing their shareholders, not on building desperately needed affordable homes and not on investing in decent apprenticeships.

Profiteering house builders are part of the problem not the solution. They should be nationalised and re-organised to provide quality affordable homes and train directly employed workers.

Mass council housing

A significant part of the enthusiasm generated by Jeremy Corbyn's first leadership campaign came from his call for mass council house building.

But Labour's right wing shadow housing minister John Healey commissioned Peter Redfern, boss of house builders Taylor Wimpey, to produce a report on house building. Not surprisingly the report does not identify the house builders as a problem and he calls for a 'bi partisan' approach to housing.

Far from making Labour more electorally attractive Labour is missing opportunities to apply an anti-austerity approach to housing.

Labour local authorities should halt 'social cleansing' regeneration schemes that result in reduced social housing. They could use reserves to set legal 'needs budgets' and build council homes. They should also demand no loss of social housing through housing association disposals or tenure transfers.

Opinion polls show overwhelming support for rent controls. Labour should link with private tenants to campaign for real rent controls, setting a realistic level for rents not just restricting the rate of rent increase.

There can be no housing crisis solution that does not start with a massive programme of council house building. This call should be a central demand. The casino banks will not be an adequate source of funding for this; they must be nationalised.

Buy to let landlords earning returns of 1,400% since 1996 outperformed shares and bonds
The average landlord can expect almost Ł60,000 a year from rent payments, more than twice the average wage of Ł27,174
Over the past three years the revenues of the top nine housebuilding firms grew by 76% and profits by 200% and profits for the five biggest firms rose from Ł372 million in 2010 to over Ł2 billion by 2015, a 480% increase
Almost half of this went to shareholders rather than being re-invested and just eight directors working for major house builders together 'earned' Ł230 million in the last five years

Butterfields Didn't Budge

How tenants on one east London estate saved their homes

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