On Thursday 7th May 2015 the UK went to the polls and the Tories, against all predictions were returned with a working majority.
The very next day the Department of Communities and Local Government led by Eric Pickles in the coalition government, published figures which revealed that a scandalous 635,000 homes in England were lying vacant. (1) Talk about burying bad news!
Then in the Autumn the Ministry of Defence, who have talked of a property crisis for retiring veterans, were forced to reveal by a Freedom of Information request that 10,000 of homes owned by them were either idle or even lying derelict. (2) This has been a long running issue which no government wants to address, In 2009 the MOD was forking out £67 million in rent to private land lords for it’s employees because of lack of habitable dwelling in it’s own estate. (3)
It is interesting the note that the “hotspots” for vacant properties are not in low income neighbourhoods. 29% of houses on the Isles of Sicily are unoccupied for six months of the year or more. According to research by the soon to be defunct Independent newspaper, “Other hotspots for empty homes include the City of London and Westminster, but most are in coastal areas such as North Norfolk, Scarborough and Pembrokeshire and are linked to holiday homes”. (4)
These figures of vacancy are mirrored by a 25% rise in households containing six or more people as a combination of low pay, high rents and the impossibility of getting onto the housing ladder for many sees more and more young adults remaining in the main family home, sometimes with their own spouse and kids.
Unsurprisingly the crowding issues arise in stellar opposite to the areas of vacancy, with the London Borough of Newham joining Bradford, Birmingham, Tower Hamlets and Camden topping the list. British Asian families are disproportionately poor and and are hit hard by over crowding as it is a classic class based issue.
The extraordinary thing about vacancy and second home ownership is that they are rewarded, not punished by the tax system. Rebates can be claimed on Council Tax and other loopholes exist. In November chancellor George Osborne failed to close down ways by which his rich friends domiciled abroad for tax reasons could evade stamp duty hikes. (5) This caused the Daily Mail to start foaming at the mouth (not that it needs an excuse) describing the buy to let market as a way for people to save for their retirement rather than calling it what it is; a way for those with money to screw those with less or little. Showing his economic illiteracy and a failure to learn from the catastrophic Lawson budget of 1988, Osborne’s decision to raise stamp duty just inflated prices further as those who could paid over the odds to beat the deadline and buy to let firms rushed into the market. Once again a Tory house price bubble was created.
Historically housing bubbles in the UK have burst. But is different this time as the main players are buy to renters rather than individual loaners. They have the capital, and if thing get iffy they can just hike up the rent as tenant rights are now largely set to become a thing of the past.
The Housing and Planning Bill is quietly winding its way through Parliament as the nation is distracted by the protracted EU referendum debate. This nasty piece of legislation sees the gloves come off as the Tories seek to entrench their hold over the country.
Secure tenancies are being scrapped, and 1930’s style means-testing will be introduced for tenants under the so-called “pay to stay” which could triple rents with no comeback for the dweller. The Bill also offers those on high incomes a 20% discount which they can cash in and keep when the property is sold on. Local Authority’s will be forced to offload their property assets and be set a target by Whitehall who, incidentally get to keep the money raised. Councils will be fined if targets are missed. (6)
The alternatives are clear. Margaret Thatcher re framed the argument regarding housing when she launched her relentless campaign against public housing. Instead of communities taking pride in their homes and estates built by workers for workers, Mrs. T made it seem as if being a council tenant should be a source of shame, not pride. Liverpool City Council bucked this trend by building 5,000 homes in the mid eighties and these area were renowned for their flower beds and well tended open spaces. But the Iron Lady would not be denied. Her thesis was that home ownership would improve people. What really she really wanted was trade unionists up to their neck in debt so they would baulk at being organised.
The real scandal of Thatcher’s right to buy was exposed in February this year when a report revealed that nearly half of all council houses sold off under her tenure in Downing Street are now in the private rented sector. (7)
We an talk in the short term about rent controls and taxing land lords but this isn’t dealing the issue. Instead we need to implement as a first step a Land Value Tax. According to a 2010 article by ex Bank of England Board member Prof. Danny Blanchflower, a one off 20% levy would raise £800 billion which would allow us to wipe out the deficit, abolish VAT (or at least extend the number of exemptions) and give us the cash to deal with the housing crisis.
In partnership with new build, any government brave enough to take this on must insist on renovation as the preferred option, especially within existing City boundaries so that we use the assets we already have. The ethos towards public housing needs to change with world class builds being available to all based on need. Crucially all our housing stock needs to move towards carbon neutrality with geothermal, solar and wind being the rule rather than the exception.
Tony Crosland, hardly a doyen of the Left in the Labour Party, outlined a vision for our living areas in his book, “The Future of Socialism” (1962)
“We need not only higher exports and old-age pensions, but more open-air cafes, brighter and gayer streets at night, later closing hours for public houses, more local repertory theatres, better and more hospitable hoteliers and restaurateurs, brighter and cleaner eating houses, more riverside cafes, more pleasure gardens on the Battersea model, more murals and pictures in public places, better designs for furniture and pottery and women’s clothes, statues in the centre of new housing estates, better-designed new street lamps and telephone kiosks and so on ad infinitum.”
Socialism is about big ideas and having the courage to implement them. The foundation of the NHS being a prime example.
In the words of French philosopher Jean Paul Satre, “Be realistic: demand the impossible”