We don't need markets - we need housing

[Tony Gosling]

Gould-Werritty: A Real Conspiracy, Not a Theory
http://www.craigmurray.org.uk/archives/2011/11/gould-werritty-a-real-conspiracy-not-a-theory/


We don't need markets - we need housing
Wednesday 23 November 2011
by Jeremy Corbyn
http://www.morningstaronline.co.uk/news/content/view/full/112300

Grant Shapps got up on Monday and laid out the 
brave new Tory world for the future of housing in this country.

True to Tory traditions, his whole narrative is 
about owner occupation and relieving the housing 
market from its current impasse.

It is strange how Tories always talk in terms of 
markets and values - not housing needs or stress that people face.

The Tories, ever since Disraeli, have attempted 
to create a "property-owning democracy," and thus 
in Britain we have a much higher than European 
average of owner occupation, much higher levels 
of debt and, now that the market is "failing," 
much greater levels of insecurity in housing.

On average, ordinary people in Britain spend far 
more on housing than anywhere else in Europe.

The Tory solution to 700,000 empty properties, 
record applications for council housing, highest 
ever private-sector rents and refusal of publicly 
supported banks to lend money to first time 
buyers? Apart from starting from the point that 
it is all Labour's fault, is essentially that the 
only thing that matters is boosting owner occupation and private renting.

New Labour paved the way for much of this by 
undermining council housing, promoting housing 
associations and buy-to-rent and not protecting private tenants sufficiently.

They propose to spend a great deal of money 
supporting the private sector - £400 million for 
a start - selling publicly-owned land and then 
what they politely call "reform" of the social sector.

Before they ever discuss council housing they 
always assert the rents are subsidised - they are 
not - and that the buildings are subsidised - they are not.

Council housing is a successful example of public 
enterprise with 60 year loans to local 
authorities to build and develop and manage 
properties with appropriate rents at an economic level.

Typically the private rented sector rents in 
London are two or three times those of councils, 
often for identical properties bought under right to buy.

So what is in store? The Tories - with 
enthusiastic Lib Dem support - want to promote 
home ownership which, while not wrong in itself, 
should not be the only option for many who 
currently spend huge proportions of their income 
on private rented unless in huge stress.

We need to do three things - ensure that empty 
homes are brought into use, see that private 
tenants are protected and, above all, make sure 
more new and refurbished homes are built for council tenants.

The white paper does provide some opportunities 
for ensuring homes are bought into use through a 
process known as Empty Dwelling Management 
Orders, but one has a suspicion that the 
government's intention in this does not include 
the scandal of the super rich buying mansions 
around London as a hedge against any depreciation 
in their financial assets in the future.

The same government used its majority to 
criminalise squatting, even of properties that 
have been deliberately left empty for a very long 
time. The House of Lords is now considering what to do about that proposal.

The White Paper makes much of increasing council 
house sale discounts to possibly as high as 50 
per cent, which even Thatcher stopped short of.

Shapps now proposes to go as high as a maximum of 
70 per cent discount because, and I quote, "we 
are now determine to reverse this include and 
reinvigorate the policy to give a new generation 
the opportunity of home ownership."

In his statement Shapps went out of his way to 
assert that for every council house sold under 
right to buy there would be a one-for-one replacement.

Simple maths tells me that if a property is sold 
for less than half of its value, it's very 
difficult to see how there will be enough funds 
available for a one-for-one replacement.

The white paper makes a curious assertion: "Our 
initial model shows that the expected receipts 
will provide a sufficient contribution to the cost of replacement homes."

It's extremely unclear where the finance is going 
to come from for replacing the sold homes.

Behind all this is an attempt to continually 
increase council rents to "market" level and 
reduce lifetime tenant opportunities to five-yearly reviewable tenancies.

Their aim is to make council housing the housing 
of last resort, rather than the secure and 
permanent communities that have been achieved by 
90 years of council house development in Britain.

Sometimes in my job I feel as though I'm living 
in a parallel universe. On Tuesday I attended a 
meeting of the All Party Private Tenants Group 
which entertained a delegation from the 
Residential Landlord's Association to receive a 
report from professor of urban and property 
economics at the Henley Business School Michael Ball.

The assembled company of landlords and officials 
of the association presented a report which 
claimed that "current returns of the private 
sector are extremely low and likely to remain so. 
The resultant damage to the private rented sector 
could be huge because the availability and cost 
of private rented accommodation depends upon 
landlords making viable returns on their investments."

In a lengthy report which shows that private 
rented housing has gone up from 8 per cent to 16 
per cent of total housing stock in the past seven 
years, mortgage interest rates have more than 
halved during that period and rent levels have 
risen way above inflation, it is difficult to 
have any sympathy for the plight of this sector.

More disturbingly, in the analysis presented by 
Professor Ball, more than a third of 
private-sector tenants stay in a property for 
less than a year, and last year alone more than a 
million private renters moved.

In areas like Islington North, a private sector 
now accounts for almost a third of all households 
who typically pay very high rents for short term tenancies.

In my experience in London, the worst affected 
people are those in desperate housing need who 
approach the local authorities who, under 
homeless legislation, are obliged to rehouse 
them. As they so often have insufficient stock of 
their own, they place them in private rented 
flats through an agency. The rents for these 
flats are often astronomical and the conditions 
poor, with much energy inefficiency.

At the moment rent is paid by housing benefit, 
but with the government's cap on these payments 
and the proposed overall cap on benefit levels, 
many of these families are losing their homes and 
are being forced to move well away from areas 
where their children go to school or their wider family and friends live.

The scandal of children growing up in overcrowded 
and unheated accommodation is serious, and 
damaging a whole generation of children's lives.

What a wasted opportunity this white paper is.

We should be promoting house building for those 
in desperate need, affordable mortgages for young 
people who want to buy but, above all, developing 
council housing to provide long-term and 
economically viable secure tenancies for people in desperate need.

This minister seems more interested in allowing 
the private sector to further develop the housing 
market rather than deal with the housing needs of 
those on waiting lists or in poor quality accommodation.

Jeremy Corbyn is MP for Islington North

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Fear not therefore: for there is nothing covered 
that shall not be revealed; and nothing hid that 
shall not be made known. What I tell you in 
darkness, that speak ye in the light and what ye 
hear in the ear, that preach ye upon the housetops. Matthew 10:26-27

Die Pride and Envie; Flesh, take the poor's advice.
Covetousnesse be gon: Come, Truth and Love arise.
Patience take the Crown; throw Anger out of dores:
Cast out Hypocrisie and Lust, which follows whores:
Then England sit in rest; Thy sorrows will have end;
Thy Sons will live in peace, and each will be a friend.
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