The current focus on the bedroom tax, while well-meaning, has one big problem: it takes away from the greater scandal, which is the gradual and deliberate undermining of social housing in England as a whole. A person affected by the bedroom tax is really lucky. He or she has somewhere to live.
Availability of housing doesn’t affect us up here in the North-East so much, but it’s creeping: average UK house prices have gone over £300,000 for the first time, becoming unaffordable in more areas of the country. (1) When house prices rise, rent prices follow, so that, increasingly, those who can afford to live in some areas are either those who were lucky enough to buy when houses were more affordable, or those who are lucky enough to have earned or inherited a lot of money. This would be unfair, but tolerable, if there were a functional social rented sector; but the current government is doing everything it can to destroy that which exists.
A really good way of decreasing the social housing stock is to flog it. Right to Buy for local authority tenants has been around since 1980, but two significant changes are being, or have been, made. In 2012 the associated maximum discount was increased to £75,000 (£100,000 in London) or 60% of the value of a house, 70% of the value of a flat. It’s increasing in line with inflation. (2) Then there’s the extension of Right to Buy to housing association properties; it’s currently being piloted on a voluntary basis. (3)
Now, is there necessarily anything wrong with social housing tenants being able to buy their homes? Well, no. In some circumstances it could be a good thing, leading to a more mixed-tenure, stable community than if people wishing to become home-owners always had to move out; and there would be no net decrease in the amount of social housing available if local authorities were able to sell at market rates and if there were land available for them to use the proceeds to build new dwellings.
(I’m a town planner, and we say “dwelling” rather than “home” on the basis, I suppose, that a dwelling is only a home if someone’s living in it. I like the pedantry of this, and the slightly archaic ring of the word. It also avoids the rather nauseating insincerity exhibited by developers and estate agents who refer cosily to “your home” when they really mean “your capital investment, and our whacking big sale”).
That’s not what’s happened in the UK, though. Of course there are plenty of people living quite happily in ex-council dwellings. Good for them. But, since local authorities have had to sell at a discount and have been forbidden to build new ones with the proceeds, the effect has been to reduce the amount of social housing available.
What’s more, many ex-council dwellings – at least 36% in London (4) – are now let by private landlords. Private landlords can charge higher rents and do not have to adhere to the “Decent Homes Standard” required for social housing. (5) So people are paying more for worse accommodation. That’s individuals, and local authorities paying housing benefit – either way, it’s us. The absence of decent social housing means that private housing, whether for sale or rent, is the only option, and therefore developers and landlords are free to rip people off. Social housing isn’t just a safety net for those unable to enter the private market. If it works, it should be a moderating factor upon it.
The Government’s response to an increasing housing benefit bill has not been to curtail the transfer of dwellings to private landlords. Instead, they have imposed a benefit cap, limiting the amount of money a household can receive from all benefits. In high-value areas where the social housing has been sold, this can mean that there is literally nowhere cheap enough for a person on benefits. (6) (7)
Meanwhile, local authorities are unable to take action against problem tenants – because they don’t own the houses any more. And the Daily Mail and the EDL, or whatever the current most prominent group of racists are, spin the line that the country is “full” and blame the immigrants for the housing shortage, like they do for everything else.
We know all this. It’s been going on for ages. But the consequences are worse now because of the rocketing cost of private housing.
And the Government are working assiduously to exacerbate the situation. First, there’s Help to Buy – a scheme, introduced in 2013, in which the government subsidises property purchases by first-time buyers, either by topping up an ISA, providing loans for a deposit, or guaranteeing a mortgage. (8) It was suggested at the time that this would have an inflationary effect upon house prices, which have, indeed, risen.
Then there’s the whole package of measures in the Housing and Planning Bill, currently going through Parliament. (9) . First, it contains a requirement for local authorities to sell off higher-value council properties – that’s to fund the discount on the sale of housing association properties. So, in the areas where affordability problems are worst, local authorities will have to sell more of their social housing in order to subsidise the sale of more social housing. Secondly, it contains a requirement for “higher-income” local authority tenants to pay market or near-market rent.
Thirdly, there’s the invention of a new category of dwelling: “starter homes.” Young people can’t get on the housing ladder, say the statistics. No matter! says the government; local authorities are going to make developers build “reasonably-priced” housing for sale, and knock 20% off. How are developers going to pay for this? Well, we don’t know, but it’s likely to mean they pay less in “Section 106” agreements – the levies that developers normally pay councils to fund socially-necessary things such as schools, parks – and affordable housing. (10)
Can these “high-earning” people who’ve just had a rent hike in social housing buy a Starter Home? No, of course not. “High-earning” is £30K in most of the country. That would get you a mortgage of £142,500. A Starter Home can cost anything up to £250K. You’re not even close. Even with Help to Buy. Even with the 20% discount. The situation’s even worse in London. “High-earning” is £40k (if that sounds like a lot, remember, that’s a couple earning £20K each). They could borrow £190K. A Starter Home can cost up to £450K. (11) If they can’t pay the rent, they’ll just have to move, and probably, in that situation, out of the area altogether. (12) (13). If they leave a high- value council dwelling, the council will have to sell it. So it won’t benefit anyone else in need.
So. What’s going on here? With all these bloody awful consequences, why on earth is the Government screwing the poorest over so much? Why’s it presiding over the transfer of so much of the nation’s capital and its social goods into the hands of those who are already wealthy?
Well, it’s ideological, of course, a gradual hardening of the attitude that says that we sink or swim in this life, and that society has minimal responsibility towards those who happen not to have been born with, or acquired, a lifebelt. It’s a continuation of the attitude that says, after each Budget, that we should consider, not what this means for “us” but for “me” and that selfishness and the compulsion to accumulate is not only inevitable, but- since it’s imagined to correlate with Hard Work and Responsibility – in some sense, highly moral.
I’m not, by the way, saying that the housing shortage is entirely to do with housing policy. It’s got to do with the North/ South divide and an excessive focus on London as the centre of commerce and government; the purchase of London property as an investment; a shortage of housing land in existing cities, and the difficulty of intensifying development where land is already built on; and the habit developers have of “banking” land and planning permission; and resistance to new development. I am saying that current governmental policy seems to be almost perversely directed towards exacerbating current problems.
And you know the worst of it? At just the same time as the Chancellor is pontificating about the regrettable necessity for austerity – it’s us that’s paying for all this. We’re paying for Help to Buy. We, or rather, local authorities, are paying to subsidise the sale of housing association properties. We’re paying, through the money that local authorities won’t be getting from Section 106, for the pleasure of those poor dears that can only afford £450K for a Starter Home; and that £450K, of course, ultimately ends up in the coffers of the private housebuilders who have been lobbying all parties for decades. Don’t look for conspiracy theories, folks. Bad crack is happening in plain sight.
by Josephine Ellis, Blue Kayak