There is only one way to solve the UK ‘housing crisis’ and ten simple words in the Labour Party manifesto hit the nail on the head on page 63:
We will remove government restrictions that stop councils building homes…
Currently councils can borrow to build anything at all except housing and that is perverse and especially so when (a) we have a crisis of housing supply and (b) an even bigger crisis of housing affordability which have both been caused by (c) the ideological madness of councils not being allowed to borrow to build housing.
All party politics aside this is the ONLY way that the UK can solve its housing crisis and whether you believe the bigger crisis is under supply or affordability.
Every country needs to house its population that includes those able to afford to buy and those who cannot … and those who cannot afford is a hugely increasing number in the UK.
Home ownership peaked under Blair at 71% of the population in 2004 and today it is 64% a fall of over ten per cent and in a very short space of time. That is the real political issue as fewer home owners mean less economic growth and mean a much higher percentage have to rent.
In 2004 only 29% rented and now it is 36% an increase of twenty four per cent in little over a decade … a decade that has seen councils unable to build, housing associations have ever reducing grant / subsidy and led to the chronically insecure private rented sector taking up the demand … and a much greater reduced chance of ever getting on the ‘housing ladder’ for you, your children and your children’s children.
The market has failed. The ideology of leaving housing to the market has failed and you, your children and your children’s children have been failed by the perverse and wholly ideological decision not to allow local councils to borrow to build housing – a policy in place for over 30 years and a failure of all governments in that time.
There have been short-term benefits for those who are home-owners with ever increasing assets even after the banking crisis yet now the equity built up in their house by the bank of mum and dad is not enough.
What the decision to allow councils to borrow to build means is very simple, it means housing will be built for actual housing need and not for housing profit of the private housebuilders and housing associations. HA’s are not public bodies, they have no public duties and they have no compulsion at all to build for actual housing need – and that housing need has increased by 24% since 2004 with the fall in home ownership rates.
It is said that 80% of housing associations do not build at all and the 20% that do managed just 40,000 houses last year, a record breaking year … yet only 5000 or so of them were for social rent – a record low post-war number of HA’s building for social rent (aka actual housing need) which says (a) what HA’s want to build is determined by their bottom line and not for their claimed social purpose; and more importantly (b) HAs do NOT have the capacity to build the UK out of its under supply crisis despite the deluded sophistry of the National Housing Federation umbrella body.
Councils used to build 200,000+ houses per year and they can and will easily scale up to that number again because it is in their best financial interest to do so and that includes Conservative run local councils too and this is an apolitical point! It is what the UK needs to do to solve the housing crisis whoever is in power at central and local government.
The real political perversity is that this Corbyn council house building plan is shared by the Daily Telegraph and this plan is the exact same principle of the Militant Liverpool Labour council of the mid 1980’s! In the 1950’s and 1960’s the Labour and Conservative governments used to fight over who had built the most council housing too – and the idea has never failed or never not been the right policy, it merely fell out of political ideological fashion with BOTH the major parties.
In economic apolitical terms it is undoubtedly the best and most cost-effective housing policy for the UK AND it will lead to more home ownership too as the less you spend on rent the more you can save more quickly for a deposit – a simple undeniable fact along with the easier take up of employment that are just two obvious points we have all (conveniently?) forgotten.
Yes, some council housing was appalling in its architecture and it has to be said in its management and operation, yet still much better than the worst of today’s private rented sector …. and …. many lessons have been learned so that many of the mistakes of the past will not be repeated.
If Labour do not win the election the Tories should adopt this policy as it will work and you, your children and your children’s children will have a real chance of housing and getting on. It is the ONLY way to solve the housing crisis.
Originally published on my Joe Halewood blog page today