London has a population of 8.6 million which is 13 percent of the entire 64.6 million who live in the UK. London, like many capital cities, is densely populated and people live on top of one another and starkly compared to the Scottish Highlands or Cornwall and it requires perverse and unique housing solutions.
So why is housing policy for the UK a response to the perverse and unique housing conditions in London and London alone? That is madness whether economically, politically or socially. It doesn’t make any sense at all yet housing policy whether for home ownership, the private rented market or the social rented market is dictated by London’s perverse housing conditions and problems. That has to stop.
Whether we are discussing very specific and pragmatic issues or whether it is just the politicians or media view of ‘housing’ in terms of concepts such as aspiration as to home ownership and electoral housing policy chicanery, the perversity of London’s housing conditions dominating UK-wide housing policy has to stop.
Leave aside the obvious such as housing density and truly bizarre house prices which gets all the political and media hype and focus and look at some very simple facts on tenure and the perversity of London dominating national housing policy becomes readily apparent.
Perverse London Housing
A) Home ownership – owned outright and mortgaged
- Inner London has 38% of its housing owned or mortgaged compared to the English average of 63%
- Outer London has 55% owned / mortgaged compared to the English average of 63% which is also the GB and UK average
- London (Inner & Outer) has 49% of its housing owned / mortgaged compared with 63% in the UK
The table shows just how out of kilter this is with the rest of the regions as the 49% figure for all of London is more than 18% less than the North East which is the second lowest region for home ownership.
This leads to very false assumptions coming out of the dominant London-centric housing view that many more would want to own their own home but are unable to and ONLY because of cost.
That is patently false as it is also due to lack of supply as only 38% of housing in London is available to be bought and sold yet in the rest of the South East it is 69% of all housing properties which can be bought and sold and critically regardless of the total number of properties.
The perversity in London of the cost is the ONLY constraint argument which then fuels HomeBuy, Right to Buy and Right to Buy extended to housing associations is also a false premise which sees politicians promote in terms of electoral bungs and when resisted by social landlords they are accused of being against aspiration which is frankly ridiculous.
I aspire to owning a Maserati, and a Bugatti and holiday homes in the Caribbean and aspire to score the winner in the FA, European and World Cup finals and hitting the last ball of the final Ashes test for six to win the series! We all aspire yet we all have to keep two feet on the ground at least some of the time and aspiration is just the latest political phrase for largely unrealistic hopes and dreams.
London has 22% of all housing being in the social rented sector overall (Inner 30%, Outer 18%) as above and that is way out of kilter with the UK average of 17%.
Note that the seemingly little 5% difference (22 – 17) is in fact 29.4% more social housing than the average region and London like every capital city has to have a huge proportion of Indians not just aspiring or actual Chiefs in order to keep it running.
Of course it follows that even the most ‘menial’ of jobs of these Indians pays more in capital cities and so house prices also increase whether to buy or rent and we now have the Living Wage gaining political momentum at £9.15 per hour or £18,556 per annum gross in London. Double that to £37,112 per annum gross and you still have no prospect whatsoever of home ownership in London. It has bugger all to do with aspiration in reality, it is all about practicality.
Now let’s dig a bit deeper and see who lives in the different tenures and this will surprise many at just how radically different the tenant make up and if you will reveal the PURPOSE of social housing
As you can see 50% of social renting tenants are either pensioners or in receipt of Disability Living Allowance and this compares to just 15% in the private rented sector. That is a huge difference which invariably is never considered in any discussions regarding rented housing.
It is highly unlikely that the pensioner of a disabled social tenant aspires to home ownership, it is impractical even on the availability of a mortgage basis alone never mind other practical issues such as affordability and adaptations and the rest, even if desired.
One in two social tenants will never have any reasonable aspiration of home ownership outside of winning the lottery and so for Brandon Lewis the housing minister to say social landlords are against aspiration per se as he did at CIH 2015 conference this week only shows his ignorance of who lives in social housing aside from the offensive nature of labelling social landlords guilty and having to prove their innocence.
Put another way for a wider social housing aspect the same figures also show that the private rented sector simply does not DO housing for the older person or those with a disability. Delve a little deeper on receipt of disability benefits by tenure and we see that:
- ESA – 2% of owners: 4% of PRS tenants and 11% of SRS tenants receive
- AA – 3% of owners; 1% of PRS tenants and 4% of SRS tenants receive
- IB – 1% of owners and 1% of PRS tenants yet 3% of SRS tenants
Three to four times the percentage of disabled households are in social housing than in privately rented housing and again unlikely to be aspiring home owners which again proves the PURPOSE of social housing is largely the ONLY option to accommodate those who are vulnerable and UNABLE to ever afford to buy.
Look at bit deeper still as to likely / unlikely aspiring home owners and we see that 4% of home owners get Pension Credit, just 3% of PRS tenants yet 16% of SRS tenants – so over 5 times as many in social than private housing to add to the state pension figures of 31% SRS and just 9% PRS in the table.
As an aside note well here social landlords that I said two days ago that the DWP has admitted that up to £3.47 billion of Pension Credit goes unclaimed and as you have over 5 times the claimants of PC than in private rented then they are highly likely to be your tenants.
You know all those claims you make that our welfare teams have got out tenants £xxx per year more in benefits this year(!!) and given that your rent software can easily identify precisely who COULD claim Pension Credit then get your fingers out.
Of course I would not expect social landlords to go to the next stage and train up and fund their tenant groups to do the leg work and help find the other £10 billion in ‘welfare’ that goes unclaimed and would but huge amounts of goodwill for social landlords. That is far too sensible and despite most of the unclaimed ‘welfare’ is likely to be found in social housing given the make up of its ‘customers!’ That complex time-consuming and labour intensive job finds no favour in tick box in-house social landlord welfare teams which they laud to high heaven!!
To get back on point Social Housing serves a huge PURPOSE and gives huge benefit to the country is also what these figures mean. If pensioner and disabled households did not have social housing they would have to live in the PRS and cost the country billions more in housing benefit – again a point never seemingly made that social housing provides an extremely cost-effective public service.
Yet do not let the above benefit by tenure statistics mislead as the social housing tenant could also be described as the epitome of the ‘hard-working’ family the politicians are so beloved of uttering at every turn. Receipt of working tax credit has to be the epitome of the hard-working family as it is only paid to those in low paid employment and the figures are 4% for home owners; 11% for PRS tenants and 13% for social tenants.
So more social tenants are prepared to ‘get off their backsides’ and take up low paid employment than private tenants or home owners and that is another facet and benefit of social housing …
…It enables far less dependency on benefit than the higher cost private rented sector and social tenants can afford to take up low paid employment more so than the private tenant who has to be able to earn more to afford higher rent.
Again all we hear from politicians is social housing encourages welfare dependency when the exact opposite is the case. Of tenants that, critically, are able to work, more social tenants than private tenants take up low paid employment yet politicians always tend to miss out that important caveat as it destroys the credibility of their increasing arguments to blame their failures on those receiving benefit.
And that brings me back to London. The working social tenant will receive far less in working tax credit than the same social tenant in the North because wages are so much higher in London. Yet another consequence of that is many employers in the capital only want to pay the national minimum wage and so that only attracts the migrant from Eastern Europe all the more and logically so because Britons can’t afford to survive in London on the NMW as the cost of living there is so much higher than in the North.
So housing policy is dictated by superficial assumptions that because London has plenty of employment opportunities then all who are not working must be shirkers. Yet as stated above despite London having a very large social housing percentage at 22% overall (30% in Inner London and 18% in Outer) which is 29% higher than the national average at 17%, 50% or more are either pensioners and not expected to work or will be unable to work through disability
A further percentage of social tenants will be lone parents who are also not expected to work as they have children under school age too – yet social / housing policy sees the benefit cap forcing them out of the capital just as it does to private lone parents too.
If you wont work then get the hell out of prime real estate London is the political spin behind such welfare reforms yet the not expected to work pensioner is exempt while the not expected to work lone parent household of working age is a mere shirker!
Inner London by virtue of having almost double the national average social housing supply at 30% to 17% sees the often not expected to work lone parent ostracised and pilloried and of course aided and abetted by the Daily Mail et al who sees all lone parents as sluts – apologies for terminology yet that is what the DM et al arguments say – when lone parenthood can just as easily derive from sole wage-earner hubby running off with his secretary or any one of scores of reasons for family breakdown and divorce that happens in all parts of the country and in all other countries too.
The Daily Mail et al hyperbole is no replacement for evidenced based policy in the national interest yet it holds sway as it is aided and abetted by poverty porn TV.
The results of such welfare policy is that social housing in the capital is much more affected with the benefit cap than any other part of the UK and sees social tenant flight from Inner to Outer London and way beyond to London to Hull or even John O’Groats to Land’s End.
That is the problem with welfare reforms based on pithy back of a fag packet political slogans and takes no account whatsoever of the impacts or the perverse housing conditions that London has, and with no recognition that social housing is the ONLY viable option for over 50% of its tenants who are unable to work through disability and because those not expected to work are given no consideration ahead of policy implementation.
The blame for that lies just as much with social landlords as with the Daily Mail and Poverty Porn TV as the social landlord ‘sector’ has never stated who its customer is and why it is the ONLY housing choice for so many and not just on cost grounds.
Social housing according to the Daily Mail / Benefit Street narrative is replete with just shirkers and scroungers who could work and should work yet choose not to work and that assumption is hugely false as the above official figures in the Family Resource Survey reveal.
What a detailed look at who lives where and benefit by tenure we move way beyond the simple and often quoted Baroness Hollins in the House of Lords debate on Housing Spending Review 4 November 2010:
“The truth is that homes are only cheap where there are no jobs, so I would ask the question that the noble Lord, Lord Tebbit, asks: should the jobless from Middlesbrough move to London where there may be jobs but no homes, or should the homeless from London move to Middlesbrough where there are homes but no jobs?”
This statement is of course false. There are plenty of homes in London in social housing and there they are in much greater numbers and proportion to the rest of the UK and almost double the proportion in Inner London than the national average and almost triple the number of social housing by proportion to the South West at 30% to 11%. Even Outer London at 18% of all housing being social rented is 38% higher in proportion to the rest of the South East at 13%.
Yet all we ever hear is that London has a chronic need for more social housing and that is patently false as both Outer and Inner London have higher than the national average 17% social housing in the rest of the UK.
What London has overall is 22% of all housing being in the SRS and the national average is 17% so London, Inner and Outer has almost 30% per cent more social housing than the average region of the UK. Yes I’ve said that a few times now as this FACT is rarely raised yet needs to be.
Just to take the South West up to the national average would require a 55% increase in social housing in the South West and to rebalance all parts of the UK with the national average would see Outer London reduce its social housing by 6% and see Inner London reduce its social housing by 76%!
London has in reality and fact far too much private rented housing and far too little home ownership yet there have been no calls to reduce London’s private rented sector at all which stands at 29% of all property compare to the 19% national average or 53% above the national average; and only calls for more home ownership there being with bungs to social tenants through RTB or the convoluted HomeBuy scheme.
The statement is right in that Middlesbrough (and many other places) have too few jobs and creating jobs tends to fuel house price increases. Yet whatever happened to employment being fixed to location in this digital age? Why is there a need to have an intrinsic link between higher employment and higher house prices?
All the digital advocates in housing at the moment may claim all they wish about digital only yet are we any further on than BBC Tomorrow’s World predictions from almost 50 years ago which said in the 21st Century we would all have twice the leisure time and our work would not depend on where we chose to live as it would all be digital? The answer is no.
So to solve the housing crisis, and there is no doubt that there is a shortage of housing, why the hell is the social housing sector and the media in housing and nationally simply calling for more affordable properties in London? It makes no sense whatsoever!
It makes even less practical sense when we have the SHOUT report finally making the economic case for more social housing per se, which it does admirably…. in theory: Yet the practical implementation of it is undoubtedly limited to how much money any government is prepared to find.
So even if the SHOUT campaign convinces the politicians either directly or through the general public, then only a set figure will be released as ‘subsidy’ (and why the hell does the sector still use that pejorative term!!!) or more correctly capital investment to save the country far more – the fiscal myopia in the current and last three decades policy.
If the current miserly £1.125 billion per year is increased to say £10 billion then why on earth is the housing sector hell-bent on spending that cash limited pot in London? Spend it in the South West where it will (a) go further and (b) deliver more supply to reduce the supply crisis more quickly.
If government is prepared to spends billions on high-speed fibre broadband in rural areas in order to increase job creation there then it surely must see the argument to increase genuinely affordable social rent provision in rural areas such as much of the South West. This same government has shelved HS2 to the North yet kept it to the South West and the same argument is there also.
I am not overtly or deliberately making a case for more social rent affordable properties in the South West I hasten to add I am merely following the logical argument here and getting away from THE most illogical argument which is more social housing in the capital!
The real problem for all governments including this one and those that follow is home ownership has reduced to 63% from a peak of nearer 70% some 20 or so years ago. It seems highly likely this will remain closer to 63% than 70% and so leaves the other 37% to be split between social housing and privately rented housing.
- The PRS does NOT house the older person or deliver sheltered housing.
- The PRS does not DO disabled or adapted housing
- Each PRS property with a benefit tenant costs almost 24% more in housing benefit or revenue subsidy.
- Each PRS property is far more welfare dependent than a SRS property because it needs a greater employment offer to move from benefit to work in the PRS than it does in the SRS
All of the above is what is known as stating the bloody obvious! If this and succeeding governments wish to reduce the housing benefit bill the answer is simple – have a much higher proportion of social rent properties than private rented ones!
Also have them in areas such as the South West as genuinely affordable rents is a hugely important inward investment incentive there as it is in the North West or North East or Wales with much higher levels of unemployed social tenants who are ready and able to work and thereby reduce the housing benefit bill further.
However this government is big on political rhetoric and in minus figures for evidenced based policy and common sense. You get greater employment and less all round benefit spend if you build more social housing at social rent in any area other than London.
Such a move would really be ASPIRATIONAL ….yet that requires the ability to think and use an evidence base for policy rather than political rhetoric, and God forgive me for saying this but it would also lead to a higher than 26% national vote for the Conservatives too!
Politics is the art of the possible said Bismarck and the chances of Labour returning to power in 2020 are as high as Bismarck being its next leader. So, as much as I do not want to admit that the Tories will be in power until 2025 they will be.
The potential at least in theory benefit of that for those at the bottom of the income scale, the vulnerable, those not expected to work and those unable to work is that IF the Tories had any shred of common sense and any economic sense and their patriotism was not the last refuge of scoundrels rather than a pretence of working in the national interest, they are genuinely in a position to adopt the Keynesian policies of mass social housing development in all areas bar London and reap the rewards of that for all of the country – which is what the country needs.
Now that the Labour Party has moved miles to the right of the right-wing Blairite New Labour project there is no hope at all for a left-wing political solution to the jobs and housing and other crises we face – the austerity project. The political left is in for a decade or more of turmoil and in-fighting (plus ca change indeed!) and I would love to be proven wrong on that yet I doubt strongly I will be.
If this government carries on with its austerity economics however such as the bedroom tax, benefit cap, LHA cap and SAR cap – its four policies aimed directly at reducing the housing benefit bill that has seen it increase by £440m per year or up to £1 billion more per year as the IFS think tank says, then the chances of the left galvanising more quickly increases.
I expect both of those to happen; the austerity back of a fag packet policies of the Tories will continue and ramp up causing a £24 billion per year increase in ‘welfare’ when UC finally rolls out, which is the current DWP estimate of unclaimed yet due ‘welfare’ – and the left will organise more quickly
The Tories have nothing to fear politically or electorally from Labour or indeed the left (two separate issues) and nothing to fear from the right with the UKIP threat over as they have one parliamentary seat and are having even more in-fighting than Labour or whatever leftist party emerges to replace Labour if Labour continues on its rightist road.
The UKIP let’s get out of the EU one trick pony campaign will undoubtedly fail Leaving Cameron in a stronger position than any modern PM since the early Thatcher days and she radically used that power, unfortunately 90% of it in the wrong areas.
Big business will not allow the UK to leave the EU nor should we in my view for many reasons and Cameron unlike Thatcher does not have a Heseltine or any other viable political threat waiting in the wings to take his job.
Boris Johnson…as the Prime Minister? Not a hope in hell’s chance as while the electorate may have voted this lot back in and they clearly have a perverse sense of humour, there is no way they will ever want Boris as the UK leader. Is there any other serious challenge to Cameron? Theresa May? No! Osborne? No! And as from the Tory ultra right throw the Cash some Bone in terms of the let’s put the Great back into Great Britain wing of the Tory Party and Cash and Bone are two ultra rightist deluded Tory MPs.
In short Cameron has a good ten years if he wants it and when he is backed in the referendum and we stay in the EU, the Tory Party will be begging him to stay on as he is the only one who can stop them imploding after the huge in-fighting the referendum will give to the Tory Party.
I have waffled here reader – it’s been one of those days when I go from one subject to another yet they are all interlinked in my obtuse brain influenced by 20 odd years in housing with my first degree in politics looking at all dimensions of the housing crises (plural) we have right now.
The national political agenda as well as the internal housing politics that has the UK housing sector dominated by the London centric brigade who has held 99% of the sway for the last 40 years and frankly buggered up social housing for the 87% of housing not in the capital all come together
Social housings ‘great and good’ (ahem!) have been a benign lobby, a mute lobby and an incompetent one and their only successes have been to swipe up 80% of the capital grant of the whole of the UK for just London.
That is why London has far more social housing than any other area in actual and proportional terms. I doubt the ‘great and good’ have ever looked at who lives in social housing, the who is my customer question that every business needs to look at else they would have known that more than half of social tenants are the not expected to work pensioner and the unable to work disabled household.
They would have told each and every government over the past 30 years and more that any naive comparison between the SRS at 67% of all claiming housing benefit and just 27% of all PRS tenants was and is fundamentally flawed and they are not like for like.
They would have told all governments over the past 30 years or more that the last place you should be building new social housing is London yet that is precisely what they have done and frankly buggered it up for the other 87% of the country regarding social rented housing.
So while this has rambled on it contains some very powerful arguments to all the incompetent politicians whether they dwell in parliament or whether they form the ‘great and the good’ of social housing.
Far, far more importantly, who the hell in their right minds thinks London needs more social housing and that will solve the housing crisis? Oh yes the ‘great and the good’ of social housing and in a generation too – yes a generation is 25 – 33 years so the generation ending this year began with the Falklands War and Renee and Renato!
PS – Ok 0.0001% of this argument comes from a Northerner; the other 99.9999% is merely reasoned argument