Swindon Tenants Campaign Group Media Release February 13th 2017
No solution to the housing crisis without council house building
The government’s Housing White Paper, “Fixing our broken housing market”, is an implicit recognition of the failure of 6 years of coalition and Tory government housing policy. Talk of a “home owning democracy” has been abandoned. However, the problem will not be resolved by attempting to make ‘the market work for everyone’. As the Financial Times recently recognised in an Editorial, it is against the interests of the big builders to build ‘affordable homes’ for rent.
“The fact is that private developers, left to their own devices, will not build enough to meet demand, especially when the greatest need is for affordable rented housing in urban areas. It is not in their interest to do so, since the result would be lower house prices and land values, eroding their profitability”.
The Financial Times recognises that “Any solution to Britain’s housing crisis must include a bigger contribution from the public sector” but the government does not. Theresa May pays lip service to this when she says that “We will encourage housing associations and local authorities to build more.” But her government has continued the assault against council housing. Nationally, since 2010 their numbers in England have fallen from 1.786 million to 1.610 million in March of 2016. The only funding her government is offering for council housing is “affordable homes programme” grant for 8,000 units of “supported housing” (for elderly and disabled people).
In a 104 page document there is one page on local authority building. All it says is that “We will work with local authorities to understand all the options for increasing the supply of affordable housing.” However, given the definition of affordable housing which the Tories have promoted, this offers no support for council house building with council rents. What little grant has been available for councils comes with the condition that they cannot charge council rents. They have to charge “affordable rent” (up to 80% of market rents). The Tories are now adding private rental at 80% of market rent to the category of “affordable housing”.
STCG Secretary, Martin Wicks said:
“The White paper is a damp squib. It will do little to address the housing crisis. The market cannot be ‘fixed’ to provide homes for those in need. It is because house building has been dominated by commodity production that the crisis has emerged and been so protracted. Th market determined ‘demand’ only on the basis of what people can afford to pay, rather than on the basis of human need. The roots of the crisis go back to Thatcher’s ‘right to buy’ policy. The sale of millions of council homes has created an acute shortage of genuinely affordable homes to rent, which the expensive private rental market has partly filled. It’s high time that ‘right to buy’ was abandoned. Councils are not replacing homes sold and the number of council homes continues to decline. In Swindon they have fallen fro10,515 in 2011/12 to 10,265 in December 2016.
Only a return to large scale council house building will create the homes that are desperately needed. Look at the graph of historic house building and you will see the decline in building numbers closely follows the fall in council house building.”
In 2015-16 168,210 new dwellings were built in the UK. Private enterprise built 134,500 of those for sale. Net additional homes in that year nearly reached 190,000. However, 35,000 of those were not new builds but change of use or conversions (e.g. shops into flats or houses into flats). The government admits in the White Paper that there is a need for 225,000 to 275,000 new homes a year “to keep up with population growth and start to tackle years of under-supply”.
There is no way that the big builders will build these sort of numbers and no way that so many people could afford mortgages or the inflated house prices, on average eight times earnings. In Swindon even the lowest quartile (cheapest) home was 6.6 times the lowest quartile earnings in 2015. Since then we know that prices have continued to increase above the level of earnings.
In 2015-16 only 3,030 council properties were built in the UK. In England alone in the same year 3,730 were demolished. Since the coalition government came to power in 2010, in England, 20,300 council homes have been demolished and only 8,600 built. Over the same period councils in England have lost 47,151 homes through RTB.