Socialist Worker

House building for rent at lowest since 1920s

by Kelly Hilditch
Issue No. 1980

We need more and better council housing, not less (Pic: Jess Hurd/

We need more and better council housing, not less (Pic: Jess Hurd/

The number of new homes built for rent from housing associations and councils is at its lowest level since 1925.

That is the shocking conclusion of a new report from the Joseph Rowntree Foundation released last week. It comes as New Labour continues to push through housing privatisation.

Housing associations are now responsible for all new “socially rented” accommodation, but their output has fallen below 20,000 homes a year, compared with 50,000 a decade ago.

Steve Wilcox, professor of housing policy at York University helped compile the report. He told Socialist Worker, “This report is looking back at a National Housing Federation inquiry which was published in 1984.

“One of its most important recommendations was the abolition of mortgage interest tax relief.

“This recommendation was denounced by Margaret Thatcher on the very day that the report was published. She basically said ‘over my dead body’. But this happened in 1999, not over her dead body, but after her time as prime minister.

“In the years since the abolition of mortgage tax relief the gains that the Inland Revenue has received come to about £30 billion. On top of that there is an annual increased tax yield of around £3 billion.

“The original inquiry had argued that some of this extra money should be used to fund a housing allowance.

“This would be used for tenants who needed help with their rent. It should also be available for home owners who needed help to keep up with mortgage repayments or needed urgent repairs on their homes. But this has not happened.

“There are also the millions lost from right to buy receipts.

“Over the past 25 years around £45 billion has been gained from right to buy—very little of that has been put into replacement housing. Most of it has been used to offset government expenditure. That was especially true during the 1980s and early 1990s, but it still the case today.

“Local authorities in England and Wales have to set aside 75 percent of the receipts from sales against outstanding debt on their housing stock. They are left with 25 percent available for new investment.

“There has been £75 billion that has come in to the treasury from these two policy areas, but spending on housing has been cut in the main.

“There have been some modest increases in the past few years under the Labour government, but it is never enough. The resources have been used by the treasury for other things.

“One of the most critical issues now facing us is the supply of new social rental housing—which is now at historically low levels.

“Money from selling off council stock has not been used to build replacement housing.

“One of the main reasons behind this is a lack of building. In the early 1990s in some areas in the north that had seen a decline in industry, housing that had been built was not needed. Whole areas of council housing were abandoned.

“That was a real policy shock. Some of the money that was available for housing went towards improving existing stock rather than building new homes.

“There has been a sudden waking up that there are real demands for affordable rented housing.

“If you look at the figures for homelessness and those in temporary accommodation, these figures have just shot up and it is linked absolutely with lack of investment.

“We now face a real shortfall in terms of overall house building, relative to the growth in the number of households. At the time of the initial inquiry we were, nationally, at a high point.

“There was a surplus of 3.5 percent. A lot of that would be second homes or vacant for one reason or another. But we no longer have that surplus.

“Over the past 20 years, the cutbacks in investments in new social housing by both government and local authorities was not replaced by private investment.

“Private house building rates have stayed at around the same rate. The result is a huge deficit in rental accommodation. There is a heck of a lot more to be done.”

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Article information

Sat 10 Dec 2005, 00:00 GMT
Issue No. 1980
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