Downloading PDF. Please wait... Issue 1800

Can’t buy, can’t sell, can’t rent

This article is over 20 years, 1 months old
Paul McGarr on the market and growing housing chaos
Issue 1800

THE spiralling cost of finding somewhere to live in London was a key issue behind Tuesday’s strike by council workers in the capital. Local councils are effectively blocked from building new homes by New Labour’s determination to continue Tory attacks on council housing. So many workers are desperately trying to buy houses.

In housing ‘hot spots’ like London they simply can’t afford it. This is especially true of young people just starting out. The situation is creating huge problems for public services and many companies in recruiting and retaining workers.

And it is forcing essential workers in such areas into mind-boggling journeys to work. Tales of firefighters having to commute from South Wales to London regularly are real, not urban myths. This is not so surprising when you look at the situation in London boroughs. Tower Hamlets, for example, is one of Britain’s richest and poorest areas. Deep pockets of poverty stand alongside the extreme wealth of areas like Canary Wharf.

The area suffers from severe shortages of vital public service workers like teachers. The local paper runs a weekly 24-page ‘Homehunter’ supplement. Last week there was not a single home in the borough advertised for less than £120,000-and that was for a one-bedroom flat in a rundown tower block on a local council estate.

Rents were not much better. Not a single place was advertised for rent at under £200 a week-and that gets a studio or a one-bedroom flat. This madness is just one aspect of the picture. Across London there were also 104,000 perfectly decent flats and houses standing empty last week according to the government’s Empty Homes Agency. Most are kept empty by profiteering landlords and developers hoping to cash in as prices rise still more.

In all there are a staggering 753,188 empty homes in Britain, more than enough to solve all the immediate housing problems. The contrast of high prices cheek by jowl with empty homes is not confined to London. A report by the Centre for Urban and Regional Studies last month found that the number of empty homes has leapt by 15 percent in Yorkshire and Humberside in the last four years.

Soaring prices and rents in some areas contrast with whole streets standing empty and available for next to nothing in others where jobs are scarce. People who bought homes in these places now find prices have slumped, leaving them trapped and unable to move to find work. The report says this blights whole areas like south Wakefield, south Leeds and Hull.

But areas only a few miles away, in York, Leeds and Harrogate, experience soaring prices and homes increasingly beyond most people’s reach. Similar contrasts can be found in many other areas of Britain. This crazy situation limits people’s freedom to move for personal or work reasons.

Profiteering from homelessness

  • DEMAND FOR homes will rise right across Britain in the years ahead. People are living longer and more are living alone. There is real argument about how many new homes are needed and where they should be built. But housebuilding is at too low a level to meet even modest estimates. Many argue that something like 200,000 new homes are needed each year to cope with replacing old homes and meet changing living and work patterns.

    Yet last year just 162,000 homes were built, the lowest figure outside wartime since 1927.

  • IN AREAS of soaring prices a new phenomenon is taking off. Wealthy individuals and companies are speculating in property instead of the stockmarket. Property speculators and companies are rushing round buying up council flats and renting them out at exorbitant rates. The Council for Mortgage Lenders says, ‘Buy to let continues to be an attractive option for investors.’

    The Council for Mortgage Lenders also says that in the last six months of 2001 an additional 41,000 properties were bought for this purpose, taking the total to almost 200,000.

  • THERE ARE over 100,000 homeless people in Britain today, even on the very tight definition used by local councils. Evictions, mainly for rent arrears, are soaring among ‘social landlords’ like the housing associations now seeking to take over council housing.

    The number of possession orders granted to such landlords leapt by 12 percent last year after a 12 percent jump the previous year, and is now at well over double the level it was a decade ago. There were some 27,000 evictions actually carried out by these landlords in 2000.

The problem has a social solution

THE ANSWER to the housing madness is simple. It means massively expanding the amount of decent social housing available at affordable rents. Housing charity Shelter says that 90,000 new ‘social housing’ homes-council or housing association-are needed each year to resolve the crisis facing workers on normal wages.

Yet last year only 1,000 council homes and 19,000 housing association homes were built. New Labour continues to push councils into privatising their existing homes. The government’s housing minister, millionaire Lord Falconer, has a real crackpot scheme to stack prefabricated units in old hospital car parks and derelict land, and flog them to public sector workers. This will do nothing to tackle the real problems.

Falconer was recently asked a question about soaring prices making buying a house impossible for more and more people. ‘That’s a problem that the market has to sort out,’ was his answer.

The market is not the answer-it is the problem. The real solution is to tax the rich and big business to give councils the funds they need to build the decent, affordable homes people need.

That would enable workers to live where they want to at affordable rents. It would also create a pool of decent, affordable homes and so seriously blunt the pressure driving house prices ever upwards in many areas.

Meeting a basic need like having somewhere to live cannot be left to the market. In the longer term we should challenge the powers of big business to slash jobs at will. Decent jobs and decent housing should be created in the same towns and cities.

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