In my world, the idea of actually owning my home was laughable as my great grandparents
were either in service or moving around looking for work between fighting in wars.
Obviously all in rented or provided accommodation. Grandparents in rental property,
but more settled between the wars, then my parents found local authority housing
were the norm with employment easier to come by. Councils were able to borrow money
long term at very good rates direct from the government.
They didn’t have to travel far to find work and generally they considered any job
was one for life. This continued even once I had to join the employment market as
an apprentice with the local Electricity Board. Even my wife ended up at a subsidiary
of a small company called BP oil. But enough of that.
The real turning point in the housing market has to be the Conservative government
idea that everyone should own their own home. This really followed scandals over
private landlords ripping tenants off with sub-standard housing conditions. House
prices were rising and the government felt that increasing home ownership would put
money in the public purse, the publics pocket and reduce reliance on private landlords.
Indeed,everyone seems to be a winner! - even the financial institutions, which couldn’t
be all bad.
So what went wrong? The public (and councils) were led to believe that under the
‘right to buy’ rights, the monies would go to the home owners (Council) to fund new
housing schemes, only the treasury simply pocketed the money to keep taxes down and
ensure the Conservatives stayed popular and stay in government. Politicians being
politicians really couldn’t see outside their little bubble (like the South Sea one)
so it was inevitable that something had to give. Builders built up land banks as
who would buy a new home when they could buy the one they already occupied at less
cost than renting? The Private Finance Initiative (PFI) was born out of the situation
that was rapidly developing as interest rates where rising steadily resulting in
any homes being built, were becoming more and more unaffordable (remember mortgage
rates at 15% - I do!). Add in the financial crashes of the 80’s and 90’s and the
result was unemployment, public expenditure rising to meet demand and a change in
government in 1997.
So what is the solution? It strikes me that we have a social problem, an expectation
problem and a financial problem.
The social problem is two fold. One is the way the family unit is so fragmented at
the moment leading to housing demands that bear no relation to actual need. Everyone
expects their own little space from an earlier and earlier age and when coupled with
the expectation that no matter what, the state will take responsibility and provide
whatever is wanted (actual need is ignored). The financial aspect is that someone
else is expected to pay.
Political policies and decisions taken over the past 50+ years are the result of
the situation we are in today as far as housing is concerned. Being fair, many factors
are the cause but we cannot turn the clock yet, so lets see what can be done in the
here and now. In the past, building of high rise flats was seen at the ideal solution,
but it may work in some countries, but a small island such as ours needs less concrete
and more ‘breathable’ areas is we are to satisfy the idea of living in a nice environment.
The excuse that builders come up with land costs/availability and a skilled workforce
(mainly brought about by them not training a future workforce). Prefabricated homes
are cheaper to provide and have less delays caused by weather, resulting in faster
provision. The idea is not new, as following the last world war, it worked to provide
homes with facilities unheard of up until then such as inside WC, heating, refrigerators
and a small garden. Naturally, no room for 3+ cars, so public transport would need
to be improved and local employment provided. The only fly in the ointment is the
time scale required as it would need a long term political plan - look how long Milton
Keynes has taken. Seems the solution is a candidate for the government ‘nudge unit’
to work it’s magic rather than political theories and, of course, the parties would
need to work together in partnership. Talk about wishful thinking!!
Going back quickly on the housing subject. I see in the press that an unmarried mother
of 4, is complaining that the local council won’t provide suitable housing for their
needs. The report then goes on that the mother turned down the accommodation offered
by the council so her parents are having to house her with her children which is
just not on. You must forgive me if I question what the father is doing to support
his children and exactly what is she expecting to happen. As this was the Daily Mail,
do I believe it? Unfortunately, I do, which is where the social problem begins.
It’s all solved. Housing Associations will now be allowed to borrow as much as they
like to build social (affordable or simply cheap?) homes and all that borrowing is
now their problem rather than the governments (more here).
The budget suggests that housing will reach 300,000 new builds within as few years
so as to meet the demand they say is there. Sadly I’m old enough to remember when
house prices rose by only 1 or 2% a year and most rented either council or private
homes as it was cheaper. Not until the late 1950s and early 1960s did it become worth
‘investing’ in your own home as they went up more in price than wages in your pocket.
The real clincher was the right to buy when it became cheaper to buy than carry on
paying rent. I’ve been trying to think just who had this idea to push home prices
out of reach of the ‘normal’ family. Any ideas??