Wednesday, 15 April 2015

Right to Live

When we were looking to buy our first place in the winter of 2012-13, I met one of the most odious men I have ever had the misfortune to encounter.  He was an estate agent who showed us around a bizarrely modified Victoria terrace in New Cross, where part of the garden and rear of the house had been sold off to next door and made it an oddly cramped space.  We were, understandably, less than enthusiastic about something so compromised and right at the top of budget.

‘You just need to buy something,’ he told us.  ‘Anything.  I bought my first flat, twenty years ago when I was a waiter.  A few years later I sold it.  Big profit.  So I bought another.  And then another.  That’s how it goes.  That’s the only way to make money in this country.  It’s the only way to survive.’

‘What about the waiters of today?’ my not yet wife asked, aware that someone in similar circumstances is highly unlikely to be able to afford a flat.

‘Who cares?’

Thus we summarise the country’s selfish attitude to property; the British obsession.

I never saw myself as a property owner, and yet here I am.  To some extent pushed into it by my now wife, I none-the-less find myself pleased with the outcomes.  Not so much the owning itself – that causes anxiety and worries that people will notice how painfully bourgeois I really am – but because we live in the area I want to live in and should only find ourselves moving in circumstances of our choosing (or more general financial catastrophe) rather than the whim of a third party.  Following five rented flats (including two from which there were unexpected exits) in London over twelve years, I have developed a pathological hatred of moving, of packing all my stuff up into boxes and lugging it half a mile down the road.  I am sure the stress of being homeless for two months last time when everything went tits up didn’t help, but, whatever the psychological motivations, I’m keen on stability for the foreseeable future.

The big problem is that such a simple desire should be possible without having to buy a property.  The notion of short term renting until you’ve saved a deposit to get onto the mythological housing ladder is a construct of the eighties and the sell off of council housing.  The media highlight generation rent, those poor sods a few years younger than I (and many of my peers) who are trapped in a maze of rising private rents permanently preventing them saving for that manufactured dream, but being a majority nation of owner-occupiers is an invention of the late twentieth century.  In the past – the time of William Thackery’s Vanity Fair, for example - even the wealthy rented and long-term, even lifetime, rents were not uncommon.

The release of council housing stock for sale, ideologically framed as helping people secure their futures through home ownership ignored the fact that council renters were secure anyway and hid the market aspiration of speculation propping up a flailing economy.  Sure, there were restrictions on modifications to a council home, but compared to the draconian measures imposed by private landlords where bluetack is forbidden to even cross the threshold, things were positively libertarian.

By refusing councils permission to utilise the small revenues from the sales to build new homes, Thatcher’s government created the mess we’re currently in.  Insufficient purchase stock and unregulated rental stock pushes up prices with no security.  We find whole communities threatened with seasonal eviction because an American venture capitalist company has bought their leases as an asset and sees too small a return on their investment.  That particular assault on our basic right of having shelter was fought off – unfortunately with the support of Russell Brand - but there will be others.  London in particular is becoming a bank.  Bricks and mortar hold savings rather than bank accounts, pushing out people who actually want to live.  Swathes of West London are deserted, streets abandoned of life, boarded up shop units being converted into a studio flat for foreign investment which no-one will ever actually occupy.  Never mind not being a society I want to live, that isn’t a society full stop: it’s an investment portfolio.

There are some easy wins, solutions which would not be hard to introduce.  We could to tax empty properties, regulate the rental market and instigate a programme of building affordable housing: not just affordable to buy, but affordable to rent.

But it would also help if we ended this national obsession with property ownership as the only way to get on in life (he says, conscious of his hypocrisy as he sits in owner-occupied house).  We need to look to Europe in particular for more innovative ways to live.  The current trend of unsustainable housing bubbles fuelling credit sprees and inevitable crunching bust has to end.  At the moment we’re a nation of high stakes gamblers betting our homes on future pensions and wealth.  That’s just fucking nuts.

Henry Campbell-Bannerman has been referred to as Britain’s “first and only radical Prime Minister.”  It’s not an assessment I completely agree with, as we will see over the coming two weeks, but at the dog end of the Victorian era it is easy to see why contemporaries may have thought so.

The early twentieth century Liberals were great reformers and Campbell-Bannerman swept to victory in 1906 on the back of a large majority following a failed Tory bluff at the polls.  The reforms introduced were wide ranging and reaching, from education to free school meals, from protecting children from abuse to introducing pensions, health and unemployment insurance.  Suddenly the poor, the great majority of the country, had champions at the highest reaches of power.

Campbell-Bannerman resigned due to ill health in 1909, dying mere days later, and was succeeded by HH Asquith.  Asquith along with the new Chancellor, David Lloyd-George, drafted the People’s Budget.  A budget for a war, as Lloyd-George described it, a war with poverty.  High rates of taxes for the rich were designed to finance further, greater reforms, bringing Britain into the modern world whereby all of its citizens were cared for equally, in principle at least.

The Conservative dominated House of Lords blocked the Bill, much against the run of contention, but then they stood to lose the most.  Asquith called an early, snap election in the spring of 1910 and while his majority was severely dented, he was able to form a minority government with support from the first Labour MPs and the Irish Nationals.  When the Lords began to block the budget once again, bringing the country to a standstill, George V supported the government and threaten to flood the upper house with 500 new Liberal Lords, obliterating the Conservative majority.  The Lords duly let the Bill pass, and Asquith went back to the electorate in the winter seeking a mandate for reform which would change how the House of Commons and Lords interacted. 

Aside from laying the foundations of the welfare and social state that were built on in 1945, it is admirable that whenever serious change from policy or dramatic reforms were required the government was principled enough to ask the voters what they thought.  Despite this backfiring for the Tories in 1906 and the slim minority government of the Liberals this was still considered to be the decent thing to.  It is noticeable that over the past five years, which have seen some of the fastest, most sweeping changes to the state in a generation, the current government neither has a mandate nor has had the courage to seek one.

Buried within all this Liberal reform were changes to the Agricultural sector.  The Agricultural Holdings Act and the Smallholdings and Allotments Act were both designed to limit the interference of landlords on the quality of rural life and the capacity of individuals to farm.  The latter even gave permission for local councils to purchase land and to lease out at controlled rates, bringing down the costs elsewhere in the system.  The purpose of this was not only to improve the quality of life but to regulate a sector seen as a critical cornerstone of both society and the economy. 

Just over a century later, it feels like we need something similar for housing and we need a political party principled and dignified enough to do it rather than the resurrection of Right to Buy in the Conservative’s Tuesday manifesto release.  Ed Milliband managed to sound surprisingly statesman like in launching the Labour manifesto Monday and it was a solid, reliable pledge with a couple of kicking the very rich in the balls headline grabbing policies, but ultimately it didn’t go far enough.  The Tories, meanwhile, hark back to the eighties and rehash old ideas.  Right to Buy?  That’s what caused most of the housing mess in the first place. 

Indeed, all Right to Buy did was create a new generation of private landlords, not home owners.  The majority of Right to Buy properties were flats and small houses in inner city locations, sold at a significant profit as the original owners retired to the country or moved.  A significant volume – over 40% in one London borough alone – are now in the hands of private landlords, sometime being leased at far higher rates than the council owned equivalent.  In some cases, the rent will subsidised by the state through housing benefit meaning that we, the tax payer, are paying more for something we once owned as an asset because of a political whim.  The son of Thatcher’s housing minister, unsurprisingly, owns 40 former Right to Buy properties.

What we really need is a building programmes.  All the parties make promises to build a modest number of (often sustainable, except UKIP, obviously) homes, although the Conservatives promise to encourage the private sector to build more homes rather than actually build many themselves.  That’s what Help to Buy, the last Parliament’s flagship housing policy, was originally supposed to do, until it became apparent it wasn’t going anywhere because the industry hadn’t flooded its own market with newly built homes to buy so they extended it to all properties exasperating the problem, but giving the economy a leg up.

The Lib Dems’ policy of introducing Help to Rent is going in the right direction by aiming to get people in their twenties out of their family homes and into rented accommodation therefore encouraging the parents to sell and downsize thus freeing up housing stock for those just starting a family.  Nice idea, but it fails to recognise that no-one’s going to do that because the one-way housing bet is shoring up people’s pensions and their possible old age care home costs.  There is no incentive to downsize.  Indeed, the Tory promise of Inheritance tax cuts, of ensuring housing’s value is safe from the tax man just supports this whole fragile house of cards.

An Englishman’s house is no longer his castle, it’s his bank account.  Cameron keeps blaming the 2008 recession on Labour, but hold on: wasn’t an over-inflated housing market and sub-prime mortgages something to do with it too?  But no-one wants to hear that story.

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