This web site is mostly concerned with the chaotic state of UK Housing Policy and its deliberate use of Housing Benefit to establish a Private Rented Consumer Service. It also puts forward a view on the emergence of the Global Computer Economy, which is unrelated to the failures of housing policy, but has precipitated a crisis in which the poor, first trapped into dependence on housing benefit, are now being blamed for excessive subsidies and scapegoated for the most savage cuts.
The Introduction section presents the case, more or less completely from the development of council housing to the current state of housing policy. It also proposes the solution of a Complementary Housing Policy. A Complementary Housing Strategy recognises the complementary and supportive interaction of investment housing, wether it is council housing co-operative housing or home ownership and it adopts a policy strategy, which enhances those complementary interactions.
The UK Housing Policy section is an earlier presentation of the same case, with greater detail in some respects, but also with more reference to the political debate of the last few decades.
The Archive section includes much older pages from the site, which may have some useful content.
Conservative housing policy abolished the post war low cost rented housing system and replaced it with a high cost private rented consumer service. They made this policy very difficult to reverse by selling the publicly owned housing stock very cheaply. Four million houses (worth about £400 billion at current prices) were sold at less than one half of their market value. Their belief in the revival of the private rented system verged on the edge of insanity. It hasn't worked, it has failed to produce a supply capable of meeting the demand and, of course, it failed to offer rents that people could afford, which has necessitated a large increase in Housing Benefit.
Nine years ago this site pointed out that the escalation of Housing Benefit to £12 billion was being unrealistically sustained by a strong economy and predicted that a down turn in the economy would inevitably lead to a collapse of the policy. Well, the global credit crunch has brought us to that point in time. In the last ten years, Housing Benefit costs have risen fron £12 to £21 billion per year. The question now is whether sanity will return as housing policy moves into a new state of collapse.
The Big Issues Of UK Housing Policy
Post-war public investment in low cost rented systems
- eastablished large (~30%) stocks of low cost rented houses
- cleared slums, raised housing standards and enabled families to prosper
- stable house prices were increasingly affordable to children raised in rented housing
- the development of equity in the rented stock rapidly reduced the need for subsidies
- the established stock, with continued building, became cost balanced by 1971
The UK low cost rented housing sector was abolished in 1971
- At the very time that affordable low rents and investment stock costs achieved balance, the rents were increased to support a private rented consumer service.
- The policy to double council rents was announced in 1971 and the right of councils to set cost balanced rents was removed.
- The UK house price market rose to a higher level and became extremely unstable
- Peer nations in Europe who retain large low cost rented stocks enjoy stable house prices.
- Housing Benefit cost escalates and creates a new socially trapped class of propertyless poor.
- Social mobility and child poverty, are amongst the worst in europe
- More tangible inheritance of poverty. 40% of first time buyers depend on help from property owning parents.
The structures of housing finance - The Dilemma of the Single Option
- Deregulated rents supported by housing benefit make private rents just as expensive as a mortgage loan
- If you can't afford to buy then you can't afford to rent.
- For first time buyers: To buy becomes an imperative because it is a life defiining decision.
- Higher risk loans increased from 2.5x income to 5x even 10x income.
- Risk translates into larger loans, higher prices and rapid panics, which make the market unstable.
The Budget June 2010 - The logic behind cuts to housing benefit
- High rents create a dependence on housing benefit, which traps the propertyless poor with no chance of escape.
- The credit crunch due to bank and enterprise greed has cut the loans available to house buyers.
- We have sold off the post war investment in low cost rented houses.
- We have replaced the investment stock with a high cost private rented consumer service.
- Arbitrary cuts of Housing benefit, which have been out of control for 40 years is not a solution.
- Cuts in housing benefit will cause the propertyless poor to become homeless poor.
UK House Prices have been very high and very unstable for nearly four decades before the credit crunch.