November 24, 2017

:

The Magic Money Tree -

Saturday, November 4, 2017

The Housing Wonderland by Ian Lewis -

Saturday, October 7, 2017

Will STPs finally wreck the NHS? -

Sunday, June 18, 2017

STPs – A new way to wreck the NHS -

Friday, February 17, 2017

Private health insurance doesn’t cover A & E!! -

Monday, January 30, 2017

Generation Rent are Thatcher’s Housing Legacy

Generation Rent includes many young people with degrees and good jobs who have no hope of buying a house or flat. They have even less hope of being eligible for social housing and are forced to rent in the private sector. Most of the good jobs are in London area and this is where the problem is most acute.

House prices remain high as demand outstrips supply flamed, in part, by the Government’s Help to Buy scheme. The natural corollary is that rents also keep rising and being a landlord becomes even more attractive to those with capital. Sixty per cent of Housing Benefit recipients are in work (90% of new applicants in London)1 as are all recipients of Tax Credits, and both these schemes look like a subsidy to employers paying low wages. However, most of the taxpayers’ money ends up in the pockets of the landlords!!

The cost of Housing Benefit2 was £22 billion in 2011 and it is not as simple as wages being too low but also, especially in London, of rents being far too high. To understand how this ludicrous situation has been reached, it is necessary to go back 70 years.

The 1945 election produced a Labour government that offered more than the empty rhetoric of Lloyd George’s post-World War1 slogan of ‘a land fit for heroes’. After launching the NHS, the government began an ambitious programme for getting rid of the slums and massively expanding council housing.

Successive governments, both Labour and Conservative, had a consensus – often called a mixed economy – and that included building council houses. A roof over your head was seen as much a right as education, the NHS and full employment.

Thatcher, a populist, ended this consensus, offering instead greed and selfishness, epitomised in the 1980 Housing Act that forced councils to sell off council houses to their tenants at big discounts. The Act also specified that councils must pay off all debt before they could use the proceeds of these sales for building new council homes. Since most councils had debt, this was the death knell for council housing.

Since 1980, around two million council homes have been sold and, as can be seen in Appendix A below (Government figures from 15th February 2013) only 1.2 million built. All the council houses sold are now lost from the social housing stock, giving a net loss of 800,000 homes over the last 30 years. And this over a period where the population has been rising!!

The figures also show that the mantra of reducing the public sector, in order to set private enterprise free, does not apply to house building! In the boom years, 2000-2008, the number of units built by the private sector was less than in the 1960s, when council house building was also at its height.

Any solution based on building more houses – private and/or social housing – will take many years to come to fruition but there are solutions that will alleviate a problem that has rapidly exploded out of control.

Firstly, there are empty house all over the UK and this includes large numbers in London. These need to be brought into use and a tax on empty houses could act as a financial catalyst to the owners.

Secondly, the vast majority of landlords use borrowed money to purchase properties, because this is tax efficient for them! There is tax relief on interest paid on the buy-to-let mortgage, which is really a subsidy and needs to be ended. The immediate effect will be to increase mortgage payments, which will, in turn, help to reduce house prices.

Finally, one of the last acts of butchery that Thatcher performed on society, before the Poll Tax rebellion toppled her, was to abolish rent control and security-of-tenure for tenants in privately-rented properties. The reintroduction of proper rent controls, coupled with security of tenure, would take the pressure out of the rental market and see rents being further reduced. Then less would be spent on housing benefit and a breathing space would be created to produce a genuine housing policy not based on the economics of the madhouse.

Why will the Government and the Opposition not consider this? Why is there no political will to look at a holistic solution to the housing problem? As long as governments continue to ignore the people who have elected them – and get away with it – Thatcher’s legacy will continue to blight the lives of many, especially young people looking to make their way in life.

Michael Gold

michael@radicalsoapbox.com

@radicalmic

1London Councils think tank @ http://www.londoncouncils.gov.uk/ 2https://fullfact.org/blog/housing_benefit_abuse_cost_taxpayers-3224

Appendix A UK House Building 1946-2011 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/86136/LiveTable241.xls

Year Private Enterprise Housing Association Local Council Total
1946        
1947        
1948        
1949 24,460 8,020 168,780 205,260
1950 30,240 7,290 167,900 205,430
1951 25,490 7,350 169,020 201,860
1952 36,670 10,130 201,520 248,320
1953 64,870 16,800 245,160 326,820
1954 92,420 22,120 239,580 354,130
1955 116,090 12,850 195,480 324,420
1956 126,430 9,850 171,390 307,670
1957 128,780 8,520 170,290 307,590
1958 130,220 8,220 140,200 278,630
1959 153,170 6,520 121,880 281,570
1960 171,410 7,240 125,620 304,260
1961 180,730 6,320 116,140 303,190
1962 178,210 6,030 129,410 313,640
1963 177,790 7,550 122,380 307,710
1964 221,260 9,790 152,140 383,190
1965 217,160 12,360 161,710 391,230
1966 208,650 14,890 172,470 396,010
1967 204,210 15,070 196,180 415,460
1968 226,070 15,320 184,450 425,830
1969 185,920 16,660 175,750 378,330
1970 174,340 15,210 172,670 362,230
1971 196,310 16,490 151,670 364,480
1972 200,760 11,220 118,960 330,940
1973 191,080 12,130 101,430 304,640
1974 145,230 13,870 120,540 279,630
1975 154,600 22,050 145,360 322,000
1976 155,300 23,100 146,440 324,840
1977 143,970 30,650 139,540 314,160
1978 152,230 26,,290 110,170 288,690
1979 144,120 21,390 86,320 251,820
1980 131,990 21,480 88,530 242,000
1981 118,590 19,700 68,330 206,630
1982 129,020 13,740 40,090 182,850
1983 153,040 16,820 39,170 209,030
1984 165,560 17,290 37,570 220,410
1985 163,400 13,650 30,420 207,470
1986 178,010 13,160 25,380 216,540
1987 191,250 13,150 21,830 226,230
1988 207,420 13,490 21,450 242,360
1989 187,540 14.600 19,320 221,460
1990 166,860 17,930 17,710 202,500
1991 159,140 20,820 11,060 191,020
1992 146,940 26,500 5,660 179,100
1993 146,380 35,910 3,360 185,650
1994 153,270 36,860 2,880 193,000
1995 156,930 38,760 3,430 199,120
1996 154,340 32,950 1,740 189,030
1997 161.230 28,340 1,540 191,110
1998 155,830 24,100 1,100 181,020
1999 157,930 23,730 330 181,990
2000 154,580 21,990 280 176,850
2001 152,650 21,090 360 174,080
2002 162,770 18,940 250 181,960
2003 172,620 17,260 250 190,490
2004 182,700 20,660 130 203,490
2005 185,850 23,490 230 209,580
2006 186,530 26,000 290 212,820
2007 198,480 27,660 280 226,420
2008 155,430 32,230 630 188,290
2009 122,520 35,050 840 158,410
2010 106,060 29,860 1,360 137,280
2011 106,620 32,200 3,090 141,920
         
         
         

 

Comments
2 Responses to “Generation Rent are Thatcher’s Housing Legacy”
  1. Liam T Kirk says:

    The problem is not so much what Mrs T did. It is the legacy of New Labour. More social housing was built in Mrs T’s last year in power than in the whole of the thirteen years of New Labour. It is easy to attack Mrs T, she was what she was, but at least she told you what she was going to do before she did it. A honesty that neither Blair or Brown never had.

    • Mike Gold says:

      Liam, Apologies for the delay in replying. I have no liking for Labour either but the Government figures I give at the end of the article clearly show that the total units of social housing (Council & housing association) built under Labour (1997-2009) were some way in excess of the number but built in 1989 & 1990.Obviously, with a 3 year lead in for building the figures are a little askew.

      However, I do agree that Blair & Brown were dishonest, whether more or less than Thatcher is debateable!!

      Michael

Leave A Comment