Tag: Housing

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We need a radical approach to the housing crisis

An answer prompted by George Monbiot’s article in The Guardian.

The Guardian

I agree with Monbiot that “government policy has created heaven for landlords and hell for tenants”.

I’m a tenant, I always have been, and probably always will be. Not through choice but because I’ve never been rich enough to buy. As tenants we’re treated like children, constantly reminded, it’s the landlord’s house we’re living in, not a property we’re paying to call our home.

All tenants are made to feel beholding, as if we should be grateful to landlords for letting us rent their property. It’s a completely asymmetric relationship. How would you feel if someone turned up at your door, and just let themselves into your home? It makes you feel vulnerable, as if you have no agency.

I think we need a radical approach, one that puts tenants front and centre. Yes we need rent controls, but also guaranteed long term leases. Terms of five or ten years should be the standard. Everyone needs that kind of stability to make a life for themselves.

There should be a register of landlords. You need a license to drive a taxi, you should have a license to rent out property. Tenants should be able to report poor conditions, neglect of a property, or abusive behaviour, without fear of eviction. A register of landlords would go some way to keeping both parties safe.

I think the owners of a ghosted property should be fined. Not small, slap on the wrist fines, but value of the property fines. Investors then have a choice, sell their ghosted property, or let them at rent-controlled rates. Similarly second homes, or holiday homes, should be either treated as ghosted properties, or taxed out of existence.

Mortgages should be calculated not on earnings, but on a proven ability to pay rent. I would argue paying rent is better indicator of someone’s ability to repay a mortgage than earnings. If lenders require a deposit, they should be offered to individuals by the government, in the same way as student loans are, and similarly administered by HMRC.

The problems with the housing market have been created by decades of poor political choices.

For the sake of everyone, we need to do better.

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Universal Basic Income

I agree with Neal Lawson in his Labour List article, that “the aftermath of Brexit must be the creation of a 21st-century system of social security with BI at its beating heart”.

Labour List

But Universal Basic Income is not the entire solution. There are two key areas that need attention if basic income is to work. The first is housing. The second is transport.

Housing in this country is an expensive mess. If private landlords are the model we use to house those unable to buy, then we need controls on the renting market. We need a register of landlords, so unscrupulous landlords can be identified and barred from letting property. We need long term leases, five or ten year, so tenants have the security they need to plan a future. Finally, and most importantly, we need a ceiling on how much rent a tenant can be charged. We need to move away from a “market” led system, that has turned average incomes into poverty wages, we need a system based on incomes. Rents should be capped, set at say thirty per cent of a tenants take-home. Policies like this are the only way to make rents affordable.

The second issue that needs attention is transport. Public transport is expensive. The price of a season ticket rises as fast as service standards fall. Bus services are streamlined as sure as fares go up. Public transport needs to be cheap, and plentiful. That way it would become the affordable choice for most people.

A secondary benefit of cheaper housing and transport is spending power. If people weren’t made poor by housing and transport costs, they’d have more money to spend in the wider economy.

Finally, we shouldn’t see Universal Basic Income as an expense, it should be seen as an investment, a way to stimulate the entrepreneurial spirit in people. The reason many people do not start their own business is the crippling consequences of failure. If you mitigate the consequences with a basic income, people would be much more likely to make creative choices.

The idea of a basic income isn’t new, the richest families have been using the system for centuries. Rich parents routinely fund their children, at the very least offering a cushion that breaks the fall of failure. You’re much more likely to take a risk if your failure is mitigated by family wealth.

A basic income would offer a cushion to the many not just the few. It would free people to be creative, entrepreneurial, and much more productive.

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World’s first habitable 3D printed houses

The Guardian

I’m really interested to see comparative costs with traditional construction methods. Could it be one part of the solution to the housing crisis in the UK. At the very least it’s another square on the Grand Designs bingo card.

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A radicle solution to the housing crisis in London

This article in The Guardian reports there are 1,652 properties listed as unoccupied in Kensington and Chelsea.

https://www.theguardian.com/society/2017/aug/01/names-of-wealthy-empty-home-owners-in-grenfell-borough-revealed

That’s 1652 properties that could be used, not as an investment, but as homes.

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(This map shows London’s 20,000 empty homes: Time Out: May 10 2017)

It is estimated there are twenty thousand “ghost” homes across London. That is twenty thousand properties that could be a home to someone.

That is an outrage.

There are many reasons for this, not least because interest rates have been kept at ridiculously low levels since the 2008 crash. Those who have money, have been buying property because it gives them a return. This nugget of information was given to me by the estate agent who sold the flat we rented, when our landlord wanted to sell. Throw into this mix foreign nationals, encouraged by UK based estate agents to buy as an investment, and you have a deepening crisis.

Most people, even those on above average incomes, are priced out of the market.

There are a couple of thing that could be done to stop this kind of hoarding. Interest rates could be increased so those with assets get a decent return on their money. This might force the prices down so hoarding brings less of a return. If interest rates went up, some of those who’ve benefited from historically low interest rates would not be able to afford their mortgage, properties would be repossessed, releasing property into the market, forcing prices down.

This brings with it a whole level of misery I wouldn’t wish on anyone. I also don’t think it would have the desired outcome. I suspect the repossessed properties would be swallowed up by those with pockets deep enough to speculate.

The other strategy is more radicle. The fist half involves extending the rights of private tenants. We need laws that give renters long term leases. Not six or twelve months but five or ten years. People need that kind of stability in their lives. These long term leases also need to come with rent controls. The second half of this strategy is to force the owners of all property that sits empty to become landlords. Your property sits empty for more than six months, you have to rent it out, on a long term lease, at rent controlled prices. Investors will either sell their property because they don’t want to be landlords, or the properties would be used as they were intended, as homes for people to live in.

I can just feel the vitriol coming my way, but the neoliberal market is broken, and we need radicle solutions. These are about as radical a way to home people as I can think. Yes build more affordable homes but also put the stocks we have to better use.

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Just a thought

Just another quick thought regarding my previous post. Part of us securing the new lease is having to submit credit reports and references. Understandably our landlord wants to check that we are reliable. Throughout this process the subject of the landlords reliability has not been bought into question. This strikes me as entirely one sided arrangement.

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The stress of moving

We are moving from the flat we have lived in for about fifteen years. We’ve found another place to rent in Streatham or as the marble mouths who want to gentrify the borough insist on calling it, St. Reatham.

Our current landlord has been great but periodically, for one reason or another, floats the idea of selling. The last time was earlier this year. He eventually told us to hold fire but it put the wind up us a little so we kept looking.

At some point he was going to sell. Better for us to jump now rather than wait to be pushed. Finding the right place has taken a while but we think we’ve found somewhere nice but more importantly somewhere that has the potential to be long term.

The idea of finding somewhere quickly is horrible, not least because it puts us at the mercy of that loathsome profession, the letting agent. I hate letting agents! I hate dealing with them. I hate being at their mercy. I find them unnecessarily rude. They have the social graces of an autistic teenager. And worst of all I hate feeling like I’m being ripped off. How they justify charging twice for the same service is beyond me? They charge you for finding the landlord a tenant while charging the landlord for their services. Make no mistake a letting agent works for the landlord. The landlord hires them to look after the property not the inverse.

Thankfully we found our new place through a friend of a friend so we’re being spared the stress and indignity of dealing with an agent. We, like most people, would love to buy somewhere. The relative security of property ownership is attractive but because we rent the prospect of buying is an Everest of a problem. Even if we were pulling down above average earning, which we’re not, there wouldn’t be a lot left to save after you pay ever increasing rents, utility bill, travel and the basics of living. Bottom line, the cost of living in the United Kingdom and London in particular, is too high.

Cost of living high. Prospect of saving low. No savings. No deposit. No deposit. No buy house. Even if we took advantage of the governments new help to buy scheme we’d have to find more than £17000 to place a five percent deposit on the flat we currently live in.

We, like an ever increasing number of people, have to face the idea that we will never own a property of our own. This is a problem on so many levels it would take a book to cover them all.

The immediate political problem is that if there’s a generation who have no choice but to rent, something must be done to help them, improve their rights, make it fairer, more affordable, less vulnerable to the vagaries of the market, more long term, and most of all devoid of autistic teenagers.

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All that glitters is not gold

I heard yesterday, the average age of a first time buyer, not supported by the bank of mum and dad, is thirty-seven. Thirty-seven years old before you have enough financial history to leap the hurdle of deposit and get a mortgage. Mid-life before you can start to buy a house of your own. And things are only going to get worse.

As the ramifications of the recent financial collapse continue to unfold. It is not inconceivable that the average age of a first time buyer will push beyond forty. This delayed ability to join the fraternity of home owners will have a devastating effect on any buyer’s ability to repay a mortgage before retirement. That’s a lot of people who will never be able to get a mortgage. Never be able to buy a house.

Some might look at the current situation and argue we are going through a “natural” period of correction. Reduced numbers of first time buyers will force down the inflated price of housing. Thus allowing more first time buyer’s to enter the market. Perhaps that is true. What is more likely is that those who already have equity will be able buy up cheap property and build their portfolio. Fuelling the ever increasing rise in prices. Pushing the average age of first time buyer’s up even higher. The truth is. A lot of people will never be able to buy. And will be forced to rent for their entire life.

The usual argument against renting is that it is a waste of money. You give away all that money. And have nothing to show for it. But renting is only an issue if you look at your life as the accumulation of wealth. If you look at rent as the cost of living. It becomes less of an issue.

So why are we so obsessed with owning property in this country? Margaret Thatcher made it the cornerstone of her monetarist agenda by selling off our stock of council housing in the eighties. She sold the family silver to socially engineer the reduction of the welfare state. She made property a pension. Ask yourself. What happens to all this house wealth in the end? It is rarely passed on to the next generation. More often than not. It is levied to pay for the home owner’s retirement. Or worse still. Sold to pay the cost of residential care.

So what’s going to happen to the increasing number of people who will never be able to buy? They won’t have the cash-cow of a property to fund their retirement. What does the future hold for them? Will they have to continue working well beyond the statutory age of retirement? Or will they be abandoned, forced to live in abject poverty? That won’t happen. The state will step in and help. What state? The current government stated aim is the reduction of the state. Less state. Less help. So private companies will come to the rescue and fill the gap. What sort of care will those who don’t have property to levy actually get? The answer. Not very good care. The state will pay them? I don’t think so. Charity then? Charity will step in to help the venerable. How very progressive. It’s that kind of thinking that consolidated the need for the labour movement in the nineteenth century.

Perhaps that’s where the future lies. The rise of a genuine labour movement in this country. Will people’s inability to buy actually change people’s understanding of the world? Perhaps the coming privations will galvanise enough of us to finally force real and lasting social change for the better. Perhaps it will reawaken left-wing politics in this country.

The sceptic in me doubts it. I would love to be wrong. But I think the vast majority of us have been blinded by the glitter of wealth for it’s own sake. We’re in love with the big screen televisions that stream advertisement for the cult of celebrity like “The X Factor” and the soon to be gone “Big Brother”. We’ve had these bright lights for too long. Perhaps so long. The glare has blinded us. Made it hard to see. All that glitters is not gold.

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