Tuesday, 21 August, 2018

The Government’s recent Green Paper and its initiative on rough sleeping has meant that housing and homelessness have been high on the news agenda in the past week or so. Joan Grant, blogger and Equality Trust supporter, has written a guest blog which gives a timely and valuable historical perspective to the ongoing crises we face.

Housing policy has seen enormous change in the past 40 years. Mrs Thatcher, famously, wanted to turn Britain into a property-owning democracy. It has not worked. In this article, I want to sketch out the changes in housing policy that took place from the 1970s to now. 

Council housing, as we understand it, expanded significantly after the first World War.  Over the next 60 years, estates were built the length and breadth of the country that provided genuinely affordable housing for working people. From the late 1970s council houses were sold off to tenants under the right-to-buy policy. Mrs Thatcher was adamant that local authorities would not be allowed to use the revenue generated from the sales to replace the homes sold.  As a nation we pretty much stopped building new council houses from the 1980s onwards. Some council housing estates fell into decline and people did not want to live there. As a result, the council housing sector suffered a loss of esteem and social status. 

Alongside local councils, housing associations (many of them with philanthropic roots such as the Peabody Trust) also developed housing for working people. In the 1980s, the government met the full cost of new homes built by housing associations but that subsidy has been greatly reduced over the years, in many cases down to nothing. This meant that housing associations could only develop if they built new homes for sale. Then, a new concept of the “affordable house” was created. This is a house where the rent is typically 80% of local market rents. For people on low-to-middle incomes these rents are still often not affordable (it is also worth noting that, last year, housing associations were re-classified in the national accounts and deemed to be private sector bodies).   

In 1977 a law was passed which gave private tenants security of tenure. Also, the Rent Officer Service was brought in to run a system of controlled rents.  That law was replaced in the late 1980s by a new law which ended security of tenure for tenants. Deposits and a month’s rent in advance can now be charged. In London, for example, this can be £2,000 or more.  Also, the standard tenancy is now just 6 months. The control of rents by the Rent Officer Service was ended for new tenants; it remains for existing tenants and is now part of the Valuation Office Agency. Landlords can now evict people even if they have done nothing wrong. These so-called  “no-fault” evictions are a major, current driver of homelessness in the UK.

Meanwhile, house prices have risen steeply over the past 40 years and home ownership is now unaffordable for people on average incomes. The Coalition government introduced the Help to Buy policy. The Government currently spends £32bn subsidising home ownership with starter homes and Help to Buy, whereas only £8bn is spent on affordable homes.

It seems to me that the concept of inter-generational fairness/unfairness is the wrong lens through which to view these issues. The fact is the rules of the game have changed completely. We now have a situation of “housing-haves” and “renting have-nots” as well as increasing levels of homelessness ranging from the precariously housed to those dumped out on the streets. The UK is, indeed, a House Divided.

Joan Grant.

This is a guest blog and the views of the author are not necessarily those of The Equality Trust.

Suggested further reading: 
- Duncan Bowie - Radical Solutions to the Housing Supply Crisis, Policy Press, 2017. 
- Municipal Dreams – John Boughton, Verso, 2018. 

Joan Grant blogs at www.futureofbritain.org.uk