The Great British Housing Disaster

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Jan 26, 2016 Comments Off on The Great British Housing Disaster John Butler

The years of Coalition and Conservative-led housing policy have been an unmitigated disaster for Britain. Our countryside is being destroyed at an ever increasing rate, the identity and social cohesion of rural towns and villages is under threat from massive over-development. And yet at the same time, new housing is becoming increasingly unaffordable for the young people who really need it, and many of Britain’s new homes are being bought as purely speculative investments to make profits for overseas buyers. How has this appalling situation come about ?

In 2012, David Cameron told BBC Countryfile that he would no more put the English countryside at risk, than ‘his own family‘. He told viewers: ‘Our vision is one where we give communities much more say, much more control. The fear people have …… is of a great big housing estate being plonked down from above …. ‘

For many, the reality has been very different. A CPRE study in 2013 showed an unprecedented number of appeals being allowed by government inspectors against the wishes of local communities, for housing developments on Green Belt land. In 2012 – 2013, thirty nine major housing developments were allowed on Green Belt land after appeal, double the number from the year before. Overall, the number of major housing developments granted on appeal rose from around 30% in 2009, to 46% in 2013.

The number of new homes being built on Green Belt land more than doubled under the Coalition. Recent figures in a report by planning analysis company Glenigan, show that 15 new houses are being approved on Green Belt land every day. 2014 saw the approval of 5,600 new houses on Green Belt land, compared with just 2,260 in 2009/10.

The CPRE estimate the government has allocated land for 729,000 new houses, of which 190,000 will be on Green Belt land. Yet according to the government’s own figures, there is still enough suitable brownfield land available for 1,500,000 new houses, as well as around 750,000 empty properties that are not in use !

Although an unprecedented number of new houses are being built on greenfield sites, the 1980’s dream of Britain as a property owning democracy is receding ever further into the distance. Figures from the EU statistical agency, Eurostat, show that home ownership in Britain has fallen to 64.6%, compared to 70% in 2005 (EU average 70%). The vast majority of new houses that have been built in the UK since 2000 have been bought by private landlords; 2.5 million were bought by the private rented sector, with only 400,000 being bought by owner/occupiers.

For Britain’s young people, the outlook is particularly bleak. If home ownership had continued at the level of a decade ago, 1.4 million more people in their 20’s and 30’s would now own a home. But in that time, home ownership among the under 25’s has plummeted, with the average age of a first time buyer in London now over 40. The vast majority are now dependent on the Bank of Mum & Dad to buy them a house.

Average pay for the 22 – 29 age group is now only £9.73 an hour; 10% lower than in 2006. For 18 – 21 year olds, average pay is £6.73, 8.8% lower (barely more than the minimum wage). The Resolution Foundation estimate a record 5 million UK workers are now in low paid jobs. Those earning less than two thirds of the average hourly rate of pay rose last year by 250,000 to 5.2 million. Significantly few of the ‘new jobs’ that are being trumpeted by the Coalition have any of the long term stability or career prospects to enable young British people to earn even a living wage, never mind take on the commitment and responsibility of a 25 year mortgage.

Declining pay figures don’t fully take into account the impact of inflation busting rises in the costs of living essentials such as food, fuel, energy and of course, housing. An analysis by Rightmove suggests that property values in the next 5 years are set to rise by 30% nationally, with a 37% increase in the South-East. The average UK home now costs £262,823; nearly 10 times average earnings.

These figures mean that for most British youngsters, their future ‘home’ is likely to be at best, a spare room with Mum & Dad (assuming they haven’t been forced to move out by the Bedroom Tax); a shared room in a collective hovel run by a slum landlord at exorbitant rent, or finally a ‘bed in a shed’ in someone’s else’s back yard.

This bleak situation has been made even worse by recent developments in the housing market, whereby UK property has now become an alternative international currency. A stampede of Chinese, Russian and other overseas buyers are targeting the British housing market, driving up prices and creating a shortage. In London it is estimated that 85% of prime property purchases are now being made with foreign money. With rising London property prices, foreign speculators are now targeting lower priced homes elsewhere: houses in South Wales, Somerset cottages, flats in Manchester, Liverpool and Sheffield are among the properties being offered to foreign investors on estate agents websites in China and Russia.

Chinese estate agency, Juwai estimates that 63 million Chinese are now wealthy enough to afford a property abroad; increasingly Britain is seen as a target market. Industry insiders believe that some British properties are being offered for sale in China before they even go on sale in the UK. Cheshire property firms Assetz, says that around one third of its UK sales in August 2014 were to Chinese buyers. Michael Sacks (Secure Property Investment), says: ’We know that Chinese investors are securing entire developments and then selling them on for significantly more than they are actually worth; 25 – 35% in some cases’

In summary, Coalition and Conservative-led housing policy has been an unmitigated disaster. The UK government could cover the entire countryside with houses from Land’s End to John O’Groats, it still wouldn’t make our housing any more affordable or provide homes for those who really need them.

So how can we start to put it right ?

What many people are unaware of is that Britain’s housing policy is driven entirely by central government, based on crude projections of UK population growth. Local Council’s have very little power to alter or amend government imposed housing ‘targets’ ; all they can do is try to mitigate some of its more harmful side effects. This needs to change.

Firstly, we must control our unsustainable population growth by ending the UK’s open borders with the EU.

Secondly, local Councils must be given more power to decide on what levels of development are necessary and desirable for their areas. They must be given the resources and allowed if they wish, to build their own low cost rental accommodation for young families and those local key workers most in need.

Thirdly, radical reform of our ‘open’ housing market is long overdue. Ordinary British homes must not continue to be used as a speculative commodity, to be traded internationally for the profit of overseas buyers.

Finally, we need some imaginative government funded incentives to re-use all those empty homes and encourage the re-development of brownfield land.

(May 2015)