Our housing crisis will dominate the political agenda for decades
12-15-2014
Voters who are denied an affordable home will grow increasingly angry and frustrated
Protestors marching to save social housing at the New Era Estate in Hackney Photo: JULES ANNAN
By Mary Riddell
The redbrick square that has begun to symbolise Britain’s housing crisis is aptly named. Built in the Thirties to house local workers at modest rents, the New Era estate in Hackney, east London, is a metaphor for a dawning age of insecurity.
Earlier this year, the block of 93 flats was bought by Westbrook Partners, a US-based property investment group. Westbrook, in turn, handed the management to the Benyon Estate, co-owned by the Tory MP Richard Benyon and run by his brother. Last week the Benyons, who bought a small stake in the estate, announced that they were pulling out after protests by residents fearful of rent rises.
The success of the protest campaign, backed by Russell Brand and other celebrities, turned out to be a Pyrrhic victory. Hackney council now fears that, with the Benyons gone, Westbrook will ignore a previous agreement and accelerate a programme to refurbish the flats and let them at market prices. That could lead, in some cases, to rents rising from £600 a month to around £2,400.
Karen Orlans, a school administrator, has lived in her two-bedroom flat for 20 years. By any yardstick, the Orlanses are the kind of “hard-working family” hymned by politicians. Karen’s husband is a cab controller, working 12-hour shifts; her older daughter attends a local university; and her younger daughter is studying for her GCSEs. This close-knit family in a settled community now faces seeing its certainties disappear. “We don’t know what is happening,” Karen Orlans told me. Some of her neighbours fear they will be on the streets by Christmas.
New Era is not unique. Councillor Philip Glanville, Hackney’s cabinet member for housing, reports “plenty of mini-New Eras, where flat rents are rising at 10 per cent a year”. Meanwhile, creperies and juice bars are replacing pubs and corner shops in a borough where house prices have gone up by more than 27 per cent in a year.
Far from being peculiar to the capital, the divides emerging in gentrified London are an augury of a housing crisis that will afflict all of Britain.
Research conducted by Heriot-Watt University and published this week by the Joseph Rowntree Foundation explains how such trends might play out 25 years from now if no action is taken. With fewer people buying their own homes and social housing continuing to decline, more families will move to privately rented properties. By 2040, rents are forecast to rise by 90 per cent from 2008, twice as fast as incomes. The average private rent, now £132 a week, would rise to £250 in real terms.
With an extra 2.6 million renters thrown into poverty, housing benefit costs could increase by 125 per cent, adding £20 billion to the current bill. When £9 billion in state housing benefit is already handed every year to private landlords and when individual deprivation is bound up with public profligacy, the nation’s economic recovery and social cohesion are both at risk. As Julia Unwin, head of the Joseph Rowntree Foundation, says: “Housing is the thread that runs through everything.”
Inter-war Tory politicians understood as much when they replaced slum housing with municipal estates. A post-1945 Labour government went further, placing no limit on the number of homes the state was prepared to build. Now, with that commitment long gone, more house-building is not only central to recovery and to citizens’ health, happiness and security. The lack of decent homes also explains, at least in part, the contempt for mainstream politicians who fail to meet the basic needs of any civilised society.
It was only a matter of time before housing, in one way or another, became a key issue in the Rochester and Strood by-election, which is expected to deliver a Ukip victory tomorrow. In a final attempt to thwart the insurgents, Tory strategists suggested that a win for Mark Reckless would depress property prices by thousands of pounds. One Conservative MP is said to have claimed explicitly: “The danger is if you vote Ukip, the value of your house will go down.”
Fears over housing are usually much more likely to be voiced by Ukip supporters. Lord Ashcroft’s polling suggests that around a third of people report a personal impact from immigration, with 24 per cent mentioning competition for housing. Sunder Katwala, head of the British Future think tank, cites the importance of “fair and transparent” local criteria for housing allocations if that significant minority is to be appeased.
In a pamphlet published today, British Future also warns politicians to listen to people’s justified concerns about immigration, rather than shifting the conversation to safer topics. That theme was echoed yesterday by Yvette Cooper, who said that liberal commentators and business leaders are too quick to dismiss concerns about immigration.
While that criticism is no doubt fair, voters’ current unease is forged by broader worries about migrants as well as by tangible impacts on their own lives. With the chronic lack of housing certain to get worse as the population increases and affordable rents evaporate, it seems likely if not certain that the resentments of those who lose out will harden.
Language matters, but a change of tone by Labour plus a promise of more border guards will not alleviate specific fears, such as a lack of affordable homes. The major house-building programme recommended by Ed Miliband’s housing reviewer, Sir Michael Lyons, is welcome, as is the move by Emma Reynolds, the shadow housing minister, to compel private renters to offer three-year tenancies with limited price rises.
Even so, neither Tory pledges to resurrect stalled house-building nor Labour’s plan for 200,000 new homes a year by 2020 will meet demand. Any incoming government will also need to build more subsidised social housing, bring in an orchestrated programme of fairer land and property taxes (as opposed to a crude mansion tax) and raise the cap on council borrowing. When the red lights of recession flash on Mr Cameron’s dashboard, local authorities must again become the builders of last resort.
No other EU country counts public borrowing for building homes as an add-on to public debt, regarding it instead as a commercial loan that will be repaid in rent and in the unquantifiable benefit of social cohesion. If the irreducibles of existence are love and death, homes are their concrete equivalent. When a nation is well-housed, then other problems – not least fear of immigrants and scorn for politicians – melt away. If, on the other hand, families lack the basic security of a home, then social ills and unrest will surely follow.
In 1946, Aneurin Bevan condemned as “wholly evil” the pattern of ghettos inhabited by rich and poor. Almost 70 years on, that “monstrous” community segregation has become entrenched in ways that post-war leaders would not have countenanced.
That is why the fears of a group of Hackney tenants should resonate beyond the Monopoly board of the London property game. The fate of the New Era residents may be a portent of problems that will convulse Britain for years to come. Politicians of all parties should take time to visit the small redbrick enclave that is becoming a byword for a growing housing crisis. They will find themselves staring at the future.