Housing for whom? A view from London
By Pat Turnbull This article is an edited version of a talk given to Ealing Central and Acton Constituency Labour Party
In 1977 I was a young teacher. I was sharing a private rented flat with my husband and another couple. Just before I had my first child we got a Greater London Council flat in Hackney. It was tiny and on the fifth floor without a lift, but I was very excited and happy. No teacher in London would get a council flat in London nowadays.
In 1982 with two children we got a transfer to a bigger three-bedroom flat, a spacious, airy and light maisonette on another council estate. Today in Hackney if you want a transfer to a three or even two-bedroom council home, you are advised to move to Newcastle, Sheffield or Wales. There is no automatic transfer any more when you have two children of different sexes.
In the 1990s our estate was knocked down and rebuilt. This was a painful process in many ways, but at least it was completed in five years or so. And I got a new home on the rebuilt estate, although I had to become a housing association tenant to do so.
Nowadays estate regenerations like Woodberry Down and Colville estates in Hackney started in 1999 and are projected to continue till 2032 - that is if the plans are not revised again.
And whereas most of our estate was rebuilt as social rented housing, Woodberry Down and Colville are having whole areas of demolished council housing replaced by housing for market sale. On Woodberry Down the original 2000 council rented homes will be replaced by 5,557 homes, of which only just over 1000 will be social rented - not council, by the way, but Genesis Housing Association. Most of the rest will be expensive housing for market sale.
There are big worries about what kind of London we are creating.
Already 57 per cent of approved development sites above 15 homes are above the recommended density levels - many more homes crammed onto an area, and often in very tall buildings.
People are concerned about how housing targets are arrived at and how unequal they are. So, already crowded and still working class Tower Hamlets has a target to deliver 4000 homes a year, while leafy Richmond has a target of little more than 300.
At the Old Oak Common Opportunity Area, 24,000 homes are planned. Local residents are concerned that they will have a mini-Manhattan on their doorstep. And the vast majority of all these planned homes are market homes for sale, far beyond the pockets of most Londoners.
How have we come to this?
The Conservative government of the 1980s started the process of encouraging and incentivising Right to Buy, which cost so many council rented homes. Only one in six were ever replaced. Currently about a third of these Right to Buy homes in London are being rented out at market rents.
Councils were not allowed to use the receipts from the homes sold to build replacements. All receipts went to the Government to spend as they chose. The same government deregulated the private rental market so that there is no longer any control over levels of rent, and no security of tenure.
Housing associations were then touted as the alternative providers of social rented housing to the councils, and were given generous government funding to take on the responsibility. Councils all too readily transferred many estates to housing associations.
Now, as the government funding has been deliberately withdrawn, housing associations are increasingly seeing themselves as developers of private rented housing and expensive shared ownership homes, and less and less see themselves in the role of providing social rented homes. They, like the developers, are attempting to cash in on the inflated housing market in London.
Further changes in the law and planning regulations have given developers the upper hand in the London housing market. And they make no bones about it their interest is in keeping the supply of housing at a certain level, so as to keep the prices high. So whereas the desired level of house building in London is at least 50,000 new homes per year, it has been half that.
At the same time, the big builders and developers are making record profits. In 2015 Tony Pidgley, founder of Berkeley Homes, the developer of Woodberry Down estate, took home £21.5 million.
Then there is the issue of "affordability". This terms use has become degraded so that it is meaningless. It includes so-called affordable rent at up to 80 per cent of market rent, shared ownership, and now starter homes for sale at up to £450,000 in London. All are actually unaffordable to most Londoners.
Social rented homes, what used to be known as council homes, are the only type of home genuinely affordable to most Londoners. But even taking the absurdly broad use of the term "affordable", the most recent figures we have show "affordable" homes as only 13 per cent of total numbers of homes being built.
The annual need for additional social rented homes in London has been assessed at 15,700 in 2013/14 only 3,580 were completed, and now even that has slowed to a trickle.
Social rented homes are now the only genuinely affordable homes for most Londoners. But not only are they not being built, they are actually being lost. The proportion of London's households who live in housing that is council owned had by 2014 fallen by half over the previous 30 years to only 23 per cent. In the past ten years, 8000 net social rented homes have been lost through regeneration of housing estates, where council homes have been knocked down and replaced by market homes. And developers - and sadly councils - now have their greedy eyes on the rest of London's 3,500 council estates, homes to thousands of Londoners.
Everyone is trying to cash in on the inflated housing market. But this is unstable. Just before the crash of 2008, the then Labour government saw stretching ahead a vista of home ownership extending to broader and broader sections of the population. In the nine years since, we have seen instead home ownership become unaffordable even for professionals for whom it was the norm. The average London house price has catapulted by 86 per cent in the past ten years. Nationally, the number of households who own their own homes has fallen by 200,000 since 2010.
Professionals are being forced into the inflated rents and insecure tenancies of the unregulated private rental market. At the same time, working class families, who once had the security and quality of council homes, are being forced into this same private rented sector, where their landlords are often being subsidised by public funds through housing benefit.
The transfer of government funding from building public housing, in the form of council homes, to individual housing benefit, which took place from the 1980s on, has left all these families - and single people - vulnerable to changes in government policy.
95 per cent of government spending on housing during the course of this parliament (£21 billion in 2015) will go through the benefits system, with just five per cent invested in new homes.
Recipients of Universal Credit, which is in any case lower than the benefits it replaces, may initially have to wait three months to receive their money. Private landlords are likely to evict; many now refuse to take people on benefits anyway. But even tenants of housing associations risk eviction, because their assured tenancies - as opposed to council secure tenancies - allow for automatic eviction as soon as they fall two months into arrears.
I mentioned earlier the instability of the inflated housing market. Cracks are already appearing. Sales of luxury housing on large schemes like the Earls Court development, have slowed down. In November last year, Capco the developer's sales rate was down to one per fortnight. At this rate, it would take 200 years to sell all the 7,500 homes planned for the site. So councils trying to cash in themselves by using council owned land for large private housing developments are playing a risky game. Not only is this housing far too expensive for most Londoners, and therefore does not meet need, there is a serious risk that it will never be built, or if built, never be sold. Instead of using precious public land to build council homes, and facilities for their tenants and other local people, councils will have lost this land for no public gain at all.
There was never a golden age in housing for Londoners. There was always a lot of sub-standard private rented accommodation. Council estates suffered from neglect and lack of expenditure from the 1970s on. Most people always had to make sacrifices to save if they wanted a mortgage. But what we have seen is a steady, and now rapid, worsening of housing provision for most Londoners. Things are far worse than they once were.
And so we pose the question - housing for whom, and how do we get it?
"The Conservative government of the 1980s started the process of encouraging and incentivising Right to Buy, which cost so many council rented homes. Currently about a third of these Right to Buy homes in London are being rented out a market rates."
"Social rented homes are now the only genuinely affordable homes for most Londoners. But not only are they not being built, they are actually being lost....housing that is council owned had by 2014 fallen by half over the previous 30 years to only 23 per cent."