Yes; the problem of housing benefit scenarios that “look wrong” stems from the Tory decision that social housing didn’t have enough of a market in it, and that we should move from subsidising bricks and mortar directly, to paying for people to meet their needs in the marketplace.

I’d like to think we will reverse that policy trend, though it has to be said that New Labour was seduced by the same logic in, for example, social care services – leading to the inevitable headlines based on a small number of stories; “disabled man uses direct payments to visit prostitute”, and that sort of thing. Same problem.

If we’re going to continue with rapid population growth, we need rapid housing growth too – tricky, since the places available to build are often not in the same place as the available jobs, especially if you factor out flood plains and (most of the) green belt.

In London and the South-East part of the answer must surely be to increase the incentives for people to live more densely / the disincentives to underoccupation. If you rent a spare room at the moment you can charge up to £354 without paying tax. I don’t think it would break the Treasury to make rental income in your own home entirely tax-free for basic rate taxpayers.

Next, tackle empty homes in a serious way. There are plenty of good ideas around for how to do this, as long as the political will is there to tackle those who have bought nice houses in prime London as a capital investment and don’t want the hassle of letting them out. In rural areas and London the same applies to holiday homes and commuter crash pads – owning spare houses in an age of scarcity should be taxed in a way that reflects the social nuisance it causes.

The extent to which housing was used as a political stick by New Labour to prove that they weren’t left-wing, and the way in which that came back to bite us, is probably the best evidence that Mandelson’s verbal drooling today is a nonsense; would we have been less electable if there had been more affordable housing? Would we have been more vulnerable on immigration if people hadn’t perceived such an acute shortage? Would the recession have been worse if house prices hadn’t soared to such unsustainable heights? Quite.

That said, we should look properly at these housing benefit proposals. Some of them are terrible and some of them are fair enough, and we shouldn’t get stuck on the complicated side of the argument. Mixed neighbourhoods are better in general principle, but if a property is unaffordable to someone on £60k a year, then it’s unaffordable to the state as well, and we have to deal with that.

The percentile at which housing benefit pays out is probably something which should be determined locally depending on the housing mix and the number of people who are in fact dependent on housing benefit. In a very deprived community where over half of households/families need housing benefit, paying for the cheapest 30% of properties is clearly not going to meet need. On the other hand in a wealthy area with 1 in 10 claiming housing benefit, saying claimants should be able to have their pick from the cheapest half of the market is oddly generous.

Moving people out of their existing homes, or cutting people’s benefits just because they haven’t been able to find work, though, is cruel and counterproductive. The former could be resolved by introducing some security of tenure and making the profiteering landlords take the pain. The latter is simply hypocritical from a Government which is doing its best to send unemployment back up. Cutting the small slice which claimants can keep if they find a cheaper property is daft – removing the incentive to negotiate and taking cash away from some very poor people – but is something we were already doing in office.

“A more equal society would see our generation have the same opportunity as that of the one above us.”

I agree. I also think it is almost impossible to pursue such a policy.

‘Our generation’ (I’m 25) does not represent a large enough constituency to warrant any of the mainstream parties challenging the status quo.

The baby boomer generation received the benefit of the vast increase in housing stock post-war; they received the benefit of the ‘right to buy’ policy of Thatcher some 30 years ago; and continue to receive the benefit of chronic under supply of affordable housing in the form of vastly inflated house prices.

My friend’s parents bought their (ex-council) house for £4,000 and it is now worth close to £200,000. My friend has just mortgaged himself to death to buy a shabby property half the size for a six figure sum.

Successive governments of (nominally) left and right have positively encouraged this lunacy.

A government courageous enough to do something about it will be instantly voted out of office by those who stand to lose most.

I think we should not get too hung up on the housing benefit side of things but look at quite simply building more houses. The last line of the article was right, there are votes in it; two of the questions to Cameron, Brown & Clegg in the debates were about housing and they came from middle-class or aspirant middle-class people who were unable to buy their own homes. The expansion of private renting has meant that house prices hjave rocketed and ordinary families with dual incomes cannot afford to buy, even in areas such as Birmingham. None of the party leaders addressed this point.

Whichever Miliband wins they need to start looking at abandoning this private-sector renting policy which the Tories are so keen on. No-one likes private rented accom. People I know who are renting all say they are “stuck” in private rented accom. Labour could win, and win big by not only building more houses but bringing in measures to reduce private rented accom.

First of all there needs to be a distinction made between people who rent out one their house of flat because they are working away or abroad for a while and professional landlords who own multiple properties. Then restrictions can be put on the latter which would mean they would be returned to the owner-occupier market such as restricting the %age of rented flats in blocks where there are more that 25% of the properties owner-occupied. These properties, whether houses or flats, could be required to be registered and maintained with the maximum heat and sound insulation and most energy effecient boilers. landlords could be required to maintain the external appearance of their properties and measures brought in to force landlords to sell to tennants regardless of how long they have been living there. The huge profits landlords have been getting, both in terms of rent and capital gains could be taxed more highly and the proceeds used to build more social housing.

What is needed is a bit of creative thinking from Mr Miliband or Mr Miliband. There are masses of votes in housing policy, votes which have no home at the moment. They could really make a difference by using their imagination and not just expanding social housing but also helping people get on the housing ladder and reducing the numbers of people stuck in private renting,

The housing problem is a housing deficit problem. To solve the problem in the medium term we need to rebalance property taxes away from built property and to reduce housing demand.

The solution is of course, land value tax coupled with restrictive immigration and pro-family policies.

Article: “So what for the future? Realistically, the death of housing policy, and the lack of pay-off long term investment gets in a short-term election cycle means that we have reached an equilibrium that doesn’t look like breaking.”

Working in housing, I don’t see any equilibrium at the moment. I see rapid unsustainable change. What has happened is that the consensus of the 1940s to today (that government should try to provide adequate housing for all) has very suddenly broken down. Come April, we are looking at the beginning of a different era in housing, where widespread overcrowding and insanitary conditions are considered an issue not of society failing people, but of people failing society.

For years, government has been maintaining the fiction that it is truly aiming to provide adequate housing for all. That hasn’t been the case for quite some time, with endless lofty targets and obligations, not backed up by practical commitment. Something had to give, eventually. The Tories (and to be fair Labour before them) have been able to manufacture cover for a fundamental collapse in the commitment to adequate housing, essentially by attacking a strawman Vicky Pollard.

The affordable housing machinery has been left in something of a state of shock. Housing Associations are still planning schemes of spacious flats and houses for families, built to the highest environmental standards. But the level of funding won’t support that any more: they will end up catering to a lucky handful while the majority of those in need cram into illegally subdivided slum housing, families in one room. That is already what is going on, in some places. The best use for the remaining affordable housing funding after the cuts will be emergency measures – providing bare minimum functional roof-over-head stuff.

One other thing I should add is that escalating housing problems for the poor is a symptom of wider inequality. There isn’t, technically, a shortage of bedrooms in the UK. It’s just that the increasing level of inequality means that when the top 10% or so choose to move to a place with larger rooms, spare bedrooms, more garden (or worse, to get a second home in the country) – in doing so they are unwittingly outbidding a huge chunk of society’s urgent demand for basic living space, and keeping it long after they even want it, after the family leaves home.

@1 Oldpolitics: Yes; the problem of housing benefit scenarios that “look wrong” stems from the Tory decision that social housing didn’t have enough of a market in it, and that we should move from subsidising bricks and mortar directly, to paying for people to meet their needs in the marketplace.

A big part of the problem with housing policy is that there isn’t a proper market for housing, because people who own land can’t just stick a load of houses on it and sell them; if they could, then the cost to buy a house would rapidly shrink to something similar to the cost to build a house — which is around £50k for traditional building or £20k if houses were mass-produced in factories and then assembled on site (as they should be).

My point is: don’t blame the market for housing being expensive; if we had more of a market system, houses would be cheaper.

‘I think we should not get too hung up on the housing benefit side of things but look at quite simply building more houses.’

Even the 10% cut on HB after a year’s unemployment? Seriously?

@3 J: “A more equal society would see our generation have the same opportunity as that of the one above us.” — I agree. I also think it is almost impossible to pursue such a policy. ‘Our generation’ (I’m 25) does not represent a large enough constituency to warrant any of the mainstream parties challenging the status quo.

I read somewhere recently that the average first time buyer is now 37. If we consider the age group 18-35, they are probably around 25% of the electorate, and because they are less likely to vote, 20% of the voters. So you’re right, it probably doesn’t make sense for the establishment parties to seek votes from these people at the expense of losing votes from the other 80% of voters.

But what’s true of establishment parties — Con, Lib Dem and Labour, and in Scotland the SNP — isn’t true of new parties. I’m currently standing as the Pirate Party candidate in a council by-election in south Edinburgh, and my platform includes a commitment to build 9,000 affordable homes a year. Incidentally, this won’t cost the council anything, in fact they’ll make a profit of £160 million a year, which should insulate the council from any spending cuts it would otherwise have to made.

While I probably won’t win (it’s a single seat STV election), I do think that the Pirate Party has every chance of success in the future, especially since Scotland has a sane electoral system (AMS with in practise a c.5% threshold in the Scottish parliament; 3 or 4 member STV wards in local government).

@9: Scotland has a sane electoral system (AMS with in practise a c.5% threshold in the Scottish parliament; 3 or 4 member STV wards in local government).

Veering off topic for a moment, I have recently come to conclude that if the AV referendum doesn’t pass, Scotland should become independent, rather than continue to shackle itself to a corpse.

@6 Jungle: The Tories (and to be fair Labour before them) have been able to manufacture cover for a fundamental collapse in the commitment to adequate housing

To be fair to the Tories, they’ve only been in power for 3 months, and the situation we have now is not of their making. Instead, it is the making of the Labour Party, who’ve utterly neglected this issue in the 13 years they’ve been in power, because whatever their rhetoric, they don’t actually give a shit about the working class or the poor. (Oh, they say they do, but judge politicians on their actions, not their words; I suspect one reason Labour politicians want high house prices is the free 2nd homes they’ve been given by the taxpayer).

So, if you want Britain to be a country that delivers prosperity for all, don’t place your hopes on the Labour Party. (This remark was directed at Sunny Hundal).

Not that I expect the Tories or their Lib Dem sidekicks to be any better.

essentially by attacking a strawman Vicky Pollard.

If I was a 16 year old girl with no qualifications, it’s quite possible I would make the rational decision to have a baby to get a council house, because I would anticipate that I would never be able to afford to buy a house. And if politicians criticise anyone making such a rational decision, when it is the politicians themselves who have made the decision rational, then they are hypocritical scumbags.

The affordable housing machinery has been left in something of a state of shock. Housing Associations are still planning schemes of spacious flats and houses for families, built to the highest environmental standards. But the level of funding won’t support that any more

If houses were built by modern rational methods, e.g. mass produced out of shipping containers, they would cost about £20,000 each, and housing associations would be able to afford to build plenty. But the Liblabservatives won’t allow that, because they all think only the rich should be allowed to buy a house.

In its simplest terms, what was in 1980 a huge stock of valuable assets in the form of quality social housing has been over the course of thirty years successfully liquidised, at great discount, for political gain.

There are still people living in those former council houses, you know. They aren’t lying empty. In many (most?) cases, the people living in them are the people who used to rent them from the council, or their children. If the discount was as great as you say, then the policy produced a massive transfer of wealth into the hands of not very well-off people. Isn’t that a good thing?

Hi all,

Pleased to read all your comments and debate. You’ve brought up a number of different points, but here are a few responses:

6. Jungle – ‘Equilibrium’ is refering to the political inertia of housing policy. You are right there has been devasting change in the make-up of the housing sector.

11. Phil Hunt – You’re right that labour did little to stem or solve housing problems. However, the cause of these problems can be traced back to the beginning of the 1980s.

12. Flowerpower – Yes it was a good thing. The argument here is that the current generation should receive the same opportunity.

Regards,

Michael

@9 – interesting. I’ve been following the success of the Pirate Party on the continent (where there are, in general, more favourable electoral conditions) and sincerely hope it is repeated here.

I’d vote for you, but I live in Liverpool. Sorry.

If we had a fairer electoral system, I’d like to see a youth party of some description develop – it could easily attract the votes of university students (for starters), who tend to be amongst the most politicised constituencies in the country.

Unfortunately, students are (obviously) very thinly spread around the country, so there’s not much chance to effect change – and no, I don’t count the Lib Dems as a viable option.

We should consign our current electoral system to the rubbish tip of history, but of course the establishment has a vested interest in keeping things exactly as they are…

Start a massive house building program which will provide work for the armies of unemployed. Continue the right to buy scheme but introduce a right to buy back scheme, councils can then buy back social housing preventing it from falling into the hands of the buy-to-let fat cats.

@14 J: I’ve been following the success of the Pirate Party on the continent and sincerely hope it is repeated here.

You can make that more likely by joining us.

If we had a fairer electoral system, I’d like to see a youth party of some description develop

We may get AV for Westminster. While far from ideal, this would be a big improvement, especially since it may lead to a better system in future.

Unfortunately, students are (obviously) very thinly spread around the country

This is not true for local elections. For example, the council ward I live in has lots of students in it.

and no, I don’t count the Lib Dems as a viable option

I was talking to a Lib Dem the other day, and he says a lot of them are considering leaving, but don’t see much in the way of viable alternatives.

Ending favourable tax treatment of housing (a £17 billion subsidy to the middle-classes that *surprisingly* no-one talks about cutting) would have a big impact on improving the housing situation of people.

At the moment, people demand houses that are far too big for them as investments and refuse to move out of family-sized homes when they are old and struggling to cope. The tax subsidies incentivise this behaviour.

Tax housing investment at the same rate as other capital gains, tax imputed rents of owner occupiers at the rate of other investment income and watch the housing crisis get better as the market adjusts to the subsidy junkies losing their drug (large homes will be inverted to smaller units, luxury homes will downsize to what the common man can afford and older people will move to free up larger homes when their kids leave home).

At the same time end the ridiculous planning laws that prevent London from bring built upwards. They are crazy and regressive, forcing the poor to pay stupidly high house prices or else be forced to live in a depressing commuter town 30 miles from London spending half their life on the train

We should not have got into this situation. Try this news from 2002 about the house-price bubble in Britain:

“CHARLES GOODHART, a former member of the Bank of England’s monetary policy committee [and economics prof at the LSE], warned yesterday that the Bank is failing to take sufficient account of the house price boom in setting interest rates.

“His warning comes amid growing fears among economists that house prices, fuelled by the lowest interest rates for 38 years, are getting out of control. Yesterday, new figures showed that homeowners are borrowing record amounts against the rising value of their homes. . . ”
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2002/04/06/cngood06.xml

In 2003, the IMF warned of a house price bubble in Britain:
http://news.bbc.co.uk/1/hi/business/2814809.stm

Try this graph of average house price to earnings ratio from 1953 though 2006:
http://www.housepricecrash.co.uk/graphs-average-house-price-to-earnings-ratio.php

And what exactly did the New Labour government attempt to do about it?

Clue: Yvette Cooper, an economist educated at Oxford, Harvard and the LSE, was the minister responsible for housing from 2005 to 2008.

Market forces will correct the bubble in due course. In today’s news:

“House prices have nowhere to go but down. With first-time buyers unable to get on the ladder, the property market is shuddering to a halt”
http://www.guardian.co.uk/business/2010/aug/30/house-prices-first-time-buyers

The Right To Buy transferred huge amounts of capital wealth to SOME lower income families at a discount and amounted to a redistribution of £10,000 per family per sale.

Our ancestors were allowed to fight chickens and beat their wives (or be beaten by their husbands), too, but that doesn’t mean it was right.

If the Coalition was committed to localism then it would allow councils to replace Council Tax with LVT so as to encourage efficient land use and encourage the owners of the 750,000 properties currently standing empty to put them back into circulation (using grants if necessary).

They could also enable housing associations and councils to issue 25 year bonds to raise the money to either buy (all those currently empty office buildings and new build flats, so as to put people in them and force down rents in the private sector) or build new housing from scratch. As a trade off the current residency criteria could be loosened to allow for the periodic re-assessment of entitlement.