Why the housing industry is in ruins
Instead of squabbling over housing benefits, how about building some new homes and unbuckling the Green Belt?
Like just about every other quasi-public debate about the Lib-Con government’s Comprehensive Spending Review, the current squabble over the proposed cuts in housing benefit has made for a typically unedifying spectacle.
On one side we have the government justifying the proposed caps on housing benefit using the political class’ discourse of choice: ‘fairness’. Why should those working, argues Prime Minister David Cameron, be able to afford less in the way of housing than those who are not working? We’re all in this together, right? On the other side, an unholy trinity of Labour politicians, ex-London mayor ‘Red’ Ken Livingstone and current incumbent ‘Blue’ Boris Johnson have lined up to slam the proposal for being, well, unfair on those on low or no incomes. The Lib Con coalition has perpetrated a ‘Kosovo-style social cleansing’, to quote Johnson; a cleansing, that is, of the impoverished from its high-rent city centres.
Predictably, Johnson’s striking choice of analogy has grabbed attention from the issue at hand, with supporters of the proposal keen to be more offended than thou. Which is unfortunate, because there is an important issue here, an issue concealed at the heart of the following statistic: with a cap on housing benefits of £400 per week for a four bedroom property, the percentage of privately rented properties available to housing benefit claimants in central London will fall from more than 50 per cent to just seven per cent. But the issue here is housing not housing benefit. Why, given the demand for housing, are so few new homes being built that the existing, often decaying, housing stock has become so expensive?
But the housing debate, the debate about the type of society we literally want to live in, just won’t happen. Instead we have a narrow, point-scoring discussion, enlivened by politically incorrect mayors, about how much people should be allowed to claim in housing benefit, a tedious to-and-fro premised on accepting the state (and price) of housing as it is. This is a limited debate in every sense. Limited in ambition, and limited by the nature upon which no one can build.
There is a nasty, mean-spirited undertone to this debate, a sense that people living in London’s overpriced, under stocked housing are simply to make do. But why should we? Why are houses and flats in London so expensive? Why is an often decaying housing stock not being replenished? Why aren’t we building more?
The numbers paint a picture at odds with the housing needs of the populace. In 1967, 450,000 homes were being built each year; by 2000 it had shrunk to just 160,000. In the past year, that number has fallen to around 100,000. As James Heartfield has pointed out on spiked, there are 20million families in the UK, many with houses that need replacing at a rate of about 200,000 every year – that would be just enough building to stand still. Yet as the demand for housing increases, the supply is falling away. Little wonder that about the only thing to keep pace with rising demand over the past couple of decades has been the price of housing - present, recession-induced stagnation excepted.
Why is house-building so limited? Because, in contrast to the low political esteem in which construction is held, nature has never been so highly prized. Hence, since being established in 1955, the Green Belt, protected by the legislation of successive governments, has doubled in size. Such has been its growth that it now accounts for 1.6 million hectares in England alone – 13 per cent of the total land available. As the housing shortage tightens its grip, the swathes of countryside encircling our towns and cities symbolise the strangulation of the construction industry.
Ranged against those who would quite like somewhere to live, then, is an anti-growth, anti-construction lobby that has grown in strength over the past couple of decades. It comprises groups such as the Campaign to Protect Rural England and the Green Party, and has been given governmental approval in Lord Rogers’ Urban Task Force, which decreed that new housing should be confined to the few vacant lots that become available in the city. So, the housing needs of people have come a poor second to the sentimental needs of an elite basking in the righteousness of an environmentalist agenda. Preserving the countryside from people has become more important than meeting people’s needs. Ever more complicated sets of planning rules and regulation, designed to put off prospective house-builders, have merely compounded matters.
Yet while the mortgage bubble inflated, the few construction companies that could afford to indulge the planning authorities’ sustainable whims were more than happy to build fewer homes and flog them at extortionate prices. It was just that when the asset bubble popped over two years ago, the UK’s construction industry imploded with it.
And now we have this: an acceptance that we, as a society, ought to make do with a dilapidated housing stock that many people, even with state assistance, can no longer afford. That some of those attacking the caps in housing benefits are incapable of seeing beyond the so-called fairness of the measure is unsurprising. That’s because people like ex-London mayor Livingstone who, alongside Johnson, has been quick to condemn the Lib-Con initiative, have spent the past 10 or so years signing up to, and approving, the very Green agenda, replete in sustainability and brownfield rhetoric, that ought now to stand accused of leaving UK housing in expensive ruins.
Tim Black is senior writer at spiked.