Already, on average, in England, rent takes 43% of the income of households renting privately. (That’s 43% of average gross income of the main householder and partner including housing benefit, it’s 52% of income excluding HB).
Tenants in London pay 60% of income (including HB: 72% without). And on current trends, in nine years’ time there will be more households renting privately than households in their own home with a mortgage. (Figures from PriceWaterhouse Cooper). Private tenants have no security, and small and difficult redress if their landlord neglects repairs or offers only poor conditions.
Andrew Panayi, a North London landlord, was in October 2015 eventually fined £2,000 and ordered to pay £15,900 costs and repay £70,000 rent after being chased by the local council and exposed by the BBC and the Guardian. One of his less dissatisfied tenants reported: “The electricity gets cut off, and we sometimes don’t have hot water... It is really small, there’s mould on the walls and it smells”.
But Panayi is reckoned to have over 200 properties he is renting out, and the fines and repayments will have been a small dent in his income. The Tories’ Housing and Planning Bill, now in the House of Lords after completing all its stages in the Commons, and due to come into force from April 2017, will push forward the polarisation of housing in England, especially in London, into secure luxury for a few and insecure squalor for many. The bill will:
• Cut off government funding for social housing. Government money will go instead into building homes for sale.
• Impose higher, often much higher, “market rents” on all council tenant households earning more than £30,000 a year, or £40,000 in London.
• Limit tenancies for new council tenants to two to five years.
• Force councils to sell off their “higher-value” properties, which in some central London boroughs could be almost half their stock.
The “market rent” rule is an attempt to wreck social housing, not a corrective to a subsidy for the well-off. Council housing is not subsidised. Councils are legally obliged to balance their housing budgets separately from other budgets. It is cheaper only because councils do not make a profit from housing.
Median gross weekly earnings in the UK for full-time workers (the earnings level for people halfway up the pay chart, with 50% worse off and 50% better off) are now about £27,500 a year. Average (mean) household income in London is over £52,000. Many low-paid households with two earners will be hit by the “market rent” rule.
All this started in the Thatcher years, when the Tories abolished most of the protections for private tenants introduced in the 1960s, forced councils to sell off properties cheap to all tenants who wanted to buy, and made it financially impossible for councils to build any real quantity of new housing. The first result of Thatcher’s changes was not an immediate rise in private renting, but an expansion in people buying homes on mortgages. Many of those then suffering in the house-price crash of 1989-92, in which a total of 188,000 homes were repossessed.
By the early 1990s, the proportion of households owing homes on mortgages was sliding down from its peak of 42%. It is now below 30% and still decreasing. The average deposit demanded from a first-time buyer had risen to £55,000 by 2009 — five or six times what it was in 1988 — and has declined only slightly since then. As of April 2015, only 17% of dwellings in England were affordable at median household income, and only 0.1% in London.
The Tories are promoting a more unrestrained market in housing. As such markets generally do, it is producing polarisation.
At one end of the scale: a relentless run-down of council housing, a bit-by-bit shift by housing associations into being more like private landlords, and an explosion since about 2002 in private renting (now over 20% of households). At the other end: a steady rise in the proportion of houses and flats owned outright by better-off middle-aged and elderly people who have paid off their mortgages; and an explosion in luxury housing, especially in London.
The writer Danny Dorling has argued that in general there is no housing shortage (though more social housing needs to be built in some areas). There is “overconsumption” of housing by the rich.
Nearly 2,000 properties are lying empty in posh Kensington and Chelsea; about a third of the houses on “Billionaires’ Row”, The Bishops Avenue in Hampstead, were empty in 2014. Overall, about 600,000 dwellings are empty, a figure which has gone down a bit in recent years but is still high. And the suction on the housing market of the luxury demand pulls up the prices of more modest dwellings. It inflates urban land prices.
In Southwark, the mostly low-income borough where Solidarity has its office, a hectare of building land is valued at £41 million, which at a high building density of 150 dwellings per hectare is £270,000 per dwelling. There is not much buying or selling of the land, and ground-rents are usually fixed for long periods, so the landlords’ actual take is more limited than those figures would suggest; but comprehensive public ownership of the land, a policy proposed by bourgeois radicals even early in the 19th century, would ease the housing crisis.
The housing demonstration in London on 13 March calls for opposition to the Housing and Planning Bill; secure homes for all; and rent controls. It also wants a halt to the demolition of sound council estates (often done in order to clear land for profitable high-income development); a big council housing programme; and regulations to give security to private tenants.