Peckham was my first port of call when I moved into London. So it was nice to return there to talk to Southwark Green Party about housing last night.
In 2007 I moved into in a slightly grotty flatshare let out by a negligent landlord, and was eventually evicted after complaining about – among other things – him sending an uncertified mate round to fix our boiler.
At least forty years of failed policies have led us to the point where my experience is commonplace, and not just a personal problem but a political one.
Britain’s housing crisis is usually illustrated with lots of numbers, so I reeled some off at the meeting. In a blog I can put them into two charts, showing two important trends in Southwark unfolding through each General Election:
With each election, house prices rose, and they now stand at an incredible 21 times the local income, pricing all but the richest and wealthiest out of ownership.
With each election, the stock of social housing has fallen as Right to Buy sales and demolitions have outstripped the number of new homes built, leaving people low incomes reliant on expensive and insecure private rents.
With each election, whichever party won, things got worse.
In recent years Labour and the Conservatives have both tried to claim each other is solely to blame. Labour have a particularly ridiculous web site slamming the ‘Tory Housing Crisis‘. But you can see that the crisis has deepened under both Labour and Conservative/Lib Dem governments. The same is true of Southwark, which has seen both red and blue/yellow coalition councils.
Here’s one more number I find quite staggering, which comes back to my personal experience of renting in Southwark:
By “affordable”, I’m using the standard definition that your rent shouldn’t take up more than 35% of your take home pay. Shelter crunched the numbers in their Rent Watch report in 2012.
Speculating in Southwark
One of the problems I touched on in my talk was speculation on property, or as some like to call it, “investment”.
Other political parties tend to say the only solution to our housing crisis is to build more homes. But across London, two thirds of the new homes are sold to investors. They might be a buy-to-letter in Kent, or a cash buyer in Kuala Lumpur, it doesn’t much matter. They cause two big problems:
- These speculators are wealthy and willing to bid up prices, because they think prices will keep rising (which is why they bought the home).
- If they don’t leave the home empty, they will let it to a private tenant on an insecure, short-term contract with an extremely high rent.
In Southwark, most new homes are marketed like this (yes, it’s from a real advert):
They aren’t selling a home, they’re selling an asset with a guaranteed return on investment and the likelihood of a huge capital gain.
It gets worse, as homes are designed to appeal to the investor market, rather than the needs of local people. This means towers of one and two bed flats, and nothing to put potential investors off:
At One The Elephant, a blandly named tower block subsidised by City Hall, the council papers were even honest enough to spell this out. The developers wouldn’t get as much money for the flats if the speculators knew they might have to mix with tenants in social housing, and putting in a separate lift and door would be too expensive, so the Labour councillors voted the application through with no social housing in it at all. They just got a contribution to some “affordable” homes elsewhere in the borough.
Southwark Council has schmoozed and supported the big developers behind these awful schemes for years, and encouraged investor-buyers. The council leader, Peter John, has been wined and dined and flown to a property fair in Cannes by one of them – Lend Lease.
Why? Because investors buy flats off-plan, helping big developers to build more homes – and as we know, building more homes is the solution to our housing crisis, right?
What do we do?
My main message was this: if we say “just build more homes” in this broken housing market, we give big developers an excuse to keep making things worse. We shouldn’t be building new homes at the expense of council tenants, nor getting into bed with speculators to get new homes built.
I talked about some other problems with the “just build more homes” mantra, but I won’t take your time spelling them all out here.
Instead, I’ll cut straight to five solutions that the Green Party is proposing to solve Southwark’s housing crisis as we go into this General Election:
- Tax land and property to put off the speculators and stabilise house prices – initially by adding higher council tax bands, and in the long-term by replacing it with a Land Value Tax.
- Stop demolishing council estates and support tenant-led refurbishment schemes, which could include new homes being built under the direction of existing tenants.
- Build a lot of new social housing with a bigger grant and more borrowing powers for councils, so the stock starts to rise again.
- Give private tenants much longer, more secure tenancies with rent controls to at least stabilise prices and stop the cycle of short-term moves and evictions.
- Break up the big builder cartel and its cosy relationship with Southwark Council by, for example, only selling public land to custom build projects instead of the likes of Lend Lease.
We will be unveiling further details of these policies, and many more, in our manifesto nearer the 7th May. Our aim is to make housing policy about homes for people, rather than assets for investors.
In the meantime, you can join the Green Party and dozens of campaign groups in calling for radical change at the March for Homes on Saturday 31st January.