A new council house building programme

In the past there were those on the left who argued that there was little necessity for a substantial increase in public sector housing. By now they have probably by now changed their views on this issue.

The banking crisis, austerity measures, and general economic uncertainty have clearly reversed the trend which led to such huge increases in owner-occupation. The current difficulties of securing and servicing a mortgage, unless the income is well above the national average, are of course well known.

By all accounts, this trend towards renting, as opposed to owner-occupation, is to continue for some years; the study by Cambridge University, widely publicised in the media, concludes it is likely that just 27 per cent will be in what is described as mortgaged home ownership by 2025, compared to 43 per cent in 1993-4, and 35 per cent at the moment.

One thing is clear: increasingly not only individuals living on their own, but couples, as well as those with children, have no alternative to renting. In London, families renting privately are likely to increase from the present 25 per cent to 33 per cent within 13 years. A report from the Joseph Rowntree Foundation also states that by 2020, the number of home owners under the age of 30 will fall from 2.4 million to 1.3 million, a reduction no less of 46 per cent.

One hoped that the days when so many were subject to private landlords and companies, with all the insecurity, high rents, indifference and slowness to carry out essential repairs were on the way out.

The Labour government put more emphasis on the regeneration of social housing, rather than new build; clearly it was felt that such new rented accommodation was not a priority. In all fairness, the situation during most of that government’s time was very different before the economic crisis, which had such worldwide implications.

The next Labour government should have a policy of a substantial council house building programme, bearing in mind all the difficulties of becoming an owner-occupier now.

However, if such a programme was undertaken, what of the right to buy, as far as local authorities are concerned? As the matter now stands, a council tenant is able to purchase after just five years; moreover, this period does not have to be spent as a tenant of the property they are intending to buy, and can be accrued with different public sector landlords. For a house the discount after five years is a huge 35 per cent, with an additional 1 per cent discount for each extra year you’ve been a public sector tenant, up to a maximum of 60 per cent. For a flat this discount is 50 per, which an additional 2 per cent for each extra year, up to a maximum of 70%. Although there is a cap of £75, 000 maximum discount across the board.. It’s also worthbearing in mind the overall market price will be less than non-council properties in the vicinity.

What purpose would be served if a new council house programme was pursued, and after such a relatively short period of time, the place could be purchased by the sitting tenant? Neither should we forget for a moment, the very long waiting list in so many parts of the country for such housing.

When the Tory legislation in the early eighties was going through, Labour warned it would be the best properties that would be bought, and not the multi-storey flats, particularly in certain unpopular localities. Hardly anyone was surprised by the outcome, and with the resulting ghettoisation.

Housing association tenants do not have the same right to buy, but then again, such organisations, however useful in providing social housing at a time of such need, tend to lack genuine democratic accountability.

There is no reason why other house building could not be included in the policy which I am advocating, which would allow the tenant, as various schemes do now, to first rent and then turn the tenancy into a mortgage at some stage, if that is the wish of the occupier. But this should be separate from the main task of providing secure accommodation with reasonable rents for families who otherwise would have no alternative but renting from the private sector, since housing associations also have, as we know, a lengthy waiting list on their books.

And while we are about it, there is also a case that effective measures should be taken, which will certainly not come from the present government, to ensure some control, again, over the level of private rents and to provide at least more security than at present.

No one would argue that, given the means to do so, most would wish to own their own home. Until recently, all the indications were that the growth of owner-occupation would continue apace. However, in a very different situation to which we are now in, where all the indications pointed to it being likely to last for some considerable time, there is a need to rethink our housing strategy, and to do so quickly.