Forest of Dean & Wye Valley

“HOME SWEET HOME”?

In R.Richardson on December 14, 2011 at 4:27 pm

In a capitalist society, “markets” decide what kind of homes (if any) are available to us. Surely there must be a fairer way? RUTH RICHARDSON looks at the options.

We usually associate vast areas of tents with short-term solutions to natural disasters. But in the USA, where more than five million homes have been repossessed in the last five years, tent cities have sprung up around conurbations which house millions of homeless people.

An article in a recent issue of Red Pepper magazine by Stuart Hodkinson argues that in Britain “all the elements of a perfect storm are gathering in the wider housing system”. In the five years to 2009 repossessions in the UK had increased eight-fold, to 48,000. For many people, repossession of their home means a worsening credit rating, so that getting back on to the housing ladder is difficult. The Government’s homeowner support scheme (giving support for up to two years to those facing a loss of income) was closed down in April.

SLUMP IN NEW HOMES: Since 2006 house building completions have slumped to their lowest level in 90 years. Although house prices have fallen by 25 per cent in the last three years, for most first-time buyers on an average income, owning their own home remains an impossible

dream. The days of 100 per cent mortgages are well and truly over. The average house price (currently £226,648) would need a £60,000 deposit and a salary of £56,000 plus.

What about renting? The local authority waiting lists have doubled since 1997 to around five million. And increased demand for private rented accomodation has caused rents to rise considerably.

Stuart Hodkinson’s article gives a historical perspective to the current situation. Engels, 140 years ago, wrote that sub-standard housing for many with, periodically, a wider crisis is endemic to capitalism. Council house provision gained ground from the beginning of the last century. A mixed economy of public and private home-building (with priority given to council housing in the years immediately after the war) helped to mitigate the boom-bust cycles since the early 1970s . But the reluctant withdrawal of local authorities from house building has increased the instability of the housing market.

BURSTING THE BUBBLE: Thatcher’s policy of “popular capitalism” encouraged us all to aspire to home ownership. The combination of extravagant lending, speculation and most significantly the financial commodification of housing drove the market higher and higher. All this was sustainable only so long as house prises continued to rise. But finally the bubble has burst.

New Labour followed the privatisation agenda. At present, under Ed Miliband, the Labour Party is conducting a “housing policy review”, but this will most likely continue to promote home ownership and a market-dominated approach to the provision of affordable housing.

There is an urgent need for resistance to the coalition’s current housing policy. A number of pressure groups such as “Defend Council Housing” and “London Coalition Against Poverty” have been set up, but mobilising mass resistance is very difficult. An additional source of affordable housing might be co-operative housing schemes, particularly the establishment of community land trusts (CLTs). The CLT would own the freehold, and thus stop speculative and inflationary forces driving up property prices and rents. It’s doubtful though whether CLTs can make more than a marginal difference to the current situation.

RADICAL RE-THINK: Stuart Hodkinson calls for a radical re-think in our housing policy, including a moratorium on all repossessions, compulsory purchases and benefit cuts, stronger rent controls and the refurbishment of existing council house stock. Homeowners could be encouraged to sell their homes to a new housing co-op, swapping their mortgages for rents that build up an equity stake within the housing co-op.

Two core attributes might assure the success of such a movement, he suggests. Firstly, the movement would bring together public and private tenants, homeowners and the homeless, around a shared agenda – the provision of decent quality affordable housing for all. And people would gain a degree of security against eviction and repossession.

Significantly, Hodkinson sees these proposals as a step towards ending capitalism completely in our country. Some may think that a claim too far. It also seems to side-step the urgent (and perhaps immediate) need for a new generation of local authority homes providing security of tenure for tenants.

But events in the worlds of housing, finance and employment over recent years indicate the need for effective controls over the capitalist forces that dominate our lives.

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