I went to a lecture this week at the University of Greenwich
I never knew that after World War II there was a policy to
reduce the size of London , which was part of the
rationale for the New Towns outside but near London .
Apparently this policy failed because there was a negative economic
effect, and by the 70s the policy was reversed.
The problem in London
is the lack of affordable housing. We
all know this. The conundrum is what to
do about it.
Just leaving it to the private sector does not work because
they are always looking for maximum profit, and there will always be a large
disparity in the incomes of different people, meaning that the low-income people
get priced out. One obvious solution to
this is to have more supply than demand, but the private sector are not daft enough
to do that.
So what about regulation of the private sector, at least in
the rental market – what about going back to rent control? The danger is that the properties will not be
maintained by the landlords, and at some point landlords will step away from
the market creating a huge rental shortage. What could be helpful is regulation to limit rent increases over, say, a 3 year period, allowing for some certainty for the tenant without locking them in.
Do we need public sector controlled housing then, back to
council houses? Was it a huge mistake to
allow them to be bought at all, let alone at far below the market price? It seems there is no appetite in government to
go back to this model, although I don’t see anything wrong with it – why not a
PFI on a block of flats so that the government is in control, the developer
gets paid over time, and the tenants are protected? The favoured model for this seems to be
Housing Associations, and that’s fine – my mother and brother live in such a
flat and it works well for them. Can we
get more joint developments between housing associations, government and the
developer companies?
I asked the devil’s advocate question “why not seek to make London smaller again, or at least stay the same size, and
focus on housing expansion elsewhere in the UK ?”. The answer came that it would, as post-war, be
an economic mistake to limit London ’s growth …
however there’s nothing wrong with initiatives elsewhere in the UK as well.
Mr Raynsford’s summary was that we need sensible, not
extreme, action on many fronts. I agree,
because as with all significant challenges where there is no single magic
bullet, we need the cumulative effect of many coherent and aligned actions to
achieve a sustained response. I pointed
out that the challenge for our society is that housing policy needs to be
strategic over a long timescale, and yet politicians who are masters of the
policy operate on a comparatively short-term basis. Mr Raynsford smiled and agreed.
CODA
It occurs to me that everyone still uses the phrase “getting
on the property ladder” and I have been saying for a few years now that it’s
not a ladder, it’s a roller-coaster, and if property prices are falling (or you
need flexibility on your location) then renting is far better. We still seem to have in our DNA this need to
own our property, and it really doesn’t always make sense. Worse still, the whole expectation that it is
a ladder, allowing you to climb up the wealth tree because the next owners will
pay far more than an inflationary increase, is surely part of the reason that
we now have this problem – young people with normal jobs cannot afford to buy a
property. I benefited from the boom in
the 80s, got started with just our own money, got up the ladder to a big house
with mortgage paid off – without that I would be poorer now … but I am going to
be poorer anyway because I need to fund the deposits for my two daughters so
they can buy their first property. It’s
a mad circle.
