Capitalism is unable to answer the housing crisis

Winter 2020

Today, 1 in every 6 people in England is affected by the housing crisis - a record total of 8.4m people. According to research published in September by the National Housing Federation, which represents housing associations, 3.4m people live in overcrowded homes, 2.7m are unable to afford their rent or mortgage, 2.6m are forced to live with other households for lack of any other option and 1.4m live in poor-quality homes. And then, there are 400,000 people who are homeless or at risk of becoming homeless - a figure that has nearly doubled in the past decade!

In July, parliament’s Housing, Communities and Local Government select committee admitted that “the statistics are stark”, and promptly proceeded to grossly underestimate the number of people affected by the housing crisis, claiming that only “half a million households are homeless or living in unsatisfactory housing conditions”! An understatement, comparable only to the one they made regarding the need for socially-rented homes, claiming that “England needs at least 90,000 net additional social rent homes a year”. At that rate, it would take 2 decades to satisfy the housing needs of the 1.6m households (equivalent to 3.8m people!) who are currently on the social housing waiting list!

The charity Shelter has, in fact, estimated that at least 150,000 new social homes need to be built every year. But this would be only a start. Their report, published last year, adds that social housing stock needs to double, as it is short of “1.27 million homes for those in greatest housing need… 1.17 million homes for ‘trapped renters’ - younger families who cannot afford to buy and face a lifetime in expensive and insecure private renting; 690,000 homes for older private renters ... struggling with high housing costs and insecurity beyond retirement”. But instead, the number of newly-built socially-rented homes reached a rock bottom 6,338 in 2018/19!

The lack of social housing has driven an entire section of the working class into the privately rented sector, which a growing section cannot afford. Since the financial crisis of 2007/8, low-paid, non-permanent jobs have become widespread. It was only last February, after 12 years of wage cuts, that real wages finally reached their pre-crisis levels. In the meantime, rents have gone through the roof. The average monthly rent in England has gone up by 67% since 2010, to £987 a month. This means that on average, 40% of wages are eaten up by rent! So, for the 2m workers paid at or below the current minimum wage, paying rent on top of basic necessities, even with a full-time job, is simply impossible: a 40-hour week on full minimum wage would leave just over £100 a week for all bills and food. Even a single person would struggle to survive on that.

Rough sleeping: the tip of the iceberg

Today, the visible tip of the colossal housing crisis iceberg is rough sleeping. According to the Ministry of Housing, Communities and Local Government, rough sleeping has increased by 141% since 2010, to reach, according to their grossly underestimated figures, 4,266 people in 2019. In fact, figures collected directly from local councils under the Freedom of Information Act show that “nearly 25,000 people were recorded sleeping rough at least once in England during the latest year”.

Of course, Johnson promised during the general election campaign last December, that in 5 years, he would “end rough sleeping once and for all”. But this is not even a new promise. When he was Mayor of London, he claimed he would end rough sleeping in the capital by 2012 - not for the sake of the homeless, of course, but to make sure the streets of London were “clean” for the Olympic games! But never mind, the fact is that the number of rough sleepers doubled under his mayoral watch and a policy of “zero-tolerance” against rough sleeping was introduced. So at the beginning of the year, for instance, Newham council in East London, hired a “Rough Sleepers Taskforce” to remove homeless’ tents, which had been put up around the Stratford Shopping Mall. Notices were put up on the walls showing a crossed-out tent citing the “Highways Act 1980”, which prohibits the obstruction of “public rights of way” - de facto criminalising rough sleepers for not having a roof over their heads!

However, the huge extent of rough sleeping was exposed by the Covid-19 pandemic. It was obvious from the start that any serious attempt at controlling the spread of the virus would have to include giving decent accommodation to the homeless sleeping in the streets and to impose eviction bans on private landlords. But the government’s first Covid-19 guidance, published in March 16, was totally inadequate, offering no material help to those who were providing temporary shelter for street sleepers in facilities which did not allow social distancing.

It was well into April, and when the incidence of Covid-19 was already peaking, before the government finally put in place a plan to house rough sleepers under a so-called “Everyone In” scheme. In just a few days, dormitory-style communal shelters, where the virus could spread like wild fire, were closed. Nearly 15,000 homeless people were put up in single rooms in hotels, hostels and B&Bs. But since the “Everyone In” scheme ended in July, rough sleepers are back in the streets and the government has made no plans to re-shelter them if new restrictions are put in place.

Half-hearted eviction “ban”

In mid-March, the government was also compelled to introduce a complete ban on evictions, to prevent a further rise in homelessness due to the pandemic. But of course, these measures were taken only for public health reasons and as such, were clearly meant to be temporary. The eviction ban, initially for 3 months, was extended to 6 months ending on September 20. But in practice nobody could be evicted until March 2021, because landlords were obliged to give renters 6 months notice. However, this eviction ban has not been renewed despite the fact that Covid restrictions have been reinstated.

The secretary for Housing, Communities and Local Government, Robert Jenrick, issued guidance asking “landlords to show compassion and to allow tenants who are affected by this [pandemic] to remain in their homes wherever possible”. The same landlords who, between January and March before the pandemic outbreak, had served 5,900 eviction orders, 4% more compared to the same quarter a year earlier! What’s more, the government increased Local Housing Allowance for private tenants so that they could continue to pay their rents - a direct subsidy to private landlords - well aware that they could not rely upon landlords’ “compassion”.

In fact, out of the 227,000 private tenants who have fallen into arrears during the pandemic, 170,000 had been threatened with evictions, while the ban was still in place!

The National Residential Landlords’ Association had already signalled its intent, when it threatened in September to “tackle the most serious cases”, including tenants with rent arrears which “have nothing to do with covid-19”. And indeed, there are today nearly half a million private tenants in arrears, twice as many as last year. For the time being, most tenants who fell into arrears before the end of the eviction ban are still being issued with a 6-month notice of eviction, that is a 6-month stay of execution. And during the second lock down, bailiffs were merely being told to “hold off”.

But the many workers who have so far relied on temporary accommodation arrangements have, in fact, not been protected by the eviction ban. A recent report by The Guardian, which approached 204 local councils in October, showed that since the pandemic started, “46,894 [people] came to the council saying they were already homeless”. So the “avalanche” of homelessness predicted by charities has already started. And councils, which have an obligation to shelter people at least in temporary accommodation, are already incapable of coping with the demand!

The cuts in the housing benefits

With falling wages and increasing rents, more and more workers have no option but to rely on Housing Benefit. The Department for Work And Pensions claims that the number of claimants have fallen in recent years. But if there are fewer workers claiming Housing Benefit it is simply because they are being transferred onto Universal Credit (UC) - which replaces and combines 6 different benefits including Housing Benefit. So in fact, the same DWP reported in May last year that, while there were “3.6m recipients of Housing Benefits”, there were in addition “1.1m households with a housing element in their Universal Credit assessment.” A total, therefore, of 4.7m - hardly a decrease in claimants, since after the crisis of 2007/8, their official number was just above 4m.

But what is also never acknowledged is how elements of housing benefit which catered for those who today fall through the net and end up homeless, particularly the youth, were consciously cut by successive governments, beginning in the 1980s with Margaret Thatcher’s removal of the “board and lodgings allowance” which young people under-26 could claim. More recently, in 2011, Tory Chancellor George Osborne’s cuts reduced housing benefits by a third. Then came the notorious “Bedroom Tax” introduced in April 2013, as part of the 2012 Welfare Act: families in social housing who were deemed to be “under-occupying” their homes were meant to lose part of their Housing Benefit. Despite the outcry and some resultant tweaking of this Act, by May 2019, 13% (or 320,000 claimants) were still having their benefits reduced due to the “Bedroom Tax”!

This year in April, in light of the pandemic, Local Housing Allowance (LHA), currently claimed by 1.4m private tenants, was finally increased after a 5-year freeze. But only by a pitiful 1.7%, which meant that 900,000 claimants had just £10 more per month to pay rent! The charity Shelter, responding to the government’s announcement to end the LHA freeze, stated that rates were so low, that in 97% of the country, 2/3 of privately rented homes were unaffordable to LHA claimants. And Shelter added that “one of the reasons the rates are now so out of touch with local rents is that since the government first started restricting LHA rates [in 2012], rents have increased by 15%.”

It was only after the covid outbreak, that finally Chancellor Rishi Sunak announced, in his “workers’ support package”, he would raise the LHA rates further, to match the bottom third of local rents. Of course, the “workers’ support package” was a set of measures to bail out businesses and landlords. After all, an increase in the LHA ensured that private landlords would get their exorbitant rents paid. In fact, a large part of private landlords’ income comes precisely from LHA claims: in 2018/19 they pocketed over £5bn from these alone!

As for the transition to Universal Credit, Housing Benefit claimants have been told that, when they first switch to the new system, their Housing Benefits will be paid for another 2 weeks. The problem, of course, is that UC payments are monthly. So claimants are left with no choice but to ask for an advance in order to pay their rent while they wait for their first UC payment - which de facto forces Housing Benefit claimants into debt.

As the housing charity Shelter has already shown, there is a direct link between the cuts in Housing Benefit starting in 2010 and the growth in the number of homeless people, which has literally skyrocketed.

Selling the council housing stock

So how has it come to this, in one of the richest countries in the world?

It is worth pointing out that the lack of adequate housing for the working class is as old as capitalism itself. The first social housing, if it can be called that, was the infamous Workhouse, whose origins date back to the time of the Black Death - the plague epidemic of the 14th century - and which lasted into the early 20th century. The sick and elderly, as well as able-bodied homeless paupers, had no choice but to enter these “prisons for the poor” while the more “fortunate” workers lived in city slums.

Some 175 years ago, in “The condition of the Working Class in England”, Friedrich Engels wrote: “In London, fifty thousand human beings get up every morning, not knowing where they are to lay their heads at night. The luckiest of this multitude, those who succeed in keeping a penny or two until evening, enter a lodging-house, such as abound in every great city, where they find a bed… And those who cannot pay for such a refuge? They sleep where they find a place, in passages, arcades, in corners... A few individuals find their way to the refuges which are managed, here and there, by private charity, others sleep on the benches in the parks close under the windows of Queen Victoria.”

Indeed, from the very beginning, society has been starved of the housing it needs. Capitalists of the real estate business have tried to extract as much profit from the construction of new dwellings, but the poor working class and the cheaply-rented housing they need was never a profitable enough market. On the other hand, the capitalist class as a whole, has an interest in the existence of adequate cheap housing for its workforce, so that it can pay the lowest possible wages.

In the end, it fell to the state as guarantors of the capitalist class, to provide social housing. During the relatively prosperous decades following World War 2, the post-war Labour Government built 1m social homes - at public expense, of course, but still falling short of what was really needed at the time. In fact, in the 35 years following the end of WW2, local authorities and housing associations built a total of only 4.4 million new social homes.

But when the economic crisis broke out in the 70s, government social housing policy changed. Far less home building was provided for in their constrained budgets and so with nothing else to offer, governments promoted the idea of “owning your own home” hoping to appeal to a section of the working class, who would see the ownership of their own homes as providing future security and a step up on the social ladder.

The 1977 Housing Policy Review published by Callaghan’s Labour government went further, overtly encouraging people to buy their own homes. In fact Labour had already enhanced the tax breaks previously given by the Tories to home owners and mortgagees. It now instigated cheap mortgages at a 2% discount, from building societies and from local councils, financed by taxation, for families on lower incomes, which allowed them to borrow more. And for those housing association tenants who couldn’t afford to buy their homes, there was already a “shared ownership” scheme, which allowed them to take mortgages for 25-75% of the total house price and pay a reduced rent. Not only did social house-building plummet, but part of this mortgage bounty was offered to the banks. In 1975, just 2,700 council homes had been bought by their tenants. By 1978 it was 30,000!

However, when Margaret Thatcher’s Tories came to power in 1979, selling off the country’s council housing stock became Thatcher’s “flagship” policy. Between 1980 and 1992, under her “right-to-buy” scheme, a total of 1.75m council homes were sold! The amount raised by these sales, £28bn, made it the most profitable privatisation the Tories conducted, exceeding the combined value of the sale of British Telecom, British Gas and electricity. And of course, this resulted in a major reduction in public expenditure.

While the scheme was promoted as a great gain for former council tenants, in reality they had to take a mortgage to buy part or the whole of their homes, becoming de facto tenants of the banks! And so, above all, it was the banks who benefited, thanks to the interest they charged.

This policy was a disaster for social tenancy. By 1995, council house building had been almost completely halted. From 145,000 completions by local authorities in 1975, a mere 1,900 council houses were completed in 1995! There were still 38,500 housing association completions, which somehow managed to cushion this collapse. But the overall lack of new homes was a major factor in increasing homelessness, which skyrocketed from around 70,000 in 1979 to 180,000 homeless people in 1992. And when the housing market collapsed after 1989, mortgage interest rates were hugely increased, resulting in repossessions due to mortgage arrears. In fact repossessions rose from around 18,500 in 1988 to 75,540 in 1991! Local authorities, which (still) have an obligation to provide homeless people with accommodation, had to re-house homeless families in B&Bs, hostels, and condemned council flats due for demolition.

In the following years, Conservative governments put in place a string of measures to take the remaining 4m social homes out of the hands of local councils - but with only limited success. One of these measures was the so-called Large Scale Voluntary Transfer (LSVT), put in place in 1988. Since councils were prevented from using their receipts from “right-to-buy” sales to maintain their existing council homes, they were invited to transfer their entire stock to newly created housing associations or to existing ones, now usually referred to as “Registered Social Landlords”. But the scheme met the resistance of tenants and local councillors, opposing what amounted to the privatisation of the remaining social housing stock. So under both Tories and Labour governments during the 90s, fewer than 300,000 properties under the LSVT scheme were actually transferred.

But the dismantling of council housing continued under Labour. So when Blair came to power in 1997, his housing minister Raynsford, introduced the “right-to-acquire” scheme, which allowed tenants of housing association dwellings built with public subsidy after 1997, to buy their homes. And since there was no longer any question about increasing the funds available for social housing, councils couldn’t find the resources to build new homes. The number of council homes completed each year, which was already down to a catastrophic level in 1997 with only 1,543 dwellings, ground to a virtual halt, with just 300 completions by the time Labour left office in 2010! The number of homes completed by housing associations, which were supposed to make up for the shortfall for low-income families, only increased by 1.2% between 1997 and 2010, with only 24,740 completions in 2010. And this, despite the housing waiting list having increased from 1m to 1.74m households during the same period!

More and more families, stuck forever on the housing waiting list, were de facto forced into private renting or, for the slightly better-off, into a mortgage debt even if they couldn’t really afford it. But since private developers had made no plans to cater for this sudden increase in demand, house prices began to increase. According to the building society Nationwide, the average house price increased from £59,000 to £165,000 while Labour was in government. And due to the crisis of 2007/8, many families couldn’t repay their mortgages, so much so, that the number of repossessions increased in Britain from 8,200 in 2004/5 to 47,700 in 2008/9!

Back in 1979, 42% of British people lived in council homes. Today, less than 8% do. After years of decline in social housing, the “socially-rented” sector now comprises only 17% of all homes. Private rentals comprise 20% and “owner occupation”, 63%.

And since in 2015 Cameron’s government extended the “right-to-buy” scheme to tenants in housing associations for the full cost of their home, the overall “socially-rented” sector has been dwindling at an even higher rate. Today, there are only 1.6m council homes left, when there were nearly 6.5m in 1979! There are 2.5m housing association dwellings, which cannot make up for the lack of council homes. As a result, the housing waiting list has increased, according to official figures, by another 13% between 1997 and 2017. So today, 1.6m households are in urgent need of social housing. But never mind! Johnson, following in his predecessors’ footsteps, promised that under his government, “as many people as possible” would be encouraged “into home ownership”!

The juicy mortgage market

In parallel with selling the council housing stock, a string of measures were put in place in the interests of the banking sector. So for instance, up until the mid-1980s, mortgages had been mostly the preserve of mortgage banks, the so-called building societies. But when Thatcher introduced the “right-to-buy” scheme, restrictions on banks’ right to lend were lifted, allowing regular banks to expand their business into the mortgage market.

The government also stepped in to ensure that private landlords and banks would get a growing and stable income from rents and mortgages with the so-called “buy-to-let” business. It was encouraged as far back as the end of the 80s, when Thatcher’s government introduced the “assured shorthold tenancy” in its Housing Act of 1988, which gave landlords the confidence that tenants would only reside in a property for a fixed period of time, and they could thus regularly re-let at an increased rent. It also meant, of course, that buying a property purely to let it, became a juicy business, both for landlords and the banks supplying the mortgages.

But “buy-to-let” mortgages really picked up after 1996, after “buy-to-let” owners were given tax relief on mortgage costs. It meant that the government encouraged people to get indebted in order to become landlords! And since house prices were going through the roof, many small and large real estate investors saw it as an opportunity to make a quick buck. From 1999 to 2007, the number of new “buy-to-let” purchases increased from nearly 50,000 to more than 175,000 per year. And despite a temporary decline during the crisis of 2007/8, when many small investors actually lost their “buy-to-let” properties, this type of mortgage picked up again to reach nearly 120,000 in 2015.

Of course, most banks and building societies have had a finger in the “buy-to-let” mortgage market pie. According to the Council of Mortgage Lenders, more than 1.7m of these loans were advanced between 1999 and 2015. So today, an estimated 4.5m tenants live in privately rented “buy-to-let” properties.

However, a section of the Tory electorate saw in the “buy-to-let” business an obstacle to climbing their own property ladder. So the 2015 Cameron government decided to abolish tax relief on “buy-to-let” mortgages. The “buy-to-let” market has since decreased.

After the crisis of 2007/8, the Tory/LibDem coalition government gave further incentives to expand the mortgage market. In 2013, they introduced the “help-to-buy” scheme. This made it possible for lenders to offer mortgages to prospective buyers of newly built homes, who would normally not have qualified, for instance if they couldn’t raise the 25% deposit normally required. The government lent up to 20% of equity needed immediately, so that the buyer only had to pay a 5% deposit in advance. And in order to increase artificially even further the mortgage market, in 2016 the government increased the upper limit of this equity loan in Greater London from 20% to 40% - in order, as they claim, “to reflect the current property prices in London”!

In other words, the government is doing all of the borrowing and guaranteeing that the banks can wish for! All-in-all, the “help-to-buy” scheme has cost the government £15.5bn. And since it was extended until 2023, it will cost an extra £8.7bn. As for the construction companies, why should they build social homes for local authorities, when they can build homes that sell at sky-high prices?

Increasing social rent and capping social house building

Since councils have been cash-strapped for many decades past, the government had to find a way to help increase their capacity to borrow. And they found it, by allowing councils and housing associations to increase social rents and use their higher rental income as security against bank loans!

Already in 2002, Blair’s Labour introduced a “Rent Convergence Policy” which meant that “local authority and housing association tenants [would] eventually pay similar rents for similar properties in similar areas”. Of course, while the policy was supposed to align council and housing association rents in the country by 2012, it was used by successive governments to increase social rents. The Labour government had allowed social rent to increase by the Retail Prices Index (RPI) + 0.5%. Then the Tory/LibDem coalition government, after cutting the budget for building “affordable” housing from £2.8bn to £1.1bn per year, announced that local authorities and housing associations would make up for this 60% cut by increasing social rent; they extended the “Rent Convergence Policy” until 2015 and the new rent formula was RPI + 0.5% + £2 per week. But since social rents were not increasing rapidly enough, in 2013, the government allowed social housing rents to increase by more than 1% above inflation.

In addition, the coalition government introduced a new “intermediate rent” tenure, as part of their October 2010 Spending Review. Housing associations now could offer tenancies at rents of up to 80% (and in some cases 90%) of the local market rate - which became the definition of “affordable” rent! These policies resulted in social rent almost doubling, from an average £48/week in 2001/2 to £87/week in 2016/17! So that “social” rent for a two-bedroomed flat has reached an average of nearly £110/week today.

Finally, the coalition government introduced the Localism Act 2011, which according to Osborne, would limit “the use of lifetime tenancies in social housing … and ensure the best use is made of the social housing stock”. Under this Act, social tenants were given fixed-term tenancies of a minimum of 2 years. At the end of the fixed tenancy period, the tenant’s circumstances would be reviewed by local authorities and a decision made whether to renew the tenancy or not. If local authorities judged that tenants could afford other housing, councils could serve them 6 months’ notice plus 2 months’ notice of “intention to seek possession”! They proposed to “support” tenants into home ownership or help them access other housing options. In other words, social tenants were not only forced to paying higher rents, but they were also pushed into either buying their homes or, if they couldn’t afford it, to move into private rented accommodation - all under the discretion of local authorities with dwindling social housing stock!

After ensuring that local councils could increase their borrowing power thanks to increasing receipts from social rent, the government also gave them access to low-interest loans through a government body called the Public Works Loan Board, or PWLB. A good idea, one might think, since it would allow councils to borrow to build social housing? Sorry but no! Local authorities were allowed to use the money from the PWLB only to invest in... private commercial properties! And this, simply because investments in commercial properties gave a bigger potential return than investing in social housing.

In fact, the government had already introduced new rules against councils borrowing for social housing. To build new homes or temporary accommodation, the councils need to use their Housing Revenue Account (HRA) budget. But the new rules introduced by Cameron governing HRAs, restricted the amount councils could borrow to fund house-building. And while the borrowing cap on HRA did vary from council to council, depending on how much housing debt councils already had, the overall objective of this policy was to ensure councils would borrow to invest in the private commercial property sector and not in building council homes.

May’s empty promises

It took the fire at Grenfell Tower in June 2017, which killed 72 tenants and exposed the dire conditions of council housing stock, for May’s government to pledge that the “wider questions” related to social housing would be taken forward. She lamented that “many people in society - including too many politicians - continue to look down on social housing and the people who call it their home” and promised “a new generation of social rented homes”.

But what came out of these promises? Did the government abolish the practice of employing private subcontractors to run council housing stock, who used the cheapest possible refurbishment materials, which led to the Grenfell disaster? Indeed, under the government’s Housing (Right to Manage) Regulations 1994, Tenant Management Organisations had been created to take over large numbers of council estates, with the objective of turning the screw on social tenants and cutting the maintenance costs of social housing.

It was the largest of these organisations, the Kensington and Chelsea TMO, which took over the borough’s entire social housing stock, including Grenfell Tower. And it was this same TMO which was involved in the cheap refurbishment of the Grenfell Tower that finally led to the fire.

In fact, over 3 years since the Grenfell fire and May’s promise “to fix the broken housing market”, 2,000 buildings, including social housing blocks and student accommodation, have still not had their dangerous cladding removed. And out of those made homeless by the Grenfell Tower fire, over 3 years ago, 7 families still do not have permanent accommodation!

Instead, May came up with a five-year Affordable Homes Programme - a programme of £9.1bn to build 250,000 homes by 2022. The caveat, of course, is that only 5% of these newly-built homes will be for social rent - less than 1,000 per year! The other 95% of these newly built homes can be sold or rented at the “affordable” 80% of market rents! In fact, the programme is entirely geared towards allowing housing association tenants the right to “shared ownership” of homes built under the programme. In other words, the very small number of homes built, of which an even smaller number are social homes, are already open to the private market.

May also announced the lifting of the Housing Revenue Account (HRA) cap, which she argued would incentivise councils to borrow, in order to build much needed social housing. The results of lifting the HRA cap, however, has been close to nil. Around half of all councils have planned to increase their social housing stock, but usually by cross-subsidising it with building for sale or for market rent, which is so much more profitable for already over-indebted councils. Only a tiny minority of councils (4.5%) have decided to build only for social rent. In other words, nothing close to May’s promise of a “new generation of council homes” for Britain. And it wasn’t May’s announcement, in 2018, of a paltry investment of £2bn in social housing over 10 years (a mere £200m per year!) that would make a difference either. All in all, under May’s government, only 14,516 new social homes were built: not even 3% of what is urgently needed!

Johnson’s government, a bit more of the same... and worse

Boris Johnson, in his electoral manifesto last December, promised to “renew the Affordable Homes Programme” and “support the continued supply of social homes”. On the 17 November this year, a Social Housing White Paper was published.

Commissioned back in 2017, after the Grenfell fire, the White Paper was meant to give social tenants “a much stronger voice” against social landlords. So now, social tenants are promised they will be able to “challenge their landlord when things are not working as they should” - and all sorts of legal channels will allow their complaints to be “dealt with promptly and fairly”. As if Grenfell tenants hadn’t challenged the Kensington and Chelsea TMO years before the fire. But their concerns fell on deaf ears regardless of the many “legal channels” used! As for the subcontracting of cowboy companies, which maintain social housing stock on the cheap and directly led to the fire, this has not been put into question. And neither has the successive governments’ bonfire of fire safety regulations, which also contributed to the Grenfell disaster!

And what about the supply of the urgently needed social housing stock? The White Paper announced an additional £11.5bn fund for the Affordable Homes Programme. But in fact this is not all “new” money, since part of it had already been promised by Theresa May back in 2017. So the “funding commitment” already deflates to a £9bn increase in the already existing Affordable Homes Programme. But anyway, this Programme cannot provide the necessary social housing, given that half of the homes built “will be for affordable home ownership”.

Of course, the White Paper reiterates that the government is “determined to increase the supply of new and beautiful social homes”. As for the specifics of how many and when, the 76-page-long document doesn’t say. It merely restates the inadequate social housing policies already in place, including May’s removal of the Housing Revenue Account borrowing cap!

However, according to an article in Inside Housing, the White Paper is clear about one thing: “ministers’ commitment to the Right to Buy and the new Right to Shared Ownership” which “indicates that they are still happy for these policies to chip away at the country’s limited social housing stock”. Indeed, the much awaited Social Housing White Paper has delivered... absolutely nothing.

Luxury flats, on the other hand, continue to be built by their thousands by private developers. The capitalist class can afford £500m to build the 1,016 ft high London “Shard”. And they’re ready to throw in £1.4bn for a new 900,000 sq ft “Gotham City” project in London. Yet 400,000 people are homeless or at risk of becoming homeless and 8.4m people are in need of better homes! Of course, the capitalist class has no obligation to house the working class. The unprofitable construction of working class dwellings is left in the hands of local authorities. And during the past decade of austerity measures, government cuts have diminished social housing supply even more. The huge demand versus the tiny supply allows prices and rents to skyrocket, which can only please all those who make money out of this market - from developers, to banks, to little landlords.

In 1903, the writer Jack London, who described in his book “The people of the abyss” his own experience living among the working class in East London, wrote at the time: “Not only was one room deemed sufficient for a poor man and his family, but I learned that many families, occupying single rooms, had so much space to spare as to be able to take in a lodger or two.” More than a century later, it seems that hardly anything has changed.

29 November 2020