Why is there a housing crisis? What should we do about it?

We’ve asked all the candidates up here to start with a 5 minute contribution on what they believe to be the causes of the housing crisis and how their party would resolve it.

Before I ask them to speak, I will briefly outline the Living Rent Campaign’s answers to those questions.

I hope that as well as telling us what they would do, the candidates will take this opportunity to listen to the views and experiences of all of you who have come along tonight. We’ll be asking for questions and contributions from the floor very soon.

Is there a crisis?

Most definitely there is a crisis, and we are feeling it very acutely in Brighton & Hove. When we go out talking to people at our street stalls, we hear the same issues come up again and again – rents are unaffordable, decent housing is very difficult to find, there’s no security for tenants. People who are lucky enough to be settled in homes they own tell us that their children can’t afford to move out. People on benefits find that landlords or letting agents aren’t prepared to let to them. Letting agents demand ridiculous fees. The number of people sleeping rough is rising dramatically.

I won’t go on, because everybody knows there is a big problem. But here’s one statistic to start us off.

The council’s most recent snapshot of private sector rents shows the average rent for a 3 bedroom house in the city to be £1,519 per month. Local Housing Allowance – the maximum housing benefit payable – for a 3 bedroom property is £988, so families on incomes low enough to qualify for full housing benefit would need to put in over £500 a month towards rent, which comes out of money needed for food, clothing and other bills.

So what caused the crisis?

We’re now living in a country where housing, and land, are seen as investments not homes.

House building has not kept pace with the growth of population over the last 20 years, as the market has failed to fill the gap left by the withdrawal of the state from housebuilding.

 Where will we live? James Meek writes about the housing crisis

Where will we live? James Meek writes about the housing crisis

Owners of land are sitting on it, undeveloped, because the appreciating value of the land is worth more to them than the profit they could make by building sooner.
When houses are built, they don’t end up as homes for people who can’t afford to pay their rent. Many are bought as investments, pushing up house prices further and dragging rents up with them.

Some people are doing very nicely out of the current situation. Private landlords have made £177bn in profit from capital gains over the last five years. That’s without even including the income from rents, a cool £9bn a year of which comes from housing benefits.

The roots of the crisis go right back to the 1980s, when the Thatcher government took a series of steps to deregulate the housing market:

  • The Right to Buy policy meant that councils have been forced to sell homes at large discounts and prevented from reinvesting the proceeds in more housing. In Brighton & Hove, since 1997, the council has sold off 1,342 dwellings, and built just 15 new homes, with another 200 on the way.
  • Private tenants lost their historic rights to security of tenure and, crucially
  • New tenancies were not subject to the Fair Rent system, under which local authorities set a maximum rent that could be charge for each property.

While buy-to-let landlords receive generous tax breaks and land owners artificially restrict the supply of new housing, more and more people are finding that they simply can’t afford to live in Brighton & Hove.

When we talk to people in the streets, most people agree that the current situation can’t go on. Most people say it’s ‘crazy’ or some variation on that. I think calling it crazy lets off the hook the people who have taken deliberate decisions that brought us to this point. I say this situation is not an accident and it’s not a mistake. It’s wrong, and we need our politicians to take action to put it right.

What should be done?

Over 2,500 people have signed our petition in support of the following actions. That’s more than the margin by which all three local MPs were elected in 2010.

All these proposals are based on a simple underlying idea – that housing is a human right and fundamental need. It’s an idea that’s being expressed powerfully across London by people fighting to keep their homes like Focus E15, the New Era Estate and the Sweets Way occupation.

Housing shouldn’t be an investment opportunity and if we want to call ourselves a civilised society, we need to work out how to meet this basic need for everyone, regardless of their income or wealth.

  • Bring back fair rents. We need rents pegged to income, not market rates. There are rent control systems currently in operation in several countries in Europe, such as Germany, Switzerland and Sweden. The rental market in those countries has not collapsed. It’s time we made a stand against the scaremongering of people who have made a killing from the current free-for-all, and set community standards for the amount of rent landlords can charge.
  • End the right to buy. Allow councils to borrow against their assets to build more social housing.
  • Long term secure tenancies in the private sector, to allow people the chance to put down roots and be part of their local communities
  • Regulation of all private landlords and enforcement of strict minimum standards for housing in the private rented sector
  • An end to agency fees and to discrimination against tenants on benefits

(Written and spoken by Dani Aherns at The Living Rent Campaign Housing Hustings on 31st March 2015)