Affordable Housing


Here is something that we all should remember checkout this:

 

For well over a decade many have shared the view of truly affordable and rent-able housing which both previous and present governments kept on promising with just a handful are being built but nmtot enough to cater for demand and supply . Many who can recall during the 1970s council housing came to end and in its place came the dreaded Thatchererite policy to sell off council housing at discount prices in the hope many would take up the offer under the guise of right to buy scheme but in reality those who could afford to purchase their council house did so whilst the many who could not were left behind which is true of today.

The Right to Buy scheme is a policy in the United Kingdom which gives secure tenants of councils and some housing associations the legal right to buy, at a large discount, the home they are living in. There is also a Right to Acquire for assured tenants of housing association homes built with public subsidy after 1997, at a smaller discount. About 1.5m million homes in the UK have been sold in this manner since 1980. Critics claim that this compounded a housing shortage for those of low income, initiated a national house price bubble, and what is commonly recognised as the displacement and social cleansing of traditional communities. Supporters claim that the programme gave millions of households a tangible asset, secured their families finances and by releasing cash to repay Local Authority loans, helped improve the public finances.

IMG_2130 Individual local authorities have always had the ability to sell council houses to their tenants, but until the early 1970s such sales were extremely rare.

The Labour Party initially proposed the idea of the right of tenants to own the house they live in, in its manifesto for the 1959 General Election which it subsequently lost.

Later, the Conservative-controlled Greater London Council of the late 1960s was persuaded by Horace Cutler, it’s Chairman of Housing, to create a general sales scheme. Cutler disagreed with the concept of local authorities as providers of housing and supported a free market approach. GLC housing sales were not allowed during the Labour administration of the mid-1970s but picked up again once Cutler became Leader in 1977. They proved extremely popular, and Cutler was close to Margaret Thatcher (a London MP) who made the right to buy council housing a Conservative Party policy nationally.

In the meantime, council house sales to tenants began to increase. Some 7,000 were sold to their tenants during 1970, but in two years that figure soared to more than 45,000 in 1972.

IMG_2162After Margaret Thatcher became Prime Minister in May 1979, the legislation to implement the Right to Buy was passed in the Housing Act 1980Michael Heseltine, through his role as minister for the Environment, was in charge of implementing the legislation. Some 6 million people were affected; about one in three actually purchased their unit. Heseltine noted that, “no single piece of legislation has enabled the transfer of so much capital wealth from the state to the people.” He said the right to buy had two main objectives: to give people what they wanted, and to reverse the trend of ever increasing dominance of the state over the life of the individual.

He said: “There is in this country a deeply ingrained desire for home ownership. The Government believe that this spirit should be fostered. It reflects the wishes of the people, ensures the wide spread of wealth through society, encourages a personal desire to improve and modernize one’s own home, enables parents to accrue wealth for their children and stimulates the attitudes of independence and self-reliance that are the bedrock of a free society.”

IMG_2133The sale price of a council house was based on its market valuation but also included a 33% to 50% discount to reflect the rents paid by tenants and also to encourage take-up. Mortgages involved no down payments. The legislation gave council tenants the right to buy their council house at a discounted value, depending on how long they had been living in the house, with the proviso that if they sold their house before a minimum period had expired they would have to pay back a proportion of the discount. The sales were an attractive deal for tenants and hundreds of thousands of homes were sold. The policy became one of the major points of Thatcherism.

The policy proved immediately popular, and indeed Labour had previously engaged in it on a small scale. Some local Labour-controlled councils were opposed, but the legislation prevented them from blocking purchases, and gave them half the proceeds.

Sales were much higher in the South and East of England, than in the inner city of London and in the North.

MargaretThatcherHalf the proceeds of the sales were paid to the local authorities, but they were restricted to spending the money to reduce their debt until it was cleared, rather than being able to spend it on building more homes. The effect was to reduce the council housing stock, especially in areas where property prices were high such as London and the south-east of England. This trend was exacerbated by a government imposed ban on local authorities using their revenues from council house sales to fund new housing. Both these policies, together with rising rents and cuts to state benefits, have been linked to vast increase inhomelessness, when rough sleepers became an increasingly common sight. Homeless households in England during the 1980s, trebled from approximately 55,000 (1980) to 165,000 in 1990.

200,000 council houses were sold to their tenants in 1982, and by 1987, more than 1,000,000 council houses in Britain had been sold to their tenants, although the number of council houses purchased by tenants declined during the 1990s.

The Labour Party was initially against the sales and pledged to oppose them at the 1983 general election, but then dropped their official opposition in 1985.

However, at the 1987 general election, the Conservative government warned voters that a Labour government would still abolish the scheme.

When Labour returned to power in 1997, it reduced the discount available to tenants in local authorities which had severe pressure on their housing stock; this included almost the whole of London.

IMG_2131The Right to Buy rules were changed in 2005. Five years’ tenancy is now required for new tenants to qualify, and properties purchased after January 2005 can no longer immediately be placed on the open market should the owner decide to sell. Such owners must now approach their previous landlord (council or housing association) and offer them “first right of refusal”. If the previous landlord is no longer in existence, for example in cases where the former landlord was a registered social landlord which has ceased business, then the property has to first be offered to the local housing authority.

The time in which a Right to Buy conveyance should take place has been reduced from 12 months to 3 months. The Financial Conduct Authority now governs and regulates most types of mortgage-selling.

The Financial Services Authority‘s governance of Right to Buy purchases was partly to solve the widespread problem of Right to Buy mis-selling from brokers and solicitors alike. Each had their own agenda and many were actively charging excessive fees which were then taken out of their client’s discount. Fortunately, the above actions that have been taken coupled with the end of the boom period seem to have brought this problem under control.

In 2009, the Localis think tank suggested, as part of a review of principles for social housing reform, that the right to buy should be extended into equity slivers, which could be part earned through being a good tenant.

At the 2011 Conservative Party ConferenceDavid Cameron proposed to increase Right to Buy discounts in order to revitalise the housing market and generate receipts which could be spent on new housing. Social housing professionals have expressed concerns over the proposal.

As of 2 April 2012, the Right to Buy discount has been increased to a maximum of £75,000 or 60% of the house value (70% for a flat) depending on which is lower. In March 2013 the maximum discount in London was increased to £100,000.

The aim of the scheme is, for every additional home sold, a new home will be built for ‘affordable rent’ at up to 80% of market rent, aimed at maintaining the level of affordable housing while also increasing the number of properties available for those on the waiting list. The five year tenancy criterion will remain, and should the property be sold within the first five years of the original sale, part or all of the discount will be required to be paid back.

In July 2013, the Scottish Government confirmed that Right to Buy would be abolished in Scotland from 2017.

IMG_1799The debate on housing takes on more and more of the logic of Alice in Wonderland (Britain’s building crisis – and how to solve it, 20 May). First and foremost, the debate is wrongly framed in terms of assets and finance and not housing. Thatcher’s right to buy was an asset wheeze not a housing policy. Its contingent effect was to actually undermine supply by reducing the effective market for private-sector homes. The parallel attack on local authority building under the pathetic smokescreen of increasing housing association output has had the same effect, with output collapsing from 113,000 the year before she was elected to 1,500 the year the Tories left office, before then sliding further under Labour.

However, in the 40 years since 1970, through all the financial ups and downs and the tireless meddling of politicians in the planning system, the private sector built at a fairly consistent level of about 160,000 until 2010, since when it has collapsed to 100,000 (all UK figures) During a roughly comparable period, real house prices have increased by about two-and-a-half times.

The idea that the private sector can build twice as many houses as it has achieved on average since 1970 and that this will buck the trend of the increase in asset price is not credible. The further assumption that property-owning turkeys would vote for such a Christmas present is fantasy. Until housing is seen as a basic right, the rental market is completely transformed and democratised and land values are taxed, the tinkering suggested by your contributor and others will be doomed to be swamped by unintended consequences, just like Help to Buy.

IMG_2012Savills is quoted as saying that if building does not increase quickly, there could be a shortfall of 160,000 homes in the south of England in the next five years, and the Home Builders Federation claims house-building needs to effectively treble to 350,000 dwellings a year to control house price inflation. Should not an analysis of the problem include reference to the demand side? In particular, that if net inward migration continues at current levels, then in five years there will be a further million or so people needing homes. Surely allowing this influx of people to continue unchecked is counterproductive when we have a shortage of housing and – relative to other European countries – a shortage of space in which to build them.

Mark Carney and the coalition leaders try to pin the responsibility on each other for doing something about the housing market, which Carney correctly states has “deep, deep structural problems” (Report, 19 May). In response, Cameron quickly passes the buck again by saying: “We have given the Bank of England the duty to make sure that bubbles are dealt with in the economy.” But housing bubbles are best dealt with by an anti-inflationary tax on property such as the old JS Mill land tax, which measures how much land goes up in value in a year and taxes that. This is the province of the politicians but they are loath to jeopardise elections by even the appearance of threatening the homeowner vote in any way.

The Labour Land Campaign seriously considered branching out from lobbying fellow socialists by approaching the banks saying: “Get behind LVT: you are the first to lose when housing bubbles pop and wipe out inflated mortgages in your collateral.”

Planned cuts to housing benefit, and the replacement of secure tenancies with time-limited agreements at up to 80% of market rents, are an ill-conceived threat to tenants and would be a disaster for communities (Social security advisers warn against housing benefit changes, 1 December). These measures will create more evictions, homelessness and fear, but will not curb high rents. They do nothing to create the secure, affordable homes for rent needed by those priced out of the housing market. They will create exclusion zones, driving out the low-paid, the sick and the poor and their families. We urge councillors, MPs, tenants’ groups, trade unions, and housing, disability and poverty campaigners to join in a campaign to oppose these cuts.

We must defend security of tenure for existing and future tenants, and resist and campaign against the cuts in housing benefit. Councils and other landlords should not implement cuts to housing benefit, where this is under local control, and refuse to evict tenants who get behind with their rent as a result of the benefit cuts. We should oppose raising rents up to 80% of market levels and make clear that the shortage of housing is a result of underinvestment and a failure to build – it is not caused by existing tenants of whatever race or religion. We need to regulate to control private-sector rents and campaign for a programme of investment in new and improved council and other house building at affordable rents.

Thirty-five years of failed neoliberal housing policy have reached a new low.

David Cameron has announced that, if elected, a Tory government would build 200,000 new homes a year and offer 20 per cent discounts to first-time buyers under the age of 40.

It will do this by robbing Peter (the five million people on waiting lists) to pay Paul (the property developers who now control our housing policy).

Under the scheme, builders will be exempted from “section 106” payments, the crumbs from the table of big planning agreements that require local communities to see some benefit from development.

This can be in the form of infrastructure or amenities, but has increasingly become the source “affordable” housing.

The term “affordable housing” has been subject to such misuse as to be almost meaningless.

The latest examples are the “affordable rents” at 80 per cent of the market level that are becoming a norm for new rented homes built with public subsidy.

As with other aspects of the housing crisis, new Labour must take some of the blame.

During the “boom” years unscrupulous developers, avaricious housing associations and supine councils made an unholy pact.

Developers built as many private homes as they could, while housing associations and councils colluded in massaging the definition of “affordable” to help them get away with it.

IMG_2200They were all seduced by the fantasy that the housing market could provide sustainable economic growth and the homes we need.

In the aftermath of the crash and growing anger about the scale of the housing crisis, this illusion lies in tatters.

Cameron’s announcement is a reward for failure. Public-private partnerships (PPP), which we’re told are more efficient than direct public investment, have led to a steady decline in the number of homes built.

In the 1970s 300,000 new homes a year were completed, half of them by councils.

Today output is down by two-thirds. Councils have been virtually eliminated as housebuilders and housing associations have failed to fill the gap.

Research by the Bureau of Investigative Journalism in 2013 found that 60 per cent of large housing developments were failing to meet even the inadequate targets for affordable homes.

According to the bureau, the “big 10” housebuilders control enough land to provide 480,000 new homes and made profits of £2.1 billion last year, up 34 per cent.

The big developers are both causing and profiteering from the housing crisis and now the Tories want to make it even easier for them to do it.

This is a political open goal for the Labour Party, but it’s missing.

Instead of making clear statements about the homes we need, it is alleged Ed Miliband is playing the numbers game, trying to outbid the Tories on how many homes a Labour government would build.

It’s meaningless. Yes, we need more homes, but it’s “what type?” as much as “how many?” that matters.

Allowing developers to reflate the speculative property bubble makes the next market crash inevitable, while British households struggle to meet the 40 per cent of income now consumed by housing costs.

The only way to defuse the housing market is to build more genuinely affordable homes and that means council housing.

It was a shame to hear Green Party leader Natalie Bennett struggle to explain how this can be done.

It’s simple. Let’s start with the £25bn, and rising, we currently waste on housing benefit effectively a public subsidy to private landlords.

Second, let’s stop giving away valuable public land to private developers. The government has recently announced another fire sale of sites where 103,000 new homes can be built, with more in the pipeline.

Its further alleged that Labour government should halt this immediately and use public land for public housing.

IMG_2201Third, with rates at historic lows, the government can borrow now to invest in housing for the future.

Fourth, we can take people off the dole and give them decent jobs and apprenticeships building the homes we need.

Fifth, we can make this new generation of council homes energy efficient and begin to save the £100 a month UK households spend on energy costs.

I have enclosed five manifestos from UKIP, Conservatives, Greens, Libdems, and Labour for your perusal:

http://www.ukip.org/policies_for_people

https://www.greenparty.org.uk/news/2015/02/05/green-party-policy-announcement-500,000-social-rented-homes-by-2020/

http://www.libdemvoice.org/tag/housing

http://www.conservativehome.com/thetorydiary/2015/01/camerons-manifesto-list-borrows-from-the-conhome-manifesto.html

http://www.yourbritain.org.uk/agenda-2015/policy-review/the-lyons-housing-review

After reading all the five manifestos from various parties I must that I continue to be very impressed with Labour policy on housing and more can be done to improve on it.

I have read  all five and felt that both UKIP and the Greens won’t be able to deliver and how will they raise the finances it’s like pie in the shy with a bottomless pit.

Both the Conservatives and Libdems offer more of the same and they are depending on a hung parliament so they can return as sweethearts for another fives of coalition. It must be love at first sight waiting for a rebound to happen again.  I rather put my faith in the Labour Party to deliver decent truly affordable and rentable housing as I’m confident that they will deliver without hitting out on the poorest in our society for the is reason I say a vote for UKIP, Greens will be a vote for a return of a Conservative Government. A vote for the Libdems will see a return of five more of another coalition with the Conservatives at worse Conservatives and UKIP in coalition.

A vote Labour is to see a return of a Labour majority government to keep out the Conservatives.

 

 

 

 

 

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3 responses to “Affordable Housing

  1. Reblogged this on jaynelinney and commented:
    Affordable Housing A REAL Analysis of ALL Party Pledges on Housing @gordonlyew1 READ before you VOTE #Election 2015

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