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How to tackle London’s housing crisis

Jeremy Corbyn’s vision to rebuild and transform Britain can both tackle the housing crisis and win for Labour, writes Diane Abbott MP.

A study for the charity Shelter this week explained that one in three families in England could not pay their rent or mortgage for more than a month if they lost their job, with the reasons cited being high housing costs and a lack of personal savings. The YouGov survey questioned 8,381 adults, including 1,581 members of working families with children and its results painted a stark picture of the insecurity so many people face in Tory Britain today.The study concluded that 37% of such families would be unable to cover their housing costs for more than one month with no job, while 23% said they would be unable to pay their housing costs at all. Additionally, 48% of families in the survey named the cost of housing as the biggest drain on their budget.

As Shelter chief executive Campbell Robb said, “These figures are a stark reminder that sky-high housing costs are leaving millions of working families stretched to breaking point, and barely scraping by from one pay cheque to the next.” This report is just one illustration of how housing in this country is increasingly marked by anxiety rather than security and is quite simply a shocking indictment of Tory policy.

It’s hard to overstate the extent of the housing crisis, especially here in London, including in my constituency of Hackney North and Stoke Newington, where here in the capital median house prices hit £380,000. The previous part-time Tory mayor of London, Boris Johnson, nurtured an environment in which developers and buy-to-let landlords have been able to trample on the interests of ordinary Londoners.

Indeed, one of the key reasons for Sadiq Khan’s impressive and important victory in May’s Mayoral election was his focus on genuinely affordable housing, which provides a welcome contrast with the failure of Boris to even try to get to grips with the crisis. According to Nationwide Building Society, the average house price to earnings ratio for first-time buyers in London was 3.7 in the first quarter of 1983. By the second quarter of 2016, this had become 10.4.

Social housing has been destroyed in many areas and the word ‘affordable’ takes on an Orwellian meaning when it refers to 80% of market rates. Now, nationally, the Department for Communities and Local Government believes that average annual household formation will be 210,000 between 2014 and 2039 – so the crisis is likely to get worse and radical action will be needed.

Under the Tory government, house building levels have plummeted, growing numbers are priced out of home ownership and private rents have spiralled. There are now 1.24 million households on council waiting lists in England alone.

Additionally, the biggest cause of homelessness is the ending of short hold tenancy and Cuts to housing benefit and the cap on benefits paid to each household have hurt some of the poorest people and thousands of people are being punished by the bedroom tax.

To make matters worse, as my Shadow Cabinet colleague Grahame Morris MP pointed out in The Morning Star last weekend, this government now plans to restrict housing benefit for vulnerable people living in supported housing.

As Grahame argued,  “what makes this idea even more shocking is the fact that ministers haven’t even bothered considering any evidence about the impact of their plan,”  and as “there is already an inadequate supply of specialist supported housing across the country… Rather than cutting back on the support for this type of housing, the government should be racing to plug the shortfall.”

But there is an alternative.

As part of his campaign to be re-elected Labour leader, Jeremy Corbyn recently launched his ten pledges to rebuild and transform Britain. These included the secure homes guarantee, which says “We will build a million new homes in five years, with at least half a million council homes, through our public investment strategy. We will end insecurity for private renters by introducing rent controls, secure tenancies and a charter of private tenants’ rights, and increase access to affordable home ownership.”

Through local councils we can ramp up the number of homes being built each year, allowing them to borrow to build, and thereby making a significant contribution to fixing our broken housing market. In parallel, regulating rents for private sector tenants can immediately help bring a degree of financial planning and certainty to the sector, with people being confident they will continue being able to afford their home.

Rent controls for private renters on a local authority basis would allow rents to reflect the local housing market and need in individual areas.

Too many people live in insecurity and squalor that should be unacceptable in 21st century Britain and I fear for the future of our communities. A radical, Jeremy Corbyn-led Government has the solutions to fix this.

The aforementioned construction of at least a million homes – over half of which will be council housing – would not only see the building of genuinely affordable homes, both to rent and buy, but also give a big and much needed boost to the economy, including in terms of job creation.

Labour’s aim on housing must be to end the housing shortage, build decent affordable homes for all and end the upward spiral of prices such a policy would be both popular and genuinely transformative, providing the radical solutions we need.

Housing is just one area where a Jeremy Corbyn-led Labour Government committed to rebuilding and transforming Britain could improve the lives of millions through pursuing a credible alternative economic strategy based on investment not cuts – let’s re-elect Jeremy this summer, unite to build the momentum for a Labour victory and transform Britain for the better.

6 Comments

  1. Paul Dias says:

    It will be very difficult to tackle the housing crisis for as long as we live in a capitalcentric economy.

    While (most of) London booms and thrives, the North East, for example, is waning away for lack of jobs. House prices are actually going down, but why buy a house there if you can’t find work?

  2. Barry Hearth says:

    But as Paul Dias says in other parts of the UK house prices for this who would like to buy, or sell, are falling. But without meaningful employment nothing is possible.
    Housing is a UK problem and not the same across the UK, of course, but there is a pressing need to tackle an ever growing housing crisis.
    But, it doesn’t help anyone to say that under Johnson bad landlords were encouraged by generous buy to let schemes, those scheme’s we’re encouraged massively under a Labour government, Yes Neil Kinnock, A LABOUR GOVERNMENT.
    As a movement the quicker we accept and address that the better.
    Honesty has to start now, and under Jeremy Corbyn I believe it will.

  3. David Pavett says:

    Like Paul Dias I am puzzled by this article.

    Diane Abbott points to Jeremy Corbyn’s pledge to build a million homes in five years. That’s 200, 000 homes a year. When David Cameron promised that level of House building DA wrote in the Guardian

    Building 200,000 new homes each year by 2020 is a noble aspiration. But it is not enough.

    Jeremy Corbyn’s pledge comes with no reference to the considerable work on housing by John Healy, or indeed to any work at all. All that accompanies the pledge is a 50 word explanation. Is this enough?

    DA also refers to Sadiq Khan’s commitment to provide “genuinely affordable” homes. The question is what is indicated by adding “genuinely” to “affordable”? In his manifesto he said that he would build

    Homes for London Living Rent – a new type of home for people struggling to rent privately, where rents are based on one-third of average local wages.

    I wish that the difference between this and the government’s policy of limiting “affordable rents” to “80 per cent of private market rent” was obvious to me but it isn’t. It looks too much like the politicians’ ploy of countering one measure with a completely different one making comparison impossible.

    And is the one third of average local wages that good? Is it even meaningful? How local? If someone is in the queue for such accomodation it is likely that they will earn below the average local wage (however calculated). So I guess this could result in paying around half their income in rent. Is that thought to be an achievement?

  4. David Pavett says:

    What does it tell us about left Labour politics that an article on London’s housing crisis generates so little response?

    1. C MacMackin says:

      I think part of the reason it’s gotten little response is the relative lack of actual content. There isn’t really much to engage with here. Your earlier questions are relevant, but I don’t know enough about the housing market and the country’s demographics to be able to comment.

      1. David Pavett says:

        Thanks for the response. The article is admittedly weak. I don’t know much about housing either but I always read pieces that come my way. It is alarming to see near meaningless stats and numerical claims bandied about on this question. Diane About is far from being alone in this. All I did was to ask for clarification about such things. If past experience is anything to go by this is hardly more likely to be forthcoming from left wing advocates of greater democracy than it is from the right. Sad. (I will apologise profusely to DA if she proves me wrong in this instance.)

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