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Housing is now financialised, like the rest of market capitalism

Green plastic monopoly houses, by 123rf.comThe enforced sell-off of housing association homes, at the same enormous discounts as under Right to Buy (£70,000+ for a flat and up to £102,000 for a house) is driven by the two Tory goals, not only to act as bribes for voters at election time, but also to bring homes as an asset into play in the private market.

Implicit in that goal are two other Tory presumptions. One is that rents should also be determined by the private market, and the euphemism of ‘affordable rents’ is simply a con to distract from the truth that such rents are a teeny-weeny bit below market rates on their way to reaching full market levels. The other is that while tenancies are in principle inferior to ownership, Council tenancies which charge a ‘social’ rent of around half of market rates are anathema. Council tenants, like scroungers in the Tory panoply of poisonous misrepresentation, are pampered, not taking responsibility for their housing, and needing to learn the benefits of individualism.

This explains why the Tories, on coming into office in 2010, cut the capital funding for social housing by no less than 60%, despite the enormous shortage of such housing. Then they scrapped secure tenancies and introduced fixed term tenancies. Still they harassed Council tenants further by imposing means tests so that if tenants improved their lot and increased their income – the very model of aspiration that the Tories like to preach – they can be forced out on the grounds that that they no longer need a Council tenancy. The implication of this in the Tory psyche is that Council tenants have no security of tenure and no rights that cannot be overturned by government fiat.

The same morality (or immorality) is now being applied to working class estates which may have been built under charitable auspices by Victorian philanthropists, but then a century or more later the descendants of the original founder are hard-up (or greedy for an easy killing) and sell to private developers or private equity. If the latter then decides to demolish the estate and replace it by building expensive homes for sale, the tenants are subject to eviction and, if they’re lucky, offered alternative accommodation in (as in one case) Hastings, Birmingham or Manchester. The financialisation of housing proceeds apace and a community to decent and secure housing for all evaporates.

This is not only a vile policy, it also has perverse results. Tory-run Westminster tried to sell its Council housing in the Homes for Votes scandal in the 1980s. Now it has been ruled by the Supreme Court that it acted unlawfully in forcing a single mother to move to Milton Keynes, and today faced huge bills in providing temporary accommodation for homeless families. It has just spent £20m on buying back 45 homes previously sold under Right to Buy so that it can re-house families who are over-crowded or affected by regeneration schemes. We haven’t heard the end of this saga yet.

Image credit: Green plastic monopoly houses, by


  1. Robert says:

    This is surely an English issue, again housing is devolved . People in Wales have been able to but knock down Housing association homes for years mine is worth £157,000 it’s mine for £57,000.

    The council has now stated due to shortages of homes no more council or housing association homes will be sold.

    This angered the people so much the Assembly have stated this is a short term issue.

    Seems the people have spoken they like cheap housing.

    What a shame labour did not build more council houses.

  2. J.P. Craig-Weston says:

    Another excellent post, but I’d also add that since many people living in social housing are on low or insecure incomes or benefits often due to age or disability; the misguided aspiration, (at the root of the sub prime crisis and it’s dire repercussions,) that we’ve all had inflicted on us, (a house as a financial asset not as a home,) post Thatcher is not just unrealistic but is even wrong headed.

    But as pointed out previously Blair had 13 years to build more social housing and couldn’t have cared less about it or about those people for whom it was intended as affordable, secure and decent alternative to buying.

    Also and this in neglected in most analysis, “giving away,” discounted, (subsidized,) social housing doesn’t simply rob a Housing Association of an asset on the form of a particular property it also deprives them of all the future revenues and income that should be generated from that property, which is essentially robbery by the government; once again of the least well of to the benefit the better off.


    The benefits of individualism is a euphemism for the rent seeking of the bankers. The individuals pay a few thousand to sit and eat prawn cocktails with Cameron and Osbourn, and presto, public housing becomes a nice little earner for the finance industry in interest payments, well in excess of real values and 7-10 times incomes.

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