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Housing crisis continues

Can councils’ sold off homes be replaced?
Rae Passfield and Hajera Blagg, Monday, August 15th, 2016

The UK’s housing crisis continues to intensify as new figures show councils will not be able to afford to replace housing sold off in the Right to Buy scheme and spark calls for urgent reform.


Figures from the Local Government Association (LGA) show that while 12,246 council homes were sold off under Right to Buy in England last year, just 2,055 affordable replacements were started by councils, an astonishing 27 per cent down from the year before in 2014.


As more and more council homes are sold off, those languishing on council home waiting lists now number nearly one and a half million.


After nearly 40 years of Right to Buy decimating council housing, Scotland voted to scrap the scheme in 2014, a move which came into effect this year, while the Wales Assembly confirmed just this week that it would put forward legislation to end the scheme within the next year as well.


But in England, Right to Buy continues unabated, and an MPs report from earlier this year has found that a full 40 per cent of council homes bought under the scheme are now thought to be owned by property investors.


“The potential for selling social housing assets at a discount, only for them to become both more expensive and possibly lower quality housing in the private rented sector, is a significant concern,” the report noted.


The LGA has warned that if the trend of council homes being sold in such high numbers without new replacement homes built to take their place, there will be virtually no social housing left.


Exacerbating the problem is another Tory government policy, which was a central plank of the Conservative manifesto in the last general election – forcing councils to sell off high-value homes in order to fund an extension of Right to Buy to housing associations.


The LGA estimates that by 2020, 66,000 council homes will be sold to tenants, while an additional 22,000 homes will be forced to be sold by councils under the government’s housing association Right to Buy proposals.


LGA senior vice chair Nick Forbes said that such housing reforms “will make building new properties and replacing those sold even more difficult.”


“Such a loss in social housing risks pushing more people into the more expensive private rented sector, increasing homelessness and housing benefit spending,” he added.


Unite assistant general secretary Steve Turner called the latest figures from the LGA “further proof that Right to Buy has been an epic failure and has served only to exacerbate a housing crisis that is now at breaking point.”


‘State-sponsored looting’

“Right to Buy is nothing more than state-sponsored looting of what should be community assets and Unite is calling for the scheme to be scrapped now, just as it has been abolished in Scotland and now soon too in Wales.”


“This is yet another example of working people in England being treated worst by this Tory government,” he added.


Turner pointed to Unite’s housing strategy, which calls for one million council homes to be built. This would not only ease the housing crisis but would also boost the economy. Research has shown that for every £1 spent on housing construction, £2.09 is generated in the economy and between two and four jobs are created if the wider supply chain.


Unite has also called for rent controls on private accommodation, landlord accountability through registration and licensing,  housing benefit being available to all adults including young people, and restoring life-long security of tenure in the social rented sector as well as legislating to increase longer term lets of at least three to five years in the private rented sector.


“Many of Unite’s housing proposals have been explicitly taken up by Jeremy Corbyn, which we very much welcome and will campaign for as the Labour leadership contest unfolds,” Turner added.


The fear from councils of a serious affordable home shortage mirror statistics showing that as home ownership reaches a 30-year low, the government’s passing of the contentious housing and planning Act in April has resulted in millions of families being kept off of the property ladder and made settling down in their own home an unaffordable luxury for many.


For those working families who have secured a mortgage, wealth inequality and soaring housing prices means one in three are just one missed payday away from losing their home, a Shelter and YouGov survey has found.



With house prices rising far above average earnings and a systematic reduction in social housing builds, over 6m people are stuck in poor quality rented accommodation, unable to afford even the 5 per cent deposit needed to secure a mortgage, the Equality Trust say.


For first time buyers in the UK, the average house price is 5.1 times the average earnings. In London, this figure rockets to 9.2 times average earnings, sparking predictions that the capital will become a city of renters by 2025.


The housing crisis represents a depressing demonstration of the inequality rife in our society as, in the last year, 24 of the UK’s richest 100 people have had their wealth rise by almost £7bn – the equivalent of 33,144 homes.


Turner noted that the government must acknowledge that larger and larger swathes of the population will never be able afford their own home.


“That’s why we need a dynamic housing policy like Unite’s that addresses everyone’s housing needs – that means plentiful council homes and social homes for those who need them as well as regulation on the private sector to protect tenants from being ripped off so that they don’t fall through the cracks.


“The government must build its housing proposals around the fundamental idea that a decent, safe home is a human right, not a luxury reserved only for those who can put away a tens of thousands of pounds for a deposit – which these  days, is vanishingly few.”


Find out more about Unite’s housing policy here.



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