\n<\/p>\n
A<\/span><\/span>t the wicked heart of both household and national finances is housing. It is the great social divide, the chasm between the perilously insecure and the asset-rich. Housing burns away private renters\u2019 ability to live on their pay, while every year the wealth of homeowners swells. Members of the lucky boomer generation who bought their houses in the 1970s have reaped huge unearned profits. Yet Conservative chancellors keep throwing petrol on the flames.<\/span><\/p>\n The new help-to-buy scheme and stamp duty holiday extension announced in Wednesday\u2019s budget offer feelgood comforts to prospective Conservative homeowners and will warm the cockles of estate agents\u2019 hearts. But both worsen the distortions in our economy. The chancellor, Rishi Sunak, appears to have learned nothing from how such schemes push up house prices. In fact, this is quite deliberate. Of course he knows the effects of George Osborne\u2019s flagship help-to-buy scheme, but pushing up prices is what both homeowners and estate agents want. The concerns of private renters fall below the Tory polling radar.<\/p>\n In reality, it\u2019s the children of homeowners and the already wealthy who will benefit from such schemes. According to research by Shelter, the average first-time buyer in England will pay \u00a3224,600 for a property, requiring \u00a311,200 for a 5% deposit and an income of \u00a359,300. Yet two-thirds of renters have no savings at all, let alone a deposit. That\u2019s the gigantic gulf: most homeowners can\u2019t imagine life without a penny in the bank.<\/p>\n There are now less than half the number of council houses in Britain than in 1980, when council tenants first gained the right to buy their homes under Margaret Thatcher\u2019s signature policy. Of those sold under right to buy, 40% have changed hands from original owners to private landlords, who often charge tenants more than council rents next door. In Tory mythology, right to buy was a triumph, and successive Conservative governments have reprised the illusory homeowning, share-owning democracy that Thatcher first promised.<\/p>\n What their policies have created is a penurious legion of permanent private renters. Short of an economic revolution, large numbers of people will never own secure places to live. Thatcher\u2019s break with a postwar Tory tradition is nowhere more brutal than in housing. As MP for Stockton-on-Tees, Harold Macmillan was shocked by slum housing and scarred by the social deprivation he saw after the first world war. Macmillan was named housing minister under Churchill\u2019s government, and he built 300,000 houses a year \u2013 private and council \u2013 in a far less prosperous Britain than today.<\/p>\n Britain\u2019s stock of social housing keeps declining. Between March 2019 and April 2020 just 6,566 new social-rent homes were built, and in recent years the UK has lost more social housing than it has built. The latest extension of the stamp duty holiday will cost a further \u00a31.6bn on top of the \u00a33.3bn cost of the original extension. Labour argues that it subsidises second home owners and landlords, with money that could have been used to build more social housing.<\/p>\n The deadly effects of poor-quality and overcrowded housing have been exposed during the pandemic. Nearly a quarter of private-rented properties now fall below the bare minimum \u201cdecent homes\u201d standard, according to the English Homes Survey, which found that overcrowding is rife. The insecurity of renting forces families to move on at short notice, dragging children from schools and relatives. Even social housing isn\u2019t secure so long as the bedroom tax remains in place. An estimated half a million renters are now behind on their rent, yet, while rents continue to rise, the chancellor froze the local housing allowance. <\/strong>Renters are getting older and older: a third of 35- to 44-year-olds in England are renting from a private landlord, compared with one in 10 in 1997. More will rent into old age, but they won\u2019t benefit from the security or equity of home ownership.<\/p>\n But why should the government worry? Even though the average home costs about eight times the average salary, 63% of English households own their homes. So why bother about the rest?<\/p>\n Indeed, 63% is an ample number of contented voters. Let Labour whinge about the others: housing comes low in Ipsos Mori\u2019s issues index. Pumping up prices gives nothing but pleasure to homeowners: UK house prices rose by an average 7.6% in 2020, even during that Covid-stricken year. In an economy addicted to ever-rising asset values, where homes also function as pensions and family banks, guaranteeing 95% mortgages gives the government every incentive to ensure prices keep on climbing upwards, to avoid paying for negative equity in a downturn.<\/p>\n Paradoxically, the faster house prices rise, the fewer people can afford to buy them \u2013 even with new Treasury subsidies \u2013 and the more people fall into private renting. Families who own their homes will do all they can to stop their children falling into a downward renting spiral. But Tory policy ensures that huge numbers of people will remain in the nightmare of private renting for ever.<\/p>\n The market will never build enough homes, and certainly not enough \u201caffordable\u201d homes, as scarcity drives up prices. Rather than treating housing as something for the market to rectify, the state should start building more social housing. It already owns land aplenty, and doing this would be a double win: it would both help to solve the housing crisis and deflate house prices by introducing more social rent properties on to the market. But you can\u2019t expect anything like that from a pork-barrelling government that shows no interest in anyone but its own voters.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" At the wicked heart of both household and national finances is housing. It is the great social divide, the chasm between the perilously insecure and the asset-rich. Housing burns away private renters\u2019 ability to live on their pay, while every year the wealth of homeowners swells. Members of the lucky boomer generation who bought their […]<\/p>\n","protected":false},"author":227,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[22945],"tags":[11970,10853,1811,2292,1552,17045,16109],"jetpack_publicize_connections":[],"acf":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/todayheadline.co\/wp-json\/wp\/v2\/posts\/355856"}],"collection":[{"href":"https:\/\/todayheadline.co\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/todayheadline.co\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/todayheadline.co\/wp-json\/wp\/v2\/users\/227"}],"replies":[{"embeddable":true,"href":"https:\/\/todayheadline.co\/wp-json\/wp\/v2\/comments?post=355856"}],"version-history":[{"count":0,"href":"https:\/\/todayheadline.co\/wp-json\/wp\/v2\/posts\/355856\/revisions"}],"wp:attachment":[{"href":"https:\/\/todayheadline.co\/wp-json\/wp\/v2\/media?parent=355856"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/todayheadline.co\/wp-json\/wp\/v2\/categories?post=355856"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/todayheadline.co\/wp-json\/wp\/v2\/tags?post=355856"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}