Tackling Affordable Housing

          When thinking about political issues, one normally thinks of Health, Education, Pensions, Jobs. Then there are specialist subjects, agriculture, the environment, war and peace. But over the last ten years one of the major issues in Welsh politics which has not been resolved is that of housing.* 

It seems that there are houses being built everywhere, but government reports continuously refer to ‘the lack of housing’, and if you ask most people on the doorstep (as I do regularly) the lack of affordable housing is a huge concern.

But therein lies the problem. That of affordable housing. 

The issue of affordability is a funny one. In effect it is false economics. The value of the house isn’t the value of the sum of its total parts, but is instead whatever someone is willing to pay for it. Its value increases or decreases depending on multiple factors – schools, jobs, transport, yet regardless of where they are house prices always seem to be higher than what most ‘local’ people can afford. The farther from the economic centre you are the cheaper the house, but still the level of affordability remains beyond the locals. 

The reasons given for the movement of peoples are manyfold. There are house buyers who buy homes for holidaying purposes, or the affordability compared to their home towns, better levels of services, greater sense of community etc. Other less fortunate people don’t have such control over the move. In many cases certain Local Authorities deem that some people are undesirable and pose too many problems, and they therefore pass them onto other Authorities with a fistful of money to assist in the settling in. The one that sticks in my mind is Brighton and Hove’s attempts at social engineering, paying people £3500 to move to Wales. 

Whatever people’s reasons for moving – and I know that they are varied and many, after all I’ve lived in more towns than I can remember, including in a third world country – if you ask people about the issue of housing, the same ‘examples’ crop up, those of ‘scroungers’, ‘dossers’, and most recently of course economic migrants from across Europe.

We always pick on those at the bottom, those that need a roof over their heads most and those that, given the choice, would probably rather not be here either.

But these people are not the problem, and we are picking the wrong fight. 

We shouldn’t forget that it was the housing market, encouraged by Labour’s light touch regulation of the Financial sector and its mortgage companies that largely got us into the current economic mess. This economic catastrophe has in turn given the self-interested Tories and Lib Dems the perfect excuse to decimate our public services and mould the state into a tool for the rich.

 The people at the bottom of the pile are at the mercy of unscrupulous landlords, and battle with what are often unhealthy living conditions. Given the choice they would much rather be with their families. Added to this Thatcher’s ‘Right To Buy’ and the diminishing social housing stock, then we can see why there is a problem. The Tories big mantra of ‘Choice’ is not an option readily available to the poorest. 

The problem with affordable housing over the last ten years is that we were lulled into a false sense of economic prosperity believing that we were successful entrepreneurs because our financial worth on paper had shot through the roof, when in fact we did nothing to deserve this sudden rise in capital value and were in fact sitting on a bubble that was waiting to burst. We played into the hands of greedy financiers, buying mortgages which we couldn’t pay back through our wages but which we assumed would become affordable as the value of our homes got higher. A completely unsustainable economy which would collapse as soon as creditors asked for their money back, resulting in people defaulting and mortgage lenders failing to pay their creditors. And it did, in dramatic fashion. 

So what is the answer? There are many answers, much more than I have space or time to write here. But here are some thoughts in order to start a discussion. 

  • Don’t blame the poorest or economic migrants for the greed of a few is the first obvious answer.
  • Secondly, light touch regulation (depending on the market to regulate itself) doesn’t work. The market isn’t interested in affordability or equality of opportunity, but instead wants to profit as quickly as possible. It is a voracious beast, which if left to its own devices will not be tamed. Financial markets needs strict Government regulation.
  • No mortgage lender should be allowed to provide a mortgage of more than 3 times the income, simply because we’ve seen the devastation wrought on communities when the market collapses and people can’t afford to pay back.
  • More land should be bought under public ownership, and held in trust for the public good. Land ownership is concentrated in the hands of too few people meaning that development opportunities are limited. Public land could be rented out at an affordable rate to home owners, bringing money into the community and allowing the community to control the property values.
  • Empty second homes should be taxed at a far greater rate.
  • Stamp duty should be valued to reflect the locality of the purchaser. 

My aim is to give people real choice. If we weren’t so greedy and insist on getting as much money as possible at every opportunity then we wouldn’t need such legislation, but we are greedy, and in order to allow everyone that equality of opportunity such policies must be considered in order that our communities may thrive and grow organically without being allowed to die because of market forces. After all the current system is failing society miserably. Isn’t it about time we did things differently? 

* Deputy Housing Minister Jocelyn Davies, Plaid Cymru, worked tirelesly to allow the transfer of powers over housing to the National Assembly from Westminster but was blocked by the Conservatives. Shame on them!

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10 thoughts on “Tackling Affordable Housing

  1. Mi wyt ti bron a rhoi dy fys ar y broblem, a bron a rhoi dy fys ar yr ateb. Pam na ellid brwydro dros gael HOLL dir Cymru yn eiddo i’r wlad, ac yn cael ei osod i unigolion/busnesau ayb?

  2. In Wales we have several issues to tackle within our planning system to address the issue of affordable housing. In terms of the general housing market,WAG issue population projections which tranfer to housing projections for local councils in their local development plans (which span 15 years). These figures are based on 50% past in migration trends into an area, although supposedly taking into account ‘local need’ the formula does not consider issues such as affordability.

    Looking at North East Wales specifically, the use of this formula has resulted in tens of thousands of houses being built that the vast majority of local people can’t afford. There is also documented evidence that this planning policy has served to push house prices up even further (Wrecsam for instance seeing a 60% rise in house prices in just a 4 year period not so long ago). I won’t even start to discuss the damage this causes to community cohesion, identity, language, pressure on services, our environment etc.

    This planning policy is also the basis for the West Cheshire sub regional strategy, the excuse for this being an ‘inter dependant housing market’ between Wales and England. In truth this market has been artificially created over a relatively short period of time because of this completely unsustainable planning policy.

    Basically the question is this, why is the welsh planning system catering for the housing wants of another country whilst ignoring the local housing needs of our own communities? This house building bonanza has been happening on a huge scale, meaning we are going to struggle to provide for our own housing needs in the future (even when there is a will to do it), without building on green barrier. The only solution is complete reform of our planning system here in Wales with a refocus on our own communities, whilst at the same time trying to repair some of the damage that’s been done.

  3. The idea of varying stamp duty in terms of the location of the purchaser, rather than the seller, of a property is an interesting one. Are there any examples of this happening elsewhere which might serve as a useful model? A “community right to buy” in areas of housing pressure (in a way complementing the right of local authorities to suspend council house sales in those same areas) might also be of use.

    More generally, a “yes” vote in next year’s referendum would allow the National Assembly to give the planning system in Wales a thorough overhaul free from Westminster interference. It would be good to see some ideas with serious intent in terms of providing a fit-for-purpose structure which promotes ecological and cultural sustainability in various parties’ manifestos for the 2011 elections.

  4. Hi
    Firstly I disagree with your version of why we have a recession,it certainly had little to do with people defaulting on mortgage repayments,and everything to do with a well orchestrated plan hatched to perfection and pulled off by a very small group of financiers.
    But as they say that is another story.
    I see in your summing up you failed to mention stock transfer.Once transferred, council stock is vulnerable to the private sector and tenants subjected highly insecure tenancy rights.Housing associations are just a framework for future privatisation.
    The problem is Plaid policy has allowed the continuation of Labour policy of allowing local authorities the right to go for transfer.Why aren’t Plaid fighting this instead of supporting it.
    There is really only one way you can have affordable housing on the scale that is required and that is through large scale investment in council housing.Plaid seem to keep avoiding the issue.Could you explain why.

  5. @Jim,

    There is another way to have affordable housing, which is to tax, in full, the value crated in the land by the community, through their mere presence, and through public expenditure. The scarcity value of the land would be retained for the community, to whom it belongs, and houses would be affordable to buy. Large scale council housing does not deal with the fundamental problems in our tax and tenure laws that will ALWAYS lead to cyclical property bubbles.

    Furthermore, such a tax would enable incomes to be taxed less, or even not at all, creating a far more equitable society, where the poorest would receive better incomes, untaxed, and wouldn’t have to work 3 jobs just to get by. It would also mean that they could afford to buy a house.

  6. siorsyn,
    What you are saying doesn’t seem to make sense.The fact is that land is scarce because a very small number of the population own it.
    Please expand on the notion that””The scarcity value of the land would be retained for the community””..this seems illogical and not really thought out.The ownership of land like the ownership of capital are the tenets by which the modern system of social injustice operates and prevails.
    You seem to have conjured up a notion of ownership that simply cannot exist,and rationalise this by referring to land tax law peculiarities.
    Then you say people could “afford” to buy a home,but what you fail to realise is that any acceptance and use of the mortgage criteria option only serves to perpetuate the corrupt and socially unjust financial service industry which by it’s very existence ensures that financial and economic injustice permeates our society.
    Put another way,you are hacking away at the the infrastructure to no avail whilst leaving the superstructure intact.
    The idea of building more council houses would serve a two fold function.Firstly it would house people,and omit them form the mortgage route and total financial exploitation,secondly it would herald a commitment to a socialist ideology .

  7. You’re right Jim to say that stock transfer is a step towards privatisation. The councils in Wales that have already done so have thrown away a huge asset. Wrecsam Council kept its council housing and is now planning to put solar panels on the roofs of those facing south to make money from the feed-in tariff… without tenants rejecting stock transfer 6 years ago, that wouldn’t be an option now.
    Everything we do in Wales is limited because the Assembly has so few powers and is dependent (until March hopefully) on Westminster’s veto. We have Hain to thank for that yoke and he shouldn’t be allowed to forget it.

  8. I would also add to your list, make buyers save at least a 10% deposit, so no more 100% mortgages.
    Tackle BTL speculators allowed to take losses and write them off against tax, this has got to stop.
    Scrap the AST’s, give people who can not afford to buy, secure tenure.
    I wish you could be my MP, very good ideas.

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