All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small...
Transcript of All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small...
![Page 1: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1.jpg)
![Page 2: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/2.jpg)
![Page 3: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/3.jpg)
DannyDorling
ALL THAT I S SOLID
TheGreatHousingDisaster
![Page 4: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/4.jpg)
Contents
Listoffiguresandtables
Chapter1:Crisis
‘GenerationRent’
DisasterCapitalism
Recentinequality
Chapter2:Planning
Housingdemand
Avariceandignorance
Hopeandfreedom
Chapter3:Foundations
Hometruths
Theapproachingdisaster
![Page 5: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/5.jpg)
Chapter4:Building
Landandmigrants
Renovationandreality
Location,location
Housingandrace
Chapter5:Buying
Homeownership
TheBedroomTax
Skimmingprofits
Affordablehousing
London
Chapter6:Slump
Smallrooms
Housingfinance
Super-rich
Lendingslowdown
![Page 6: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/6.jpg)
Chapter7:Speculation
Debtandarrears
Healthandeviction
Negativeequity
Homelessness
Squattingandrefurbishment
Chapter8:Solutions
Therightnottoberippedoff
Therightnottobestupid
Conclusions
Notes
Acknowledgements
FollowPenguin
![Page 7: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/7.jpg)
ALSOBYDANNYDORLING
Population10Billion
The32Stops:LivesonLondon’sCentralLine
UnequalHealth:TheScandalofOurTimes
ThePopulationoftheUK
TheVisualizationofSocialSpatialStructure
TheNo-nonsenseGuidetoEquality
FairPlay:AReaderonSocialJustice
Injustice:WhySocialInequalityPersists
![Page 8: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/8.jpg)
TheAtlasoftheRealWorld(withMarkNewmanandAnna
Barford)
SoYouThinkYouKnowAboutBritain?
IdentityinBritain:ACradle-to-GraveAtlas
(withBethanThomas)
![Page 9: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/9.jpg)
ToStacy–forfourdecadesoffriendship
![Page 10: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/10.jpg)
Listoffiguresandtables
FIGURES
Figure1.Dreamhome:6,000-square-foothouse,frontelevationsandfloorplans,UnitedStates,2001.(Source:redrawnfromR.Frank,‘Fallingbehind:howrisinginequalityharmsthemiddleclass’,lecturepresentedtotheseventhAaronWildavskyForumforPublicPolicy,RichardandRhodaGoldmanSchoolofPublicPolicy,UniversityofCaliforniaatBerkeley,18–19October2001.)
Figure2.AveragenumberofdaystocompleteaforeclosureintheUSby
![Page 11: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/11.jpg)
state,2007–12.(Source:RealtyTrac–reportedinturninSusanSaulny,‘Whenlivinginlimboavoidslivingonthestreet’,NewYorkTimes,3March2012.)
Figure3.Privatehouse-buildingandmortgagelendingintheUK,1920–38.(Source:redrawnfromG.Speight,‘Thelendingfrenzyofthe1930s’,presentationmadeattheAshmolean,Oxford,2010.)
Figure4.InterestratesintheUKbytypeofloanandTreasuryBills,1925–39.(Source:redrawnfromG.Speight,‘Thelendingfrenzyofthe1930s’,presentationmadeattheAshmolean,Oxford,2010.)
![Page 12: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/12.jpg)
Figure5.BuildingsocietyDirectorfeesintheUK,1895–1940.(Source:archivalrecordsofsixbuildingsocietiesin:L.Samy,‘“Theparadoxofsuccess”:theeffectofgrowth,competitionandmanagerialself-interestonbuildingsocietyrisk-takingandmarketstructure,c.1880–1939’,DiscussionPapersinEconomicandSocialHistoryNo.86,UniversityofOxford,January2011,Figure14.)
Figure6.UKaveragelandpricesandhouseprices,1983–2009.(Source:M.Griffith,Wemustfixit:deliveringreformofthebuildingsectortomeettheUK’shousingandeconomicchallenges,London:InstituteforPublicPolicyResearch,2011,p.7.)
![Page 13: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/13.jpg)
Figure7.ThemodernLondonKensingtonmansion,anartist’simpression,2012.(Source:redrawnfromBenHasler’soriginalimageofaKensingtonmansion,O.Wainwright,‘Billionaires’basements:theluxurybunkersmakingholesinLondonstreets’,Guardian,9November2012.http://www.guardian.co.uk/artanddesign/2012/nov/09/billionaires-basements-london-houses-architecture)
Figure8.Proportionofresidentsreceivingcashallowancesforrentalcosts,byOECDcountry,2009.(Source:OECD,giveninA.HullandG.Cooke,‘Togetherathome:anewstrategyforhousing’,InstituteforPublicPolicyResearch,report,21June2012,p.53.
![Page 14: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/14.jpg)
http://www.ippr.org/publication/55/9279/together-at-home-a-new-strategy-for-housing)
Figure9.IncomechangesintheUK.(Source:Oxfam,Theperfectstorm:economicstagnation,therisingcostofliving,publicspendingcutsandtheimpactonUKpoverty,Oxford:Oxfam,2012.)
Figure10.MaximumweeklylocalhousingallowancepermittedafterApril2013,EnglandandWales.(Source:R.Ramesh,‘CamdenCouncilplanstomove761poorfamiliesfromLondon’,Guardian,13February2013.http://www.guardian.co.uk/uk/2013/feb/13/london-council-relocation-benefits-cap)
![Page 15: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/15.jpg)
Figure11.Three-monthonthree-monthhousingpricechange,1983–2012,UK,andtrendlines.(Source:HalifaxHousePriceIndex,allbuyers,seasonallyadjusteddata,analysisbyauthor,trendsadded.)
Figure12.ThevalueofpropertyinBritainbyurbanarea,2012,totalequity(£billion).(Source:analysisbyHometrack,areasdefinedbythe‘Stateofthecities’report,P.Collinson,‘Houseprices:guidetopropertyhotspots’,Guardian,30March2012.http://www.guardian.co.uk/money/2012/mar/30/house-prices-guide-property-hotspots#)
Figure13.RoomsperpersoninhousinginBritain,1911–2011.(Source:CentreforHousingPolicy,
![Page 16: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/16.jpg)
UniversityofYork,and2011censusdata.SeeR.Tunstall,‘Whatshouldweworryaboutwhenweworryabouthousingproblems?’,inaugurallecture,UniversityofYork,2012.http://www.york.ac.uk/chp/news/2012/inaugural/(2011censusdataaddedsincethatlecture,personalcommunication2013).)
Figure14.Numberofbuildingsover256metreshighbuiltperyear,worldwide,1930–2012.(Source:http://www.emporis.com/statistics/worlds-tallest-buildings.Analysisbyauthor.Note:graphisofbuildingsstillstandingin2013.)
Figure15.Buildingsover70metrestallconstructedinNewYork,1890–2009.(Source:redrawnfromW.N.
![Page 17: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/17.jpg)
GoetzmannandF.Newman,‘Securitizationinthe1920s’,NationalBureauofEconomicResearchWorkingPaperNo.15650,January2010.http://www.nber.org/papers/w15650)
Figure16.PrimecentralLondonpropertylocationsandnationalpreferences,2012.(Source:J.KolleweandR.Neate,‘LondonpropertyoffersstableinvestmentforwealthyEuropeans’,Guardian,1June2012.)
Figure17.MonthlyapprovalsofloanssecuredondwellingsintheUK,2007–12.(Source:BankofEngland,‘Trendsinlending:seasonallyadjustednetofcancellations’,January2013.)
![Page 18: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/18.jpg)
Figure18.Additionaldebtaddedannuallybysector,UnitedStates,1979–2012.(Source:analysisbyauthor,FederalReservespreadsheet‘D.2creditmarketborrowing’,latestfigures,January2013.)
Figure19.UnitedKingdommortgagearrearsandpossessionrates,1990–2015.(Source:BankofEngland,‘Trendsinlending:estimatesandprojections’,January2013.)
Figure20.RepossessionsandforeclosuresintheUnitedStates,2000–2011.(Source:StatisticBrain,‘Homeforeclosuresstatistics’.http://www.statisticbrain.com/home-foreclosure-statistics/RelyinginturnondatareleasedbyRealtyTrac,the
![Page 19: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/19.jpg)
FederalReserveandEquifax,15October2012.)
Figure21.WallStreetJournaldepictionofUKinflationtrends,October2011toOctober2012.(Source:J.DouglasandI.Billington,‘UniversityfeesstokeUKinflation’,WallStreetJournal,13November2012.)
Figure22.TheeffectofspendingcutsonpeopleinBritain,2010–16.(Source:Oxfam,Theperfectstorm:economicstagnation,therisingcostofliving,publicspendingcutsandtheimpactonUKpoverty,Oxford:Oxfam,2012.)
TABLES
![Page 20: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/20.jpg)
Table1.Shareofnationalincomeofthebest-offfractionsintheUK,1911–2009.(Source:D.Dorling,‘FairnessandthechangingfortunesofpeopleinBritain’,JournaloftheRoyalStatisticalSociety(A),Vol.176,No.1(2013),pp.97–128.)
Table2.Notableprivaterentalpracticesinothercountries.(Source:collatedfromnumeroussourcesin2011and2012.SeeA.HullandG.Cooke,‘Togetherathome:anewstrategyforhousing’,InstituteforPublicPolicyResearch,report,21June2012,p.53.http://www.ippr.org/publication/55/9279/together-at-home-a-new-strategy-for-housing)
![Page 21: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/21.jpg)
![Page 22: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/22.jpg)
1
Crisis
Ifpeoplehoardedfoodonthebasisthatitsvaluewassuretogoupwhenothersbegantostarveandwouldpayanything,wewouldstoptheirhoarding.Buthoardingisnowhappeningwithshelterinthemostunequalandaffluentpartsoftheworld.Increasinglyitisthefinancingofhousingthatisourbiggestproblem:themortgageorrent,thebillsandtheinequitabletaxes.Whenwetalkaboutourhousing
andwealth,ultimatelywhatwearetalkingaboutisourfreedom.Whena
![Page 23: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/23.jpg)
greatdisasterloomsinhousingso,potentially,doesadisastrouslossoffreedom.Webecomelessfreeoffearofthefuture.Webecomelessfreeinourabilitytochoosewherewelive,andlessfreethanthoseincountriesnotsufferingahousingcrisis.Lackofaccesstohousing,a
growingsenseofinsecurityoverhowwearetobehoused,islackofaccesstothefreedomtofeelsecure;itconstitutesagrowingrestrictionontherightofthemajoritytobefreetoliveagoodandsafelife.InthepastintheUKwehad
greaterfreedomoverwherewecouldlive.Fewerareasweretooexpensivetolivein,andtherewerefewerareasthatyouwoulddesperatelytrytoavoidlivingin.Farlessofourincomewasspentonhousing,and
![Page 24: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/24.jpg)
wedidnotneedtorelyonourhomestoprovideuswithfinancialsecurityinouroldage.Inthelastfiveyearsour
dependenceonhousingforoureconomicsurvivalhasbecomestarklyapparent.Ournationaleconomicwell-beingappearssotightlyentwinedwiththehousingmarketthattheChancelloroftheExchequerdevotedthemajorityofnewfinancialcommitmentsinhisMarch2013budgettomeasuresintendedtoboostthehousingmarket,tryingashardashecouldtosustainhighandrisingpricesinthesouthofEngland.AlmosteverywhereinBritain
rentsarerising,butinmanyplacesoutsideofthesouthofEnglandhousingvaluesarecontinuingtofall.
![Page 25: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/25.jpg)
Housinghasbecomeaproblemforeveryone.WhileitisanacuteprobleminEnglandasawhole,itisespeciallysointhesouth-eastandsouth-westforthosewhodonotown,whowanttorentorwhoaretryingtobuybutthenhavetopaybackhugemortgages.Housingisanationalobsessionin
theUKbecausehousingequityrepresentsasmuchas61%ofEngland’snetworth,oraround£4trillion.1Thatmayevenbeanunderestimate.Accordingtoalternativeestimates,ifWalesandScotlandareincludedandnon-mortgagedebtsecuredonhousingisexcluded,thisfigurerisesto£5.5trillion.2Theexactvalueofourhousingstockdependsuponwhenyouvalueit;whetheryousubtract
![Page 26: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/26.jpg)
thevalueofadditionalloanssecuredonproperty(i.e.loansotherthanprimarymortgages);andwhetheraccountismadeofdepreciation.But,whicheverwayyoumeasureit,61%ormoreisanastonishingproportionoftheUK’snationalwealth.Howdidhousingcometo
representsuchahugepercentageoftheUK’snetworth?Isthefactthatthemajorityofoursavingsaretiedupinourhomespreciselywhygovernmentsfeelunabletotackletheinequitiesofthehousingmarket?HowdidtheBritishcometohavesolittleintheirpensionpots,solittleintheirsavingsaccounts,suchmiserlystatepensionsandhence,formany,somuchfinancialinteresttiedupintheirhomes?Andwhatfutureisthereforallthosewhohaven’t
![Page 27: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/27.jpg)
boughtorwhoaren’tplanningtobuyhousing,fortherenters–alargeandgrowingmajorityofyoungadults–andfortheequallylargeandgrowinggroupofthosewhoareprecariouspurchasers?Thislastcategoryincludespeoplewhohavetriedtobuywithamortgagebutatsomepointhavebeenforcedtogiveupandmovebackintorentingorlivingwithfamilyorfriends;amongthemareincreasingnumbersofhoodwinked‘consumers’who,overthecourseoftheirlives,takeoutseveralmortgagesbutnevercompletepaymentsonany.Over-relianceonhousingfor
financialsecurityintheUKaccountsfortheobsessionofournewspaperswithhousing.Therearemanyexaggeratedmediaresponsestoeven
![Page 28: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/28.jpg)
thesmallestriseortheslightestdipinhouseprices.In2010thisobsessionresultedinsmalldipsinhousingpricesgeneratingheadlinessuchas‘UK“value”fallsby£94billion’.During2009theapparentfallinthevalueofBritain’shomesaccountedformostofalargedeclineinnationalwealth,adeclineequivalenttotheannualcostsofrunningtheNHS.3
Thedeclineinnationalwealthwasapparent,becausemostpotentialsellerssimplydidnottrytosellatlowerprices.Transactionsontheopenmarkethalvedintheyearsfollowing2008.Itwasalsoonlyapparentbecausethereislittleotherthanmarketconfidence,politicalintransigenceandplanningtraditionholdingpricesupatall.Hadthe
![Page 29: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/29.jpg)
journalistinvolvedconsultedanothersource,hecouldhavereportedUK‘value’fallingbyover£1trillionayearearlier!Thefallinnationalwealthofover
£1trillionwasintheyearto2008,andmostofthathugedeclinewasduetothefallingvalueofresidentialhousing.4Over£1trillionisatentimeslargercollapsethan£94billion,butformuchofthepressabignumberissimplyabignumber.Thebignumberscanalsospoilallthosestoriesaboutsmallfluctuations,concentrationonwhichaddscredencetothemyththatpricesarerelativelystableandthatwhathashappenedrecentlytotheBritishhousingandrentalmarketsisunusual,localandwillnotberepeatedorprotracted.
![Page 30: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/30.jpg)
Whenthehousingmarketstalledin2008,privatebuilderslargelystoppedbuilding.Governmentthensteppedinwithschemestotrytoboostthesupplyofnewhousing.However,by2012figuresforgovernment-assistedhome-buildingrevealedthatthenumberofwhatwerecalled‘affordablehousingstarts’for2011–12hadresultedinjust15,698propertiesbeingbuiltnationallyinanentirefinancialyear.Thisrepresenteda68%fallonthefiguresreleasedforthepreviousyear.5
Byearly2013thehousingstartsfigureshadworsenedstillfurther.ButthedropinsubsidizedbuildingbecameevidentonlyafterAndrewDilnot,theChairoftheUKStatisticsAuthority,castigatedthecoalition
![Page 31: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/31.jpg)
governmentforitsearliermisrepresentationofhousingstatisticsanddemandedthatclearerstatisticsshouldbepresented.6
Bytheendofsummer2013thesatiricalmagazinePrivateEyewasnotinghowGrantShapps,theConservativePartyChairmanandrecentMinisterofStateforHousing,appearedtobestrangelyquietaboutthepossiblebenefitsfromhousepricesonceagainrisinginthesouthofthecountry.Themagazine’swriternotedthatin2011Shappshadsuggestedthatpricestabilityshouldbetheaimofgovernmentpolicy,bywhichShappsmeantpricesrisingby2%lessthanearnings.In2012and2013,asaverage
earningsfell,nationalaveragehousingpricesrose.Shapps’s2011
![Page 32: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/32.jpg)
suggestionthatpeopleshould‘seetheirhomesasplacestoliveratherthanasinvestments’7begantoringhollow.Landlordsandtheveryrichwereinvestingagain,especiallyinthesouthofEngland.Shappshadhardlyexpandedthesocialrentedsectoratall;hardlyanyaffordablehomeshadbeenbuilt.Butthiswasn’tsomemistakeoracock-up:whenthelastfewyearswereexaminedafresh,itbecameclearjustwhohadtakenadvantageofothers,whattheyhadwantedtoachieve,andwhohadaidedthemintheirefforts.
‘GENERATIONRENT’
Thestarkdropinyoungerpeopleowningahomepresentsalong-termchallengeforallpoliticalpartiesbutespeciallytheConservatives.
![Page 33: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/33.jpg)
ResearchshowsthatprivaterentersandpeoplelivinginsocialhousingarelesslikelytovoteTory.
–NickFaith,PolicyExchange
researcher,20138
By2013ithadbecomeevidentthatwhattheUKgovernmenthadplannedwasnotanexpansionofsocialhousingconstruction.Whatithadwanted,andgot,wasamassiveexpansionoftheprivaterentedsector.Thiswasachievednotthroughnewbuilding,butthroughprivatelandlordsbuyinghomesthathadrecentlybeenvacated.Inmanypartsofthesouth-eastofEnglandprivatelandlordsnowownthemajorityofhousesonstreetsthatuntilrecentlywerehometofamilieswithmortgages.Inautumn2013thePrimeMinistercounteredcriticism
![Page 34: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/34.jpg)
ofthisveryrecenttrend,sayingthathewouldensureitbecameeasierforordinaryfamilieswhowererentingtotakeoutmassive95%mortgages,buthedidnotexplainhowtheywouldeverbeabletopaybacktheborrowedmoney.9
Thecoalitiongovernmentappearedunawareofthelong-termpoliticalimplicationsofitspolicies,notleastofhowthiswouldinfluencethewaypeoplemightinfuturevote.Governmentappearedmoreinterestedinupholdingitscoresupporters’short-termfinancialintereststhaninthinkingaboutthelongterm.Thepolicyshiftthatencouraged‘GenerationRent’togrowbecameapparentindribsanddrabsduring2012andwasthen
![Page 35: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/35.jpg)
madeformalinthebudgetofspring2013.Take,forexample,theresponseto
areportGrantShappscommissionedfromSirAdrianMontague,Chairmanofthemultinationalprivateequityandventurecapitalcompany3i,thatwaspublishedinAugust2012.10AlthoughthecoalitionhadnotofficiallyacceptedtherecommendationsofSirAdrian’sreport,itquietlyagreed–tofallinwithhisreport’srecommendations–towaiveamandatoryquotaofaffordablehomesinnewhousingdevelopments.Thatwaiving,SirAdriansuggested,‘wouldallowdeveloperstocreatemorepropertiesforlettingtoboosttheprivaterentedmarket’.Thus,althoughtheministertalkedaboutmoreaffordablesocial
![Page 36: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/36.jpg)
housingbeingmadeavailable,whatheactuallydidwastoboosttheprivaterentedmarket.Healsopromisedtotrytoreducewhathesawasthe‘excessiveregulation’onthissector–astatementthatshouldhaveresultedinmorecriticismthanitdidbecauseBritainhasoneoftheleastregulatedprivaterentedsectorsinEurope.WhenoneoftheUK’smainTV
newschannels,ITN,firstrantheAdrianMontaguestoryonitswebsite,itwastitled‘Reportoffers“blueprint”toexpandprivaterentedsector’–atitlethatwasquicklychangedto‘Demandforhomesdoublestheratehousesarebuilt’.Thewebaddressofthestorypreservestheoriginalheadline.MaybeasubeditoratITN
![Page 37: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/37.jpg)
sympathetictothegovernmentchangedtheheadline;ormaybeITNwereleanton?Wewillprobablyneverknow.Theletters‘ITN’standforIndependentTelevisionNews,butthatdoesnottellyouwhattheirnewsissupposedtobeindependentof.11
ElevenmonthsaftertheITNstoryran,eventhegovernment’scritics,includingthoseonthepoliticalfringe,appearedtoforgetthatthecoalitiononcehadaplantoboostthesocialhousingsupply.Bysummer2013thedetailsofanew‘help-to-buy’scheme–usingamassive£12billionoftaxpayers’moneytoguaranteeupto£130billion12ofnewmortgagelending–wasannounced.13InitiallyitwassettorunfromJanuary2014,and
![Page 38: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/38.jpg)
mortgagelenderswouldhavetocollectadeclarationfromanybuyerusingtheschemestatingthattheydidnotalreadyownproperty.However,eachmemberofacouplecouldeasilyfinanceapropertythroughtheschemeandthenrentoneout,transferthattoonepartnerandtheotherpartnerbuyathirdandsoonandon.Thecoalitiongovernmentsaysitisuptolenderstoensurethatsuchtransgressionsdonottakeplace,butitgavethemlittletimetoprepare.Then,attheendofSeptember2013,thePrimeMinisterbroughtforwardthestartdateof‘help-to-buy’tothefirstweekofOctober.HewantedtobeabletotellConservativePartymembersathisannualconferencespeechthatthegovernmentwasdoingallitcouldto
![Page 39: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/39.jpg)
boostthehousingmarkethigherandhigher.14TheOctober2013‘help-to-buy’schemegrewoutofanearlier‘funding-for-lending’scheme,butwasmuchlargerandfarriskier.Thegovernment’s‘funding-for-
lending’schemehadbeenaimedatbusinessenterpriseingeneral,butendedupfuellingabuyingspreebylandlords.Ithelpedgrow‘GenerationRent’.Whenitwasintroduced,fewrealizedwhothemoneywasmostlygoingto,butscepticswerewarnedbyitsintroductiontolookmorecarefullyatfutureschemes.Theproposed£12billion‘help-to-
buy’schemehitstonygroundwhenannounced,andmanythoughtitwouldnotmakeits2014implementation.Ithadvocalcritics
![Page 40: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/40.jpg)
rangingfromtheInternationalMonetaryFundtotheOfficeforBudgetResponsibilityandeventheBankofEngland.Thecriticismwasthatthisschemewouldnotreallyhelprentersbecomebuyers.Insteaditwouldsimplyleadtopricesgoinghigherandhigher,asafewmorepeopleboughtusingmassiveloans,manyofwhomwouldsoonrentoutthesepropertiesandchargethemortgageplusaprofittonewrenters.Criticismfromsuchheavyweightscouldnotbeignoredbythemainstreammedia,butitwasatfirstonlygrudginglyreported,evenwhentheheadofstrategyatthebankSociétéGénéraledescribedthepolicyasbeing‘moronic’.15ButeventhatdidnotstopthefirstphasestartinginApril2013,orthe
![Page 41: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/41.jpg)
bringingforwardtoOctober2013ofthesupposedmain2014‘help-to-buy’initiatives.When‘help-to-buy’beganinApril
2013ithadbeentargetedsolelyatnew-buildpropertybuyers.Italloweduptoafifthofthemortgagesofbuyersofnew-buildpropertiestobeprovidedbygovernment,thusensuringthatgovernment,andhencewecollectively,wouldtakethefirsthitwerethepriceofnew-buildhousingtofall.Bankswerethenwillingtolendmortgageswhenjusta5%depositwasputdown,safeintheknowledgethattheywouldnotloseoutevenifpricesfellby25%:thegovernment(i.e.allofus)wouldpayupinstead.Thatthesegovernmentloansareinterest-freeforthefirst
![Page 42: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/42.jpg)
fiveyearsaddstothecollectivehittakenbytaxpayers.Whenbuyersareletoffpayinginterest,everyoneelseispayingtohelpprivatehome-builderssellhousesathigherpricesthanthemarketsaystheyareworth;thesubsidies,ineffect,arecausingpeopletobuytheirhomesatinflatedprices.Ifhousingpricesthendofall,
governmentspendingwillhavetorisetocoversomeoftheverylargemortgagedefaults.Theonesavinggraceoftheoriginalpolicyisthat,intheory,itshouldhaveencouragednewhouse-building,whichcanbeusefulwheremorehomesareneeded,butdoesnothelpinotherareasofthecountry.Furthermore,givencurrenttrends,manyofthehomesbeingbuiltarelikelytoend
![Page 43: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/43.jpg)
upinlandlords’handsoncetheyaresold,aspreviouslymentioned,sowhatpurportstobea‘help-to-buy’schememaywellendupbeingnosuchthing.ManypeoplemayfindthattheApril2013schemewillhelpthemtobuyanew-buildpropertyandtoliveinitforashorttime.But,ifanyofthefollowinghappenstothebuyerortheirpartner,theymaybeforcedtosell:losingtheirjob;beingdemoted;salariesfallingbehindinflation;becomingill;splittingup;orsufferingariseininterestrates.Moreoftenthannottheywillbesellingatalosstoalandlord.What,though,ofthesecondstage
ofGeorgeOsborne’spolicy:theextensionoftheguaranteetolargepartsofallmortgagestakenouton
![Page 44: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/44.jpg)
propertyvaluedupto£600,000?Thiswasplannedtobethegreateststateinterventionintheprivatepropertymarketeverundertaken.TheformerGovernoroftheBankofEngland,LordKing,hassaidtheschemeis‘toocloseforcomforttoageneralschemetoguaranteeallmortgages’.16Thesecondstagenowappliestoallexistingdwellingsvaluedupto£600,000,notjustnew-build.Itsaimisobvious:simplytoholdupandpossiblyfurtherincreaseprices;itisnotdesignedtoboostsupply.17Holdinguphousingpricesalsoallowsrentstoremainhigh.Thepolicymayevendampendemandfornewlybuiltproperties,asnowthegovernmentwillsubsidizeyouwhenyoubuyanyolderproperty.Whyriskbuyinganoftenmoreexpensive
![Page 45: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/45.jpg)
newlybuiltpropertywhosevaluehasnotyetbeendeterminedbythemarket?Ifthereistobeasurgeinnew
home-buildinginBritainintheyearstocome,itwillmostlybebuildingonbehalfoftheprivatebuyingandprivaterentalmarket,whilemuchmorepublicsectormoneywillflowtoboththelandlordsandthebanks,andhugesumswillbemadeavailableforunderwritingmanyoftheirrisksintheeventofanyfallinprices.Theprofitswillbeprivatizedandtheriskswillbenationalized,atrendthatbeganunderNewLabourandisacceleratingundercoalitionrule.HousingintheUKhasbecomeso
unstablethatgovernmentnowfeelsithastopropuptheprivatemarket
![Page 46: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/46.jpg)
withthesemassivesubsidiestogivetheimpressionofstability.However,thereisagrowingrealizationthatthisisapolicyonlyfortheshortterm,onethatcouldworkupuntilthenextgeneralelection,butthatmightnotworkoncepeoplerecognizehowmuchthehousingmarketisbeingmanipulated.Ifnewpotentialbuyersbegintogetcoldfeet,ifpeopletrytoliveatparents’orfriends’homesevenlongerthantheycurrentlydobeforetheyrent,ifconfidencebeginstoquiver–whatthen?PlanAisforgovernmenttoboosttheprivatemarketsothathousevaluesriseandriseasaverageincomesfall,withtheresultthatdebtgrowstoo.ThecoalitionhasnoPlanB.Whenhousescosttoomuchfor
![Page 47: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/47.jpg)
mostpeopletobuy,moreandmorehavetorent.Alreadyundermanyexisting
coalitiongovernmentschemesmoretaxpayers’moneythaneverbeforeisbeingusedtounderwritelandlords’riskswhentheybuynewpropertytorent.From2012,£10billioninloanguaranteeshasbeenonoffertotheselandlordsbygovernment.InOctober2012thethennewHousingMinister,MarkPrisk,announced,‘We'reoffering£10billioninloanguaranteestoprovideupto15,000newhomesforrent,putting£19.5billioninpublicandprivatefundingintoanaffordablehomesprogramme.’18Markwasshuffledoutofthehousingjobayearlater,inOctober2013.NoMPeverseemstostayforlongasHousingMinister;
![Page 48: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/48.jpg)
and,perhapsforthisreason,evenmoremoneythanthat,andmuchmorethaneverbefore,alsoflowsinlandlords’directionfromanotherpot:thehousingbenefitbill,whichhasrisenmassivelysince2009.Thehousingbenefitbillrises
becauseeverincreasingnumbersofhouseholdscannotaffordtheirrisingrentcosts.Oftheriseinclaimssince2009,85%hasbeenfromhouseholdswhereatleastonememberisinwork.19Theoriginalexpansionofhousingbenefitpaymentsgoingtoprivatelandlords,which,by1989,hadrisento£5billionayear,hasrecentlybeendescribedas‘Brilliantlyevilinretrospect’.20Thatsamegovernmentsubsidyforlandlords,butfortheperiod2012–14,hasnowrisento£35billion.This
![Page 49: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/49.jpg)
hugebillrosebymorethanathirdsincethecoalitiontookpower.21
And,asmoreandmorepeopleareforcedtorent,itwillcontinuetorise,evenasthegovernmentinsiststhebillwillbereduced.Theseareallmoniesthatgodirectlytolandlords.The£35billionhousingbenefit
billthatkeepsrentshighbyactuallypayingthosehighrents;the£10billionunderwriteofthefuturerisksoflargeprivatelandlordswhoarecurrentlybuildingnewhousingtorentoutatgreatprofit;theOctober2013extra‘help-to-buy’underwriteofthelending‘risk’ofbanksandothermortgagelenderstothetuneof£12billion–factorinallofthese,andyoubegintoseeastaggeringamountofgovernmentmoneygoingintothehandsofsomeoftherichest
![Page 50: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/50.jpg)
‘players’intheprivatehousingmarket.Allthiskeepsrentsandpriceshigh.Allthisputsmoreandmorepeopleintoevergreaterdebt.Governmentmaysaythattheir
massivecurrentunderwritingofriskwillprobablyneverhavetoberealized,butthatwillhappenonlyifhousingremainsprohibitivelyexpensive–soexpensive,infact,thatmostpeoplewillfinditincreasinglydifficulttoworkoutjusthowtogethoused,withouthavingtoexposethemselvestolevelsofdebttheirparentswouldneverhavebelievedpossible,letalonecountenanced,orwithouthavingtorelyonthestatetopayatleastpartoftheirrent.Thecoalitiongovernmentin
Britainpresentsstatesupportforthe
![Page 51: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/51.jpg)
privaterentingandbuyingsectorsasanalternativetobuildingmoresocialhousing.Thesuggestionisthattheprivatesectorisbetteratbuildingandmanaginghomesthanthestate,andalsobetterthancharitiessuchashousingassociations;itisjustthattheprivatesectorneedsalittleencouragement.ButwhatiftheunderlyingproblemofhousinginBritainisnottoofewhomes,buttoomanyhomestoopoorlysharedout?Andfartoomanyhomespricedfartoohighly?Expandingtheprivatesectortendsnottoreduceinequalitiesinprovision.ItcouldresultinmoresecondhomesbeingbuiltinandaroundLondon,notmorefirsthomesforpeoplecurrentlylivingincrowdedconditions,those
![Page 52: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/52.jpg)
livingwithotherfamilies,unabletogetsomespace.TherentalsectorinBritainisnot
aslargeasinmanyotherEuropeancountries,andagoodcasecanbemadeforexpandingit.Buttheunregulatedrapidexpansionwehaveseeninrecentyearswillresultinevergreaterprofitsforlandlordsandevergreaterprecariousnessfortenants.Intheyearto2013medianrentsinLondonroseby9%,whilemedianLondonearningsrosebyonly2%;andthetypicalyoungrenterhasbeenforcedtomoveout(onaverage)everytwelvemonthsbyhisorherlandlordtoenablethatlandlordtofindanewtenanttopaythehigherrent.22
Thenew-buildsforrentarechieflydesignedforpoorerpeople,forthose
![Page 53: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/53.jpg)
whocannotaffordthehighestorevenaveragerents.Butwehavelearnedfromexperiencethatservicesdesignedforpoorpeopletendtobepoorservices.OneinthreeprivatelyrentedhomesinEnglandtodayisstillnotcurrentlyuptothegovernment’s‘decent’standard.Complaintsagainstlandlordsroseby27%inthethreeyearstoJuly2012,manyofwhichconcernedlandlordsallowinghazardsthatposedanimminentrisktothehealthoftenants.23
Servicesinitiallydesignedforawiderangeofpeoplethatlaterbecomeservicesforpoorpeoplealmostalwaysbecomepoorerservices.ThisiswhathappenedtoBritishcouncilhousing,asitwasresidualized,anditcouldbewhatis
![Page 54: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/54.jpg)
happeningtotheprivaterentalsectornow.Servicesremaingoodservicesorimprovewhenthoseusingthemhaveclout,andespeciallywhentheyhaveachoiceoverwhethertousethemornot.WhenrentsareashighastheyareinBritaintoday,mostpeoplewhorentsimplyhavetochoosetheleastbadhometheyareoffered.Manylandlordsarenowreapinggreatprofitsbecausetheydevoteonlyatinyproportionoftherentmoneytomakingthesepropertiesgoodhomesinwhichtolive.Tenantssimplydon’thavethepowertoshoparoundandrejectwhat’snotgoodenough.AndBritishlandlordsknowthis.InmainlandEuropemuchofthe
privaterentalsectorworkssomuchbetterthanintheUK.Thisisnot
![Page 55: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/55.jpg)
onlybecauseitisalargersectorthatspansmostoftheContinentalmainland,butalsobecauseitismaintainedtosupportafarwiderrangeoftenantsintermsofsocialbackgroundandage.Asaresult,governmentscontrolrentsandpreserverights.Rentedhomesarefarbetterinsulatedandsoundproofed,andalsotend,onaverage,tobelarger.WhentheprivatesectorinEuropeworkswellitisusuallybecauseofgoodgovernmentcontrol.Afterall,the‘market’wasoriginallyaplacewherelocalgovernmentcontrolledwhereandhowgoodscouldbetraded.Withoutthatcontrol,profitmaximizationinhousingleadstogrowinginefficiency.Satisfyingshort-termgoalsbyhikingpricesupleadstolong-termtrouble.
![Page 56: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/56.jpg)
Whenitcomestoprivatesectorhouse-building,DavidRichie,theChiefExecutiveofBovis,oneofthelargestbuildingfirmsinBritain,explainsthat,followingwhathecallsthe‘severeslowdowninthenorthernhalfofthecountry’,itbecame‘financiallysafer’fordevelopers‘tobuildbelowalinedrawnfromCheltenhaminthewesttoCambridgeintheeast’.24Theprivatemarketwillalwaysgravitatetowhereverthemostmoneyistobemadeandwillact,build,buyandsellwhenandwhereverprofitcanbemaximized,nothingmore,andnothingless.Itdoesnotmaximizehappinessorutilitywhenlefttoitsowndevices.Itdoesnottrytobestarrangeourtransporttowork,nortoensurethatwepolluteaslittleas
![Page 57: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/57.jpg)
possibleaswecommute.Itworksonlytosatisfyeachplayer’simmediatedesires,or,atmost,thedesiresofapairofplayers,abuyerandaseller.Inequalitiesareexacerbatedbythe
factthatafewpeoplehavefarbetterknowledgeofmarketsthanthemajority.Individualscanneverbecomeexperiencedconsumersofhousingunlesstheyhaveaterriblyunsettledlife,movingsooftenthattheybecomefamiliarwithawiderangeoftenures,mortgageoffersandlandlords,andsogettoknowwhenandwherethe‘bestdeals’comeup.Anylifelivedwithsuchanobsessionoverhousingisunlikelytobeespeciallyfulfilled.Governmentcan,andshould,actonbehalfofallofus,sothateachofusneednotbecomea
![Page 58: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/58.jpg)
housingexpert.Butsometimesgovernmentactsmoreintheinterestsoflandlordsandbanksthanintheinterestsofmosthouseholdsandmostpeople.Itisnotnecessaryfora
governmenttobeMachiavellianforitsactionstoresultinalmostallvoters’personaleconomicpositionsbeingharmed.Itsimplyrequiresenoughmembersofparliamenttobelievethatwhatisbestforafewlandlords(andforevenfewerbankers)isbestforusall.Evenifthatconditionisnotmet,andmanypoliticianshavetheirdoubtsoverbankers,ifenoughbelievethatitisessentialthathousingprices(andhencealsorents)stayhigh,theresultswillbemuchthesame.They
![Page 59: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/59.jpg)
maynotbeincahootswiththefinanciersbuttheymayaswellbe.
![Page 60: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/60.jpg)
![Page 61: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/61.jpg)
Therewerenostructuralproblemswiththesehouses,whicharecurrentlyboardedup.Theywereoncesoliddwellings,butarenowinthewrongcityand,evenmoreimportantly,inthe
wrongpartofthatcity.Thebuildingsshownhereareallthatremains,in2013,ofover130housesthatwerethesubjectsofcompulsorypurchase
ordersin2008.Therestweredemolished,andallbutthishalf-dozenarenownothingbutair.Theyweredemolishedbecausetheycametobeseenas
beinginthewrongplaceatthewrongtime,locatedinthepoorenclaveofFirVale,inSheffield.Theywerebuiltwhendifferent
industriesdominated.Hadthesesamehousesbeenbuiltelsewhere,itislikelythattheywouldhavebeenlovinglyrenovated.Inotherplaceswherethereisonceagainageinghousingthatisn’tbeinglookedafter,manyofthosehomescouldsufferasimilarfatetothese,shouldthemarketcrashagain,regardlessofhowmany
peoplebadlyneedhousing.
Government,andmanyinthepolicyworld,inthemediaandinacademia,maybelievethatactiontosupportandeventoincreasehighhousingpricesisessential,atleast
![Page 62: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/62.jpg)
forthecoalitiontobevotedintoofficeinfuture.Thismayaccountfortheresistanceencounteredbythosewhomakesuggestionsforrealchange,aswellastherecentseriesofdesperatepoliciesofsubsidyandunderwritinginanefforttodelaytheinevitablereadjustment.Housingisofgreaterpolitical
consequencethanmostotherareasofgovernmentpolicy.It’sasnearasmostpeoplepersonallygettowhatiscalledthegreatereconomy.Employmentcomesaclosesecondtohousing,butmostpensioners,childrenandmanyothersarenotemployed,whereaseveryoneisdirectlyaffectedbyhousing,allofthetime.Conversely,manypeople,especiallythosewithoutyoungchildren,maynotcaremuchabout
![Page 63: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/63.jpg)
whatishappeningtoeducation,andthosewhoarewellcaneasilypaylessattentiontochangestoourhealthservices.Mostpeoplearenotaffectedby
thelevelatwhichbenefitpaymentsareset,orbyhowtheminimumwageisdetermined.Cutbenefits,andcrimemayrise,butfewmakesuchlinksandoftenthosethatdosimplydemandmoreprisons.(PrisonshavebeentheonlyformofstatehousingthathasexpandedinrecentdecadesintheUK,butitisalsoaforminwhichratesofovercrowdingarerisingfasttoo,asmanycellsdesignedforonepersontosleepin,anduseatoilet,nowhousetwoorthree.)Thosewhoaremostadverselyaffectedbyhousingpolicybelieve
![Page 64: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/64.jpg)
theyhavelittlepowertoalterpolitics.Andusuallytheyareright.Theyaretheleastpowerfulintheareaswheretheylive,sopoliticianscanreducesocialsecurityspendingonthepoorestwithoutlosingmuchpopularsupport.Politicianscanincreaseovercrowdinginprisons,insocialhousingandinmuchprivaterentinghousing;and,intheshortterm,theycangetawaywithit.However,astheirhousingpoliciesbegintoimpactonagreaterandgreatershareofthepopulation,andonthelargemajorityofyoungadults,itbecomeshardertosustainsuchpolicies.Butitalsobecomeshardertoendthem.Aparticularconstituencyhasbecomereliantonpricesremaininghighandrising.
![Page 65: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/65.jpg)
Policyonhousingisdifferentfrompolicyonemployment,crime,defence,healthoreducation.Policyonhousingtoucheseveryone.Forexample,makerentinglessproblematicandyoureducetheincentivetobuy,sopoliciesthathelptenantsmightbeseentoharmtheinterestsofthosewhoownoutrightandaretryingtosellatahighprice.Weallneedahometogoto,
whetherweareofschoolageorofpensionableage,ingoodhealthorpoor,notpaid,badlypaidorwellpaid.Whenourhousingfeelsinsecure,wefeelinsecure.Thatinsecuritycanrangefromfeelingalittlebitlesswealthy,asatsomepointinthenearfuturethevalueofyourNottingHilltownhouse(oncesubdividedintoflats)falls,to
![Page 66: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/66.jpg)
despairingaboutbeingforciblyrelocatedawayfromwhereyougrewupbecausethereisapparentlynolongeranyspaceforyouinNewham.Clearly,losingalittlewealthisfarlessofanissuethanhavingtoleaveyourhometownorborough,butthewealthymansionownermightbehappiertoseeyougoratherthanloseafractionofhisequity.Ifequalityweretogrow,hemighteventuallyhavetosubdividehispropertyagain,sothattherewouldbesomespaceforpeoplelikeyoutostayinpartofthatbuilding.Heknowsithappenedbefore.IftheforcesofConservatismdon’ttriumph,itcouldhappenagain.Manyofusworrythattheremay
notbeenoughhomestogoround.Weworrythatwecouldeasilybe
![Page 67: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/67.jpg)
evictedwerewetobelatewiththerentormortgagepayment.Ifwearehomeowners,weworrythatthehomeweownoutrighthasamonetaryvaluethatisassolidasquicksandandthatthefuturewethoughtwassecurewillturnouttohavebeenapipedream.Fewpeoplefindreassurancethroughthewaysinwhichwehavecometoorganizehowwearehoused.Ofthosethathavewonoutinthe
housinglottery–unlesstheyhavenochildren,norelativesandcarefornofriendswhoareinsituationssomewhatdifferentfromtheirown–theytooshouldstillhaveworries.Ifwecarryonasweare,howwillsocietybeabletofunctioninawaythatallowspeopletorespecteach
![Page 68: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/68.jpg)
other?Howwillallourchildrenbehoused?Howbigwilltheirdebtsbe?Housinghasbecomethedefining
economicissueofourtimesbecausehousingfinanceisattheheartofthecurrenteconomiccrisis.Somanyofusputsomuchmoneyandfaithintotheselittleindividualizedpocketsofrisk,atleastatonepointinourlives,thatwecaneasilybecomemoreconcernedaboutourhomeandneighbourhoodthanthewiderpicture.Whenweconcentrateourworry
onourhousing,weworrylessaboutthewidereconomybecomingdysfunctional.Worryabouthousingdistractsusfromthedisasterofmillionsofyoungadultshavingnowork,ofincomeinequalitiesrisingrelentlessly.Weworryaboutour
![Page 69: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/69.jpg)
individualpropertyvalueorrentlevel;aboutpayingthemortgageeachmonth;aboutwhethertheprofitonoursalewillpaythenursinghomefees;oraboutwhywefailedtotrymuchhardertobuywhenwewereyounger.Ifhousingpricesarerisingand
youhaveboughtahome,noneoftheothertrendsappeartomatterthatmuch,becauseyou,andyourfamily,aredoingallright,evenifsocietyasawholeappearstobeinmoreofamessthanitwaswhenpeopledidnotoverwhelminglyprofitfromtherisingvalueoftheirbricksandmortarratherthanfromtheirlabour.
DISASTERCAPITALISM
Thereistheriskofaproperty-drivenboomintheUK…
![Page 70: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/70.jpg)
–AntonyJenkins,ChiefExecutiveOfficer,
BarclaysBank,201325
Ourpersonalhousingexperiencesbothencapsulateandengendertheparticularkindofcapitalismthatwearecurrentlylivingthrough:DisasterCapitalism.Thatiswhatoccurswhenpeopleareallowedtoprofitoutofacrisis.ThetermwasfirstwidelyusedtodescribehowgreatprofitsweremadeintheaftermathofhurricaneKatrinahittingtheLouisianacoastlineoftheUnitedStatesin2005anddecimatingNewOrleans.26
IntheUnitedKingdomthebanksandlargerlandlordsarenowmakinghugeprofitsfromthehousingcrisis.Manyoftheirrisksarebeingcoveredbythetaxpayerthroughthenew
![Page 71: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/71.jpg)
underwritingschemes.Furthermore,inboththeUKandtheUS,governmentcurrentlylendstobanks(ineffect,totheirshareholders)atnear-zerointerestrates,whilebanksstilllendtousatmuchhigherratesandverymuchhigherratesforthosedeemedtobemoreofarisk.Foreveryhiddensubsidytothe
richthatyoudiscover,thereappearstolurkbehinditanevengreatersumofmoneythatisbeinglent,riskedorraisedtotrytomaintainthecrookedstateofourhousingsystem.Afterall,itwasthehousingsubprimefinancialcrisisthattriggeredthetrillionsofpoundsanddollarsnowspenton‘quantitativeeasing’.Andwhatisitexactlythatthishugequantityofmoneyissupposedtoease?Everythingappearstobebeing
![Page 72: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/72.jpg)
donetorestorethingstohowtheywere,tomaintainthegrossinequalities,topreventasubstantialreadjustment.Youmightthinkthissituationwill
notchange,butithasnotalwaysbeenlikethis.Todaythepoorlyandinsecurelyhousedarenotagroupthatcanbesidelined.Thisispartlybecausethehousingprecariathavebecomesuchalargegroup.27ThisbookfocusesontheUKhousingmarket,buttheUKisnottheonlysetofnationswheresomuchhasbeeninvested,bothfinanciallyandemotionally,inhousing.Acrossmuchoftherichworld,levelsofconfidenceinourindividualeconomiesare,toagreaterorlesserextent,nowmorereliantonthehousingmarketthantheyhaveever
![Page 73: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/73.jpg)
been.Thisisnotsafe.Tryingtoreturntobusinessasusualfollowingthe2008crash,torelyingsogreatlyonhousingasafinancialstoreofwealth,isapolicythatwillexposeustoyetmoreinsecurityinthefuture.Whenthehousingmarketappears
buoyant,peoplespendmoreandtheeconomydoesbetteringeneral.Demandrises,notjustforgoodsrelatedtohousing,notjustforsalesofcarpetsandcurtains,butforholidaysandcinematrips.Itwouldbebetterifwemostlyreplacedcarpetsandcurtainsonlywhentheywerewornout,ifthecinemaswerecheaper,andifagoodholidaywasnotnecessarilyanexpensiveone.However,giventhecurrentwayinwhicheconomicgrowthismeasured,themorethatisspent,andthemore
![Page 74: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/74.jpg)
frequentlyitisspent,andthequickerwethrowpossessionsawayandreplacethem,thebetteroffweareallsaidtobe.Lookingatthefinancialcrisis
throughtheprismofhousingleadsustothenubofwhat’sgonewrong.Andtowhatwillberequiredtomakeusbothbe,andfeel,moresecureagain.Neithershow-homesnorinsecurehomesmakeushappy.Weneedtoknowthatwearelivingonsolidground,thatourhomesaresafe.Weshouldnothavetolivewiththeperceivedneedtopresentourhometootherskittedoutlikeanewlyrefurbishedhotel.Weneedtoorganizehowwearehoused,sothatweneitherhavetofearforourbasicshelter,norbehaveasifthefabricofourhomesreflectedourstatusand
![Page 75: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/75.jpg)
achievements.Currentlytoomanypeoplearetoopoorlyhousedandarichsubsetaretooexpensivelyhoused,overprovidedforattheexpenseofthemajority.Fundamentallyitisthelinkingof
housingtosocialstatusthatallowspricesandrentstobeincreasedbeyondwhatthecostofprovidingthedwellingmightbe,orbeyondwhatthevalueofthelandmightbeifitwereturnedtootherpurposes.ItwasKarlMarxandFriedrichEngelswhofirstwroteofhowahousecouldbemadetoappeartobeahovel,shouldamansionbebuiltnexttoit.ItwastheeconomistRobertH.Frankwhocametonoticethisoccurringagainover150yearslater,butinthecontemporaryUSratherthaninnineteenth-centuryEurope
![Page 76: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/76.jpg)
(whereKarlandFriedrichfirstmadetheobservation).Toillustratetheissueofstatus,Frankincludedthefloor-planreproducedbelow,waybackin2001,toshowwhatwashappeningintheUSatthattime.Tounderstandthepointbeingmade,youneedtolookatthisfloor-planandthispictureofahouse,andthinkhowniceitwouldbetolivethere.Butpleaselookcarefully,andalsothinkaboutwhetheryoureallywouldneedathree-cargaragethathasbothwindowsandcurtains.Thisbookismainlyconcerned
withtheUKhousingmarket,buteventsoverseasbothdrivewhatoccursinBritainandalsoofferaportentforwhatmaysoonoccurhere.Inparticular,whathashappenedrecentlyintheUKbegan
![Page 77: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/77.jpg)
tohappenearlierintheUS.PeopleatthetopintheUSbegantowantmore,muchmore,thantheyhad,andtheyfoundwaystotakeit.
![Page 78: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/78.jpg)
Figure1.Dreamhome:6,000-square-foothouse,frontelevationsandfloorplans,United
States,2001.
Better-offindividualsintheUSrecentlybecamemuchbetteroff.Thetop1%nowtakeshomeafifthofallnationalincome,leavingjust80%fortheother99%.Toenvisagewhatthismeans,imaginegoingtoaschoolthatserves100childreninthreeclasses(or33,33and34childrenineach).Inoneofthoseclassesisasinglechildwhoreceives$20adayinpocketmoney.Theother99childrenintheschooleach,
![Page 79: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/79.jpg)
onaverage,receivetheequivalentof80¢adayinpocketmoney,butnotevenly.Otherchildrenintherichboy’s
class,whichhappenstobetheclassof34children,receive,onaverage,$2aday.Inthenextclassaveragepocketmoneyisjust50¢aday.Butinthethirdclassitisalmostnothing.ThatishowunequaltheUShasbecomeintermsofincomeinequality,andthatgrowinginequalityinabilitytobuyhashadconsequencesaboutwhatpeoplesubsequentlywant.Everybody,understandably,wants
morewhentheyeachhavesolittleincomparisonwiththeirpeers.Thosewhohavealmostnothingwantmore;thosewhohavejust50¢wouldmuchprefer$2andcannotseewhatis
![Page 80: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/80.jpg)
unreasonableaboutthat;andthosewhoreceive$2knowthisisonlyatenthofwhattherichestboyintheclasshas,sotheytoocanfeelpoor.Butitistherichboywhoismostisolated,whocannotseetheotherchildrenashispeers;theyarenot,ineffect,hispeers,soevenhedoesnothaveallhemightwant.AstherichintheUSbegantotake
agreaterandgreatersliceoftheAmericanpie,theyneedednewwaystoshowhowsuccessfultheywere.OneoptionwastopurchaseAmerican‘dreamhomes’.Thepictureandfloorplanoppositeshowsasmallversionofoneofthese,perhapsbuiltforsomeonewhohadonlyjustmadeitintothetop1%ofUSsocietyintheearly2000s.Itmaylooktoyoulikealargehome,
![Page 81: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/81.jpg)
butthen(ifitdoes)youareprobablylikethosechildrenwhohave‘only’$2adaypocketmoneyeach:achildinthetopclassoutofthree,butnotintherichesthalfofthatclass.Whatdoyouknow?Itiseasytobeonabove-averageearnings(orpocketmoney)andfeelpoorwheninequalityissohighandpeoplearesosegregatedintheireducation,intheiremploymentorintheirresidentialneighbourhoods.IntheUKthetop1%donotyet
takehomeasmuchasafifthofallnationalincome,buttheirshareiscurrentlyrising.ThepictureandfloorplanabovemayappearevenmoreostentatioustoaUKreadership,asthereislesslandtobuildonintheUK,butifinequalitieswithintheUKcontinuetogrowthis
![Page 82: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/82.jpg)
couldbecomeanexampleofanexpensivehomethatmoreoftheaffluentintheUKwillsoondesiretoonedayown,onethatsofewdoownnow.Whatmattersaboutthefloorplaniswhereitfirstappearedinprint.Thisisbecauseitspublicationillustratesthatalltheproblemsofhousingthathavebeendiscussedsofarinthisbookarewellknowntotheeliteandhavebeenunderstoodintheircirclesforsometime.Italsosuggeststhatjustbecausetheyarewellknowndoesnotmeantheyaremanageable.Theimageofadreamhomeand
floorplanistakenfromabookpublishedin2007,whichwasitselfbasedonanacademiclecturegivenin2001.28InthelecturetheUSeconomistRobertH.Frank
![Page 83: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/83.jpg)
explainedhowafewpeoplewantingmoreandmoreendedupmakingeveryoneelselesshappy.Slowly,andatfirstmostclearlyfromtheexamplesetbytheUnitedStatesofAmerica,wearelearningthatdisasterunfoldsifyoufailtocurtailtheexcessesoftherich,ifyoufailtoregulatehousing,andifyoufailtoseeshelterasaright,notsomethingtobesoldfreelyandboughtbythehighestbiddertothedetrimentofthemajority.Atacertainageeverychildneedsalittlepocketmoney,butnochildneeds$20aday,especiallyif,likespaceforhousing,thatmoneyiscomingoutofafixedpot.RobertFrankisco-authorwith
BenBernankeofaseriesofmainstreameconomictextbookspublishedintheUS.Bernankewas
![Page 84: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/84.jpg)
untilveryrecentlytheChairmanoftheUSFederalReserve,aposthehadheldsince2006,beforethecrash.ThoseintheeliteatthetopofUSsocietyknewtheyhadabubblelongbeforeitburst;theyjustdidn’tknowhowtodealwithit.Theyalsoknewtheyhadasevereproblemwithrisingeconomicinequalities.Buttheydidnotknowhowtoreducethem,oratleasthowtodosoinawaythattheycouldpresentasacceptableintheUSpoliticalclimateofthetime.ThoseatthetopofUKsociety
knewoftheproblemsrisinginequalitybringsalmostaswell.They’dhearditfromthehorse’smouth.InSeptember2006FrankexplainedallthisataseminarheldwithinNo.11DowningStreet,then
![Page 85: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/85.jpg)
theofficeofGordonBrown,ChancelloroftheExchequer.Theslidesheshowedcanstillbeviewedontheweb.29TheyoungmenandwomenoftheTreasurywhowerelisteningfoundittobeaveryimpressivelecture.Theyknewgrowinginequalityinhousingwasbad,buttheyjustdidn’tknowwhattodoaboutit.
RECENTINEQUALITY
IfyouwanttheAmericanDream,gotoFinland.
–EdMiliband,201230
TheUnitedStatesisoneofthefewcountriesintherichworldwhereinequalitiesinincomebetweenhouseholdsareevengreaterthanthosefoundwithintheUK.Thebest-
![Page 86: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/86.jpg)
offtenthofhouseholdsintheUSreceiveeachyear,onaverage,15.9timesasmuchtoliveonastheworst-offtenth.IntheUKthatratiois13.8to1;intheNetherlandsitis9.2to1;inDenmark8.1to1;inGermany6.9to1;andinFinland5.6to1.31AstheincomesofthoseatthetopinboththeUKandUSroseinrecentdecades,housingpricesandrentsatthetoprosetoo,butthoseincreasesdraggedthepricesandrentsofslightlycheaperpropertiesup–especiallycheaperpropertynearthemostexpensivehousing.Therisesinhousingpricesrippledout,and,althoughtherewaslessofahikelowerdownthehierarchy,therisewasalwayshigher,proportionately,thanthesalaryandwageincreasesreceivedbythepeoplefurtherdown.
![Page 87: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/87.jpg)
Foratimethiscontinuedregardlessofthefactthatlesswell-offpeoplesoonsimplydidn’thavethemoneytopayfortheirhousing.Everyonejusthadtobeotherwisepoorer,oftengettingintogreaterdebt,tokeepup.IntheUK,forthepoor,thestatestumpedupmoreandmoreofthegrowingbill.IntheUS,trailerparksgrewlargerandmultiplied.Eventuallythegapbetween
housingcostsandearningsbecametoogreatformanypeopleinthemiddleoftheincomedistributionintheUS.Itwasnotsurprisingthatthehousingcrisisbeganthere.Itwas,andremains,themosteconomicallyunequalofrichcountries.Peoplehadbeentemptedintobuyingonthepretextthatifpricescarriedonbeingpulledup,theywouldbeforcedto
![Page 88: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/88.jpg)
rentfortherestoftheirlivesiftheydidnotbuynow.Ifyoucansympathizewithsuchfears,thatmayhaveasmuchtodowithyourownhousinghistoryandwhatyouhaveexperienced,aswithyourgenerallevelsofempathy.Poorerfamiliesintheearly
noughtiesintheUSwereofferedmortgagesatinterestratesthatstartedcheapbutlaterrose–thoughwhatrealchoicedidtheyhave?Incontrast,inthosecountriesthataremoreequitable,rentingisconsideredtobeanacceptableoptionforpeoplehigherupthescaleandtheirrents,aswellaseveryoneelse’s,arelower.Therearealso,bydefinition,fewerpoorerhouseholdsinmoreequitablecountries,andthericharelessrich.
![Page 89: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/89.jpg)
Acrossmostofthemoreequitablerichcountriesoftheworld,housingpricesarenotinflatingawayatthetop,becauseincomesarenotsoaringatthetop.Moresensibledecisionsoverwheretolivearepossibleinplacesotherthanthemostexpensivepartsoftheworld’sinequitablerichcountries.Incontrast,withintherichworld,insocietiessuchasthosefoundintheUSandtheUK,growinginequalitiesarehavinganincreasinginfluenceonbothresidentiallocationdecisionsandhousingprices.Forexample,itbecomesmoreandmoreimportanttoliveinagoodareaifyouwanttogetyourchildrenintoagoodschool.Thisisbecausewheneconomicallymixedneighbourhoodsbecomerarer,itishardertofindschoolswitha
![Page 90: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/90.jpg)
mixedsocialintake.Growingincomeinequalities
allowpeopletosegregatemorethroughtheirhousingchoices,but,whenthishappens,choosingwheretolivebecomeslessofachoiceandmoreofaburden.Whereyouwanttolivealwaysseemsjustoutofreach.Everyonecanendupfeelingpoorerwhenafewgetricher,includingmanyofthosewhomateriallyappeartohavemuchmorethanothersaroundthem.Therearemanyeffectsofrising
incomeinequalitiesonhousingdecisions.Unequalincomesnecessarilyfuelthegrowthofbubblesinthehousingmarket,becauseindividuallyitmakessensetospendasmuchasyoucanonahomewheninequalitiesaregrowing.
![Page 91: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/91.jpg)
Peopleworryaboutnotgettingontheladderandborrowwhatevertheycantoleapontoit.Asaresultpoorerareasbecomerelativelyevenpooreragain.Thenfolkask,‘Whowouldwanttolivethere?’–whichbecomesaself-fulfillingprophecy.Butsuchimparitiesmusteventuallyend.Thereisusuallynothingfundamentallywrongwiththelandinpoorerareas,andnothingparticularlyspecialaboutthelandinricherareas,otherthanthatricherpeoplelivethere.Leftunchecked,priceswillriseandrisewheretheystartoffhighest–untilalmostnoonecanaffordtolivethere–andthenwhowouldbefoolenoughtobuyorrentthere?Thisishowanewcycleofvolatilitybegins.
![Page 92: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/92.jpg)
Itisnotjusthousingpricesthatriseasinequalitiesgrow;sotoodorents,andformuchthesamereason:becauseitbecomesincreasinglyimportanttoavoidpoorerareasandpoorerregionsasinequalitiesriseandthoseplacesthatstartedoffalittledisadvantagedbecomemoreevidentlypoor.Aprecariouslyhousedpopulation,onethatisalwaystemporarilyrenting,thengrows.Moreandmorepeoplehavenowayofknowingwhentheirlandlordmightdecidetheyhavetoleavetheirhome.Thehighertherentyoupay,thelesslikelyitisthatyouwillbemadetoleave,butitisstillnoguarantee.Precariouslivingisnotjustabout
precariousemployment;itisalsoaboutbeingprecariouslyhoused.
![Page 93: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/93.jpg)
Theeffectsofconstantlyhavingtomovehome,notwhenyouchoosebutwhenyouareforcedto,areknowntobeworstforchildrenandtheelderly.Theyarethemostvulnerablemembersofpoorerhouseholds.They,andimpoverishedchildlessadults,havetheleastchoiceinhousing.Itisthemostmoney,notthemostneeds,thatgainsyouthemostspace.IntheUKoneresultofpayingas
higharentasyoucouldaffordto,andchargingasmuchasyoucouldgetawaywith,wasthatintheUKthehousingbenefitbillwasallowedtoballoon.Thiswasthemoneygovernmentwaspayingdirectlytolandlordsforpeoplewhocouldnotaffordtopaytherentthemselves.GovernmentintheUKisnowtrying
![Page 94: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/94.jpg)
toreducethattaxpayersubsidytolandlords,butitisdoingsobyharmingtenants,casualtiesofthecoalition’scontinuingfundamentalbeliefthattheunfetteredmarketisthebestroutetoallocatinghousing.Tenantsarenowbeingharmedinmanyways:mostwellknowniswhentheyaretoldtheymustleavetheirhomebecauseithasoneroomtoomanyinrelationtothesizeoftheirfamily,buttherearenosmallerpropertiesforthem;leastwellknownisthegrowingillicitprivatemarketinrentingoutsingleroomstoentirefamilies,orevenunheatedgardensheds(suchisthegrowingdesperationforhousing).Toseewhatcanhappentothe
majorityofthepopulationwhenyouallowthehousingmarkettorunto
![Page 95: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/95.jpg)
extremes,itisnecessarytolookoverseas.Andyoudon’thavetolookthatfar.Irelandshouldbecloseenoughtocausesomefear;orevenSpainandPortugal,ofwhichmorelater;buttoendthisintroductorychapteronthecurrentcrisislet’staketheUSandexaminewhathappenedtherewhenpricesandrentsroseastronomicallyandmedianwagesbegantofallinabsoluteterms,yearafteryear,withoutapparentend–eversincethelate1970s,infact.32
ManypeoplewhohadrecentlyboughtpropertyintheUSintheyearsupuntil2008didsoonwhatturnedouttobeunsustainablemortgages.Often,oncetheydefaultedonthemortgage,theywouldwalkoutoftheproperty,leavingthekeysbehindandtryingto
![Page 96: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/96.jpg)
leavethedebtwiththehome.Otherswereevicted.Asmoreandmorepropertybecamevacant,vandalsmovedin.BecausethebottomhadfallenoutofthemarketinmanypartsoftheUS,whenthebankstriedtoauctiontheemptydwellings,inmanycasestheycouldfindnobuyers.Asaresultbanksstoppedauctioningmostpropertiesinmanystates.Thegraphbelowshowshow
quicklybanks’attitudeschangedtothehugenumbersofpeopleunabletomeettheirmortgagepaymentsfollowingthecrashof2008.USbankssimplygaveuptryingtoevictdefaultingmortgageesinmanyplaces,lettingpeopleremainintheirpropertylongaftertheyhadstopped
![Page 97: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/97.jpg)
paying.Insomestatesthisappliedtothemajorityofdefaulters.33
Sobadlyhadthehousingmarketslumped,andsowidespreadwastheproblem,thatthebanksoftenfeltthatthegamejustwasn’tworththecandle.Thiswasjustacoupleofyearsago,remember,notthe1930softheGreatDepression.Therewerealsocampaignsagainsteviction,butthesewerelesseffectivethantheknock-oneffectsoftheevictionsthemselves:thebankssooncametorealizethatleavingpropertiesemptyreducedwhatlittlevaluewasleftinthemandsowasultimatelynotinthebanks’bestfinancialinterests.Bylate2012,acrossallofNew
YorkState,theaveragedefaultingborrowerwasbeingallowedtoremaininhisorherhomeforalmost
![Page 98: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/98.jpg)
threeyears,rentandmortgagefree.IntheUSasawhole,theaveragetimefordefaultingmortgageesliving-for-freehadrisentooverayear(andhadmorethantripledsince2007,whenitwasnormaltoevictpeoplewithinaboutfourmonths).However,noneofthisapparentlyincreasedleniencywasenjoyableeitherfortheoverexposedlendersorforthebankruptborrowers,whofacedaprecariousfutureintheirnowbank-ownedproperties.Alltheseresidentscould,atanytime,beevictedandmadehomeless.
![Page 99: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/99.jpg)
Figure2.AveragenumberofdaystocompleteaforeclosureintheUSbystate,2007–12.ThetimetocompleteaforeclosurehasnearlytripledintheUSnationwide,fromaboutfourmonthsin
2007tonearlyayearin2011.
Intheyearsfollowing2008somethingfundamentalchangedintheUS.Bothbanksandbuyerslearnedalessonthathadbeenforgottenfordecades:thatfreemarketmadnessleadstomisery.The
![Page 100: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/100.jpg)
bottomcanfalloutofmarketswhenthosemarketsarelefttotheirowndevicesandwhenthevastmajorityofparticipantsinthemarketareill-informedincomparisonwithafewinsiders.Andevenmostofthoseinsiderswereburntintheprocess!Inhindsightjustafewofthefew,theinsiders’insiders,cameoutwithaprofit.ThevulturesofthisparticularDisasterCapitalismwerethosebanksandinvestorsthathadbetonthecrashoccurring.MaybetheyhadreadtherightbooksandlookedatthatpictureofadreamhomeinthesamewaythatRobertFrankhad.Maybetheyrealizedthatatsomepointitwouldallhavetoendandtheypositionedthemselveswelltotakeadvantageofthatending.
![Page 101: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/101.jpg)
ManypeopleoutsideoftheUSareunawarethatnotonlyisanear-completehousingmarketcollapsepossible,butalsothatithasjusthappenedtoamarketaslargeandrichastheUS’s.TheEuropeanpressappearedaversetoreportingthesetrendsfromacrosstheAtlantic,despitebeinghappytotalkendlesslyofUScelebrities.YouhavetolooktotheUSpresstofindthereports.Perhapswritingonhousingmiserydoesnotsellnewspapers.PerhapsthecollectiveinterestsoftheEuropeanbanks,thepressmoguls,thepoliticiansandalltherestofthosewithmoneytiedupinthesystemweresogreatthatitwasthoughttobeabadideaforpeopletostartthinkingthathousingwasnotverysafe,thatitwasnolongera
![Page 102: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/102.jpg)
solidinvestment.InIreland,Iceland,Portugal,Spain,ItalyandGreecepeoplearemorewary.IntheUKtheyarenot.Reportingjusthowbadafinancial
crisishasbecomemayappearasbothunpatrioticandasscaremongering;but,ifitisnotdone,thewayisopenedforsomethingworsetooccurinthenearfuture.ThisbooktellsthestorythathasbeenrepeatedlyignoredintheUKandsuggestswhatmightbedonetoeffectchangeforthebetter.Itbeginswiththischapteroncrisis,becauseweareincrisis,butitshouldberememberedtherearemanyroutesoutofacrisis.Notallisdoomandgloom,buttoseewherewemightgettorequiresaclearerpictureofwherewehavebeen.
![Page 103: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/103.jpg)
Chapter2concernstheplanningandthinkingbehindhousing:howhousinghasonceagaincometoreflectsocloselyourclassstructureandsocialpolarization.Issuesoffreedomandgreed,efficiencyandinequality,arefirstdealtwithindetailhere.Lessonsfromthe(Roaring)1920sand(Depression)1930sareconsideredwithaviewtoseeingwhetherourbehaviourfollowingthe2008crashcouldhavebeenpredictedonthebasisofwhathappenedafter1929.Chapter3considersthe
foundationsofhousinginBritain:whatunderliesourhomes.Howhousingfinancebeganasaformofsavingsmallsumsforthosewhowerecareful,butthencametobeintricatelyboundupwithgenerating
![Page 104: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/104.jpg)
wealthandwithgrowingeconomicinequality.Theclaimbeingmadehereisthatitwasashiftinvaluesandprioritiesthatledtoourcurrentmarketvolatility,butalsothatwhathappenedinthepastisnotnecessarilyasureguidetothefuture:thefailureofhistorytopreciselyrepeatitselfincreasesuncertainty.Chapter4concernsthebuilding
andupkeepofhousing.Throughthe1920stothe1970s,whenwewerebecomingmoreeconomicallyequal,housingforthepoorwasbeingbuilttobetterandbetterstandards,whilehousingfortherichwassubdividedor,attheotherextreme,turnedintoopenhomesforthepublictoview.WearenowrapidlymovingawayfromthattimeandbacktowardstheinequalitiesoftheRoaringTwenties.
![Page 105: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/105.jpg)
Chapter5looksathowwearebuyinghousing:howwerentit;borrowtobuyit;trybutoftenfailtoensureourhomesareaffordable.ItisnotjustthatBritainbegantobecomemoreunequalafterthe1970s,butthatLondonbegantogrowinpopulationtermsagain;thecapitalcityhadbeenbecominglesscrowdedanditscitizensbetterhouseddecadeafterdecadefrom1911upuntilthen.Nowthenew,rapidlyregrowingLondonisEurope’sonlymega-city,aplaceinwhicheventheextremelywellpaidcanstruggletofindaone-bedroomflat.WhataretheimplicationsforhousinginBritainofcurrentattemptstotrytoclearthepoorfromLondon,ofallowingittogrowsorapidlyandsodifferentlyfrombefore?
![Page 106: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/106.jpg)
Chapter6turnstothecurrentslumpinhousingandaskswhyitissaidthatthereisnotenoughhousingforall.Thisisworthquestioning,giventhat,inaggregateandpercapita,wehaveneverhadsomuchhousingavailabletobelivedin.Ifweneedtobuildgreatnumbersofnewhomes,whyissomuchoftheexistingstockempty?Whyaresomanyhomesleftemptyforpartoftheweekjustbecausetheyaresomeone’ssecondorthirdhome?Andwhyaresomanymorepeoplenow,asopposedtotenortwentyyearsago,occupyingsuchlargehomessoinefficientlyifwehaveanoverallshortageonsuchalargescale?Chapter7considershow
speculationinhousinghasgotus
![Page 107: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/107.jpg)
intothismess:therentarrears,repossessionsandhomelessnessthatresultfromrampantspeculation.Changesinhowwearehousedcancausegreatchangesinsociety.Theycanfosterselfishnessandbeusedbythosewhowanttolabellargesectionsofthepopulationasfeckless.Growinghousinginsecurityhasbeenshowntocontributetorisingill-healthandtothedeep-rootedanxietyandinsecuritythatfeelingsofhelplessnessengender,especiallywhenpeopleareforcedtodeclarethemselveshomelessorbankrupt,ortosuccumbtomassiveborrowinginordertocope.34
Chapter8endsbyofferingupsolutions,suggestingthatextendingalreadyexistingbutlittleusedlegislationtoallowpeopletostayin
![Page 108: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/108.jpg)
theirhomeswhentheyarethevictimsofspeculationcouldleadtoafuturewherethereisbothlessprofittobedrawnfromhousingforafew,andmoresecuritytobeenjoyedbythemany.Buttogettothatfuturewemustagainworktowardsseparatinghousingfromwealth.Throughoutthisbookgraphsand
chartsillustratingthecurrentcrisisareinterspersedwithphotographsofhousinginthecityofSheffield,wherethefirstdraftofthisbookwaswritten.Theimagesshouldserveasareminderthathousingisprimarilyaboutshelter,aboutourmostbasicneeds,notabouttheextremesofpovertyandaffluence.And,althoughLondonismentionedveryofteninthesepages,thisismostlyastoryofpeople’sstruggleoutsidethecapital.
![Page 109: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/109.jpg)
ThefinaldraftwasfinishedinOxford,inSeptember2013,bythenthe‘mostunaffordablecityanywhereoutsideLondon’.35Writingabookonhousingwhilemovingbetweentwosuchdifferentcitieswillhavecolouredthepagesthatfollow.Inneithercitycanmostpeoplequitebelievehowpeoplearehousedintheotherplacewhenitisdescribedtothem.Bothcitieshaveacutehousingproblems:SheffieldhasthelongestsocialhousingwaitinglistintheUK,OxfordthehighestpricesoutsideofLondon.Housing,likesomuchelseinlife,isultimatelyaboutgeography–abouthowweallgettofitin.
![Page 110: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/110.jpg)
![Page 111: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/111.jpg)
Thisimagemaylookasifitisnothingunusual.Allitshowsisabedinacornerofaroom.Itisanoldbed;themattressiscoveredwithasinglefittedsheetandaduvetisthrown
acrossit.Thepillowstillshowstheimprintoftheheadofthepersonwhosleptinthebedlastnight,and,ifyoulookclosely,you’llseethatthewallsofthisbedroomhavebeenpaperedovercrudelybuteffectively.YourviewofthisbedmaychangeonceyouknowthatitisabedinahostelforhomelessyoungpeopleinSheffield.Aboveallelse,housingisaboutbedrooms,aboutaplaceinwhichtosleepandfeelsecure.Thisbedhas
recentlybeenhometodozensofyoungsters,allofwhomlacksecurehousing.Bedsinhostels,inprisons,inhospitalsandincommunalhallsandlodginghousesarenotincludedintheofficialstatisticsonhowmanybedsthereareinBritain.Behindthehousingstatisticstherearemissingnumbers,andbehindthemissingnumbers,andthebricks,mortar,plaster,wallpaper,bedsandbedding,therearestoriesabouthowpeoplefitintosociety–ornot.Ourhomesaretheslotswefitintoinspace.Ourfamiliesaretheslotswefitintointime.Makinghousinghardertocomebymakesbeingpartofsociety,evenbeingpartofa
family,allthehardertoachieve.
![Page 112: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/112.jpg)
![Page 113: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/113.jpg)
2
Planning
TheUKhasoneofthemostpersistentlyvolatilehousingmarkets,withfourboomandbustcyclessincethe1970s.Thesecyclesdistorthousingchoices,driveuparrearsandrepossessionrates,inhibithouse-buildingandheightenwealthinequalities.
–MarkStephens,ProfessorofEconomics
attheUniversityofGlasgow1
Superficially,thecurrenthousingcrisiscanappeartobeacrisisoflandandbuilding.TheleadinghousingcharityShelterclaimsthat‘The
![Page 114: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/114.jpg)
ultimatesolutiontoEngland’shousingcrisisistobuildmorehomes.’2Thegovernment’sBusinessSecretary,VinceCable,firstcalledforan‘aggressiveprogramme’ofhouse-buildinginhisspeechatthe2012LiberalDemocrats’annualpartyconference,3asentimentthatwasechoedbythePrimeMinisterlaterthatyear.4
Atcertaintimesnotenoughlandappearstobeavailableonwhichtobuildhomesandnotenoughbuildersappearwillingtobuild,evenwhenthebigbuildingfirmshavecontrolofsomuchofthelandthatisactuallyavailable.Speculatorscanforceupthepriceoflandfarfasterthanthatofhousing.ProfessorMarkStephensisrightinsayingthatsomehouse-buildinghasbeeninhibitedbythe
![Page 115: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/115.jpg)
volatilityoftheUKmarket.Attimesinthepast,andjustafterapricefall,itdoesnotappearworthwhiletobuildnewhomes,becausetheywillsellfortoolittle;atothertimesitappearsworthholdingontothelandandbuildinglater,becausepricesarerisingandrising.ButfundamentallyShelteriswrong:the‘ultimate’probleminrecentdecadeshasnotbeentoolittlebuilding,butgrowinginefficiencyinouruseofthehousingstockthatwehave.Growingincomeandwealth
inequalitiesmeanthathousingisbothchosenandallocatedlessandlessbyneedandmoreandmorebytaste.Andinadequatehousingisincreasinglyputupwithsimplyindesperation.AcouncilmaisonettethatwasbuiltinnorthernEnglandto
![Page 116: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/116.jpg)
houseafamilyofthreeorfourmighttodaybeboughtbyasingleprofessionalinneedofsomewherecheap,someonewhofeelstheneedofastudy,asparebedroomandlotsoflivingspace(albeitpossiblyinanotverydesirablearea).Thefamilywhocouldhavelivedthereishousedbadlyelsewhere,butthereisn’tenoughmoneytoprovidefortheirgreaterneed.Morebetter-offpeoplearesingleforlonger;welivelonger;andwebreakupmorefrequentlyandtakelongertostartanotherseriousrelationshipthanweusedto–sowecaneasilycometooccupyhousinglessefficiently.Whenwemarriedyoungandstayedmarried,wefittedbetterintothehousingstock;butitisnotourchangingdemographicsthatarecausingtheshortageofhousing,
![Page 117: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/117.jpg)
butratherthegrowinginequitiesinoureconomics.Familiestendtobemuchsmaller
thanintherecentpast,andpeoplestartthemfarlater.Intheory,twosmallhouseholdscouldshareonelargehome,butyouhardlyeverhearoftwolone-parentsingle-childhouseholds,agroupoffourpeople,sharingahome.Eveniftheywantedto,theyprobablycouldnotaffordit.Thatiswhatiskey.Gobacknottoolongagoin
historyandyouhearofhowcommonitwasforpeopletobepackedfarmoretightlyintohousing.I’mnotsuggestingweneedtodothat,butIamsuggestingthatweshouldstartworryingmuchmorethanwecurrentlydoabouthowmanyofourbuildingsareemptyforsomuchof
![Page 118: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/118.jpg)
thetimeandofhowmanyroomsareunused,eveninbuildingsthatarenotvacant.Itisworthgoingbacktowhentherewasalmostnounusedhousing,in1929,andtolookathowthemarketcrashwasdealtwiththen,backwhenwhatwasnormalinBritainwastorent;andwhentherereallywerenotenoughhabitablehomestogoround.Thelasttimetherewasa
depressionasdeepandaslongastheonethatEuropeandmostoftherestoftherichworldarecurrentlyexperiencingtherewasaverydifferentresponsefromthehousingsector.Between1920and1938,Britainexperiencedaboominbothmortgagelendingandhouse-building.Thiswasdespitewagesbeingstagnantandunemployment
![Page 119: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/119.jpg)
rising.AsFigure3belowshows,theboomstartedinthethreeyearsuptotheGeneralStrikeof1926,slowed,andthentookoffagainwithavengeancein1933and1934.Thefigurealsoshowsthatitwasfuelledbytheprovisionofadditionalmortgageadvances–bygreaterlendingandgrowingdebt.Somecommentatorsmightwellsuggestthatifitworkedthen,whycouldsuchahouse-buildingprogrammenotworknow?Theboomwasnotnecessarily
sustainable.Ifithadnotbeenforthestartofthewarin1939,theremayhavebeenafurthereconomiccrash.Butthisexampleneverthelessillustratesapopulationbecomingprogressivelybetterandmorefairlyhoused,eveninthemidstofagreat
![Page 120: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/120.jpg)
economiccrisisandfear.Ithashappenedbefore;ithappenedthen.However,fromthe1920sto1939Britainwasalsobecomingamuchmoreequitablesociety.Halfofthefallinincomeinequalitythatoccurredbetween1918and1978occurredinjustthosetwentyyears.5
Slumswerebeginningtobedemolished.Thefirsthomesfor(modest)heroeswerebuiltattheendoftheFirstWorldWar;thelastnewstate-fundedhomeswerebuiltfortheirgrandchildrenattheendofthe1970s.Itisfortheirgreat-grandchildrenthatthecrisisisworse.Itcouldbearguedthatthe1920s
and1930saretoofarbackintimeforustolearnfrom,orthatthelessonsofthoseyearsarenotapplicablebecausewenevergotto
![Page 121: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/121.jpg)
seethemfullyplayedout.ItiseasytocometobelievethattheSecondWorldWaralonepreventedafurthermarketcrash.(AnalternativetheoryisthattheUSNewDealandUKKeynesianequivalentsdidgetusoutofthehole,buttheywerepossibleonlybecausetheywerecoupledwithgrowingausterityfortherich.)However,whenwelookbacktohow,despitetheoverallgrowthinincomeequalitythen,thesalariesoffinancierswereallowedtogetoutofcontrolinthoseyears,ortohowlargethegapbetweenrichandpoorremained,despitethenarrowingofthatgap,therelevancetoourowntimebecomesclearer.Thustheyearsbetweentheworldwarsareworthconsideringinalittlemoredetail,beforewemoveforwardintime.
![Page 122: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/122.jpg)
Figure3.Privatehouse-buildingandmortgagelendingintheUK,1920–38.
Today,advocatesofbuildingourwayoutofthecurrentcrisissaythatfiveyearsafterthe1929crashalmost
![Page 123: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/123.jpg)
300,000homeswerebuiltintheUK,and,accordingtothegraphopposite,over£100millionofmortgageswerebeingissuedayear,ahugesumforthosetimes.6Themajorityofhousingmediapunditstodayappeartocallforasimilarlyaggressiveincreaseinlendingandhome-buildingnow.Butwhattheyalmostallignoreisthatinthe1920sand1930sthatbuildingwascoupledwithgrowingincomeequality.Simplybuildingnewhousinginisolationdidnotalleviatethehousingcrisisofthe1920sand1930s;moreandmorepeoplehadtocometobeabletoaffordtobuythathousing.Morehadtoseetheirwagesrise,andtoknowthattheywouldcontinuetoriseinthefuture,sothattheycouldtakeupdebtsandaffordtorepaythem.Most
![Page 124: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/124.jpg)
people’swageswerestableandslowlyrisingbytheendofthe1930s,whiletheincomeandwealthoftherichwas,onaverage,fallingeveryyear7(thoughtherewereexceptionsintheworstyearsandintheworstareasofunemployment).Youhavetogobackevenfurthertoseehowtaxingtheveryrichmoreactuallybegan.In1894inheritancetaxwas
introducedintheUK,butonlyfortheverylargestestates,andonlyatarateof7.5%.By1930thatratehadrisentonearly40%.8Furthermore,incometaxeshadbeenraisedearlier,duringtheFirstWorldWar,andnotreducedmuchthereafter.Webuiltmorehomesforthepoorpartlybydeprivingtherichestofmuchoftheirrecentextravagance.Thus,bythe
![Page 125: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/125.jpg)
1930s,greatwealthwasbeingseriouslytaxedforthefirsttimethroughthosehigherdeathduties.Incomesatthetopofthedistributionwerebeingcurtailed,partlythroughtaxationbutevenmoresothroughrestraint.Bythe1940shighratesoftaxation
deterredpeopleatthetopfromtryingtosecureexcessivepayrises.Whatwasthepoint?Theywouldreceiveonlyasmallfractionoftheextramoneywhentoptaxratesweretakenintoaccount.Toimaginewhatitwaslike,thinkofwhatthereintroductionofhighertaxationtodaymightmean.Achiefexecutivecouldreceiveaslittleas10%todayonearningsofover£500,000ayear,iftheycouldbetaxedat90%.Therewouldthereforebelittlepointaskingfor
![Page 126: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/126.jpg)
payrisesonceyouwereon£500,000ayear.Doubleyourpayafterthat,toanominal£1millionayear,andyouwouldreceiveonlyanextra£50,000forallyoursupposedlyadditionalefforts.Whenthoseatthetoptakehomeless,theyhavelessmoneytospendtryingtobuyupmorehousing,andthelesswellpaidcouldreceivemore.Recentresearchhasdetermined
thathousingwasbecomingmoreequallysharedoutatthesametimeasmorewasbeingbuilt.Newcouncilhousingwasallocatedonthebasisofneed,andsowasfilledupwithfamiliesthatcouldusealltherooms.New-buildprivatesectorhousingwasboughtbecauseafamilyneededmorespaceorwasforminganewhouseholdasacouple,perhaps
![Page 127: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/127.jpg)
afterlivingwithonepairoftheirparents.Nowtheycouldstartafamilyandnolongerhavetofittheirnewfamilywithintheoriginalfamilyhome.Thisrecentresearch,byProfessorRebeccaTunstalloftheUniversityofYork,hasshownthattheallocationofspaceinhousingbecamemuchmoreequitablebetweenthecensusesof1921and1931,and1931and19519–aconclusionthatshereachedbycomparingtheamountofspaceoccupiedbythebest-offtenthwiththatoftheworst-offtenthinEnglandandWalesusingthecensusrecords.Beforethat,from1911to1921,inequalitiesinallocationhadbeengrowing.Today,thesituationisvery
different.Whatlittlehousingisbeing
![Page 128: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/128.jpg)
builtisbeingevenmoreunfairlysharedoutthanitwasadecade,ortwoorthreedecades,ago.Newhousingisnotgoingtothosemostinneed.Contrastthiswiththeperiodthroughoutthe1950sand1960s,andbetween1971and1981,whenhousingwasbecomingevermorefairlyallocated.Fairnessoverthecourseofthelastcenturycomesintoreliefwhenthedecadalpopulationandhousingcensusesareusedtomeasurehowmanyroomspeoplehad,howcrowdedtheywere.Censusdatatellsusthatintheperiod1921–81thehousingproblemwas,inaggregate,constantlybeingsuccessfullyaddressed.Itistruethatpartoftheendofthatrundidincludesystem-builthigh-riseflats.Mistakesweremadeinthepast.Butafter1981
![Page 129: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/129.jpg)
differentmistakesbegantobemade,mistakeswehadnotseensincejustbeforethe1920s.Thosewhohadthemostwereonceagainallowedtotakemore.ProfessorTunstall’sresearch
showsthatbetween1981and1991thosewhostartedoffwithmorespaceendedup,onaverage,gainingmoreofanyadditionalspaceascomparedwithanyothergroupinsociety.Theyweremostlylikelytoextendtheirpropertyortomovehometoanevenlargerproperty,despitehavingstartedwithsomuch.Shortlybefore1981,atthepointatwhichwehadbecomemostequal,thebest-off10%ofhouseholdsstillhad3timesasmanyroomsintheirhomesperpersonastheworst-housedtenth;by2001thatratiohad
![Page 130: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/130.jpg)
risento3.7times,thehighestinequalityrecordedpost-war.Risinginequalityinhousingprovisionmirrorsrisinginequalityinincomeandwealthoverall.10
Inthe1930s,therewas–asthereistoday–aperceivedchronicshortageofhousing.Yetthesituationwasverydifferent.Thentherewasanabsoluteshortageofhousing,notjustaverypoordistributionofalargeamountofhousing,asisthecasetoday;neitherwastheresuchavastamountofoftenunoccupiedhousing.Socialdivisionswereveryhigh,similarinextenttotoday.Thetop1%tookasimilarshareofincomein1936astheydidin2008,butbackin1936theyhadbeentakinglessandlesseachyearforthepasttwentyyears;andtheywould
![Page 131: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/131.jpg)
continuetotakelessandlessforthenextforty.Bycontrast,theverybest-offtodayhavebeentakingmoreandmoreforatleastthelastthirtyyearsand,asyet,showfewsignsofslowingdowntheirland,housingandwealthgrab.11
InEnglandinthe1930s,thepromiseofa‘semiinthesuburbs’appearedtobeawayoutofpoverty,arouteawayfromtheslums.Theslumswereclearedbypublicspending,whiletheveryrichincreasinglyfoundthatdeathdutiesmeanttheyhadtodonatetheirlargesthomestotheNationalTrust,andtodownsize.GrandtownhousesinLondonwereconvertedintoflats.Butwhatworkedthenmaynotworknow.Housingcannotbeviewedinisolationfromothersocialtrends,
![Page 132: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/132.jpg)
anditcouldbequicklyimprovedinthepastandbecomemoreaffordablebecausesocietyasawholewasthenbecomingmoreequitable.
![Page 133: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/133.jpg)
![Page 134: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/134.jpg)
CouncilmaisonettesinBatemoor,Sheffield,viewedfromachild’seye-line.Eachapartmentwasoriginallybuilttohouseasmallfamily.
Somehavenowbeensoldundertheright-to-buyschemethatwasbroughtinbyMargaret
Thatcher’sgovernmentduringthe1980s.Youcanperhapstellwheredifferentstylesofwindowhavebeenusedtoreplaceoldframes,orwherethestylesofthedoorpanelsdiffer.Thosearethe
signsofhomeownershipor,morelikelynowadays,ofprivaterentals.Whileitismainlystillfamiliesoffthewaitinglistwhoarehousedinthecouncil-ownedproperty,slightlymore
affluentsinglepeopleoftenbuythoseapartmentsthatareontheopenmarket.Whatwereoncefamilyhousingunitsarenowsometimessingleadulthomes.Laterontheymayrentthemouttoanotherpersonlikethemselves,ortoacouple,butrarelytoamiddle-classcouplewithchildren.Aseconomicinequalitygrows,fewerandfewerpeopleuseupmoreandmorehousingspaceand
land.
The1930swasthetimewhenlargenumbersofpeoplewerefirstabletoputdowndepositstoborrowmoneytobuytheirhomes.Someof
![Page 135: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/135.jpg)
thesedepositswereaslowas5%ofthepropertyvalue.Andhouse-buildersoftenhelpedevenwiththosemodestdeposits,lendingorevengiftingthatsupposedly‘saved’moneytoprospectivepurchasers.Thiswastostimulategrowthinthehousingmarket,andinawayisverysimilartowhattheUKgovernmenthasbeendoingwithitsschemestohelppeoplebuynew-buildhomestoday.Butlendingtoomuchwasfrownedupon,boththenandnow,asitcouldinflatethemarketand,asboththenandnow,peoplewerelivingintheaftermathofaneconomiccrash.Thereareothersimilarities
betweenthe1930sandtoday.Mortgagerepaymentperiodslengthenedfrom20yearsto25or27
![Page 136: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/136.jpg)
years,despitethemuchlowerlife-expectancyatthetime.In1930themedianageofdeathformenwas67andforwomenitwas71.By2010thesefigureswere82and85respectively.12Butbythenoughtiespeoplehadstartedtotakeoutmortgagesmuchlaterinlifeandalsoforlonger,sotheycouldagainbepayingbackthebankuntiltheiroldage.Thereareotherpossiblesimilaritiesbetweenthe1930sandnow.Backthenthelackofavailablehousingwaspartlyblamedforveryfewchildrenbeingborn,foradipinfertility.Insomequartersthesameissuggestedasbeingastrongpossibilitytoday,evenduringthecurrentmini-baby-boom.
HOUSINGDEMAND
![Page 137: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/137.jpg)
Weareinahousingcrisisthatextendsfromthehomelessonthestreetwellintothemiddleclass.Wehavecouplesdecidingnottohavechildrenbecausetheydonothavethespacetohousethem.Wehavepeoplepayingextortionaterents,andthelowestrateofnewhomeconstructioninalmostacentury.Yetministersjustsittherelikegoutyoldmeninthe19thhole…
–NickCohen,Spectator13
Britainisnotundergoingamini-baby-boomwherethecostofhousingishighest.In2011thefertilityoftheUKwas1.91childrenbornperwoman,butthelowestnumberwasinLondon,at1.84children.14Furthermore,thereisextensiveout-migrationfromLondonoffamilieswithchildren.Nodoubtthenear-impossibility,formany,ofbeingabletoprovidetheir
![Page 138: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/138.jpg)
childrenwithmuchspacewithinBritain’smostcrowdedcityisalargepartofthereasonfortheannualexodusofsomanychildrenfromthecapital.CentralLondoninparticularisnotchild-friendly,withbyfarthelargestannualnetmigrationofchildrenroutinelyrecordedasbeingfromthere.15However,thatannualout-migrationhasbeencurtailedsincethecrashof2008.Whenyoungfamilieswithverysmallchildrencan’tmoveoutofinnerLondon,thereissuddenlyahugeshortageofprimaryschoolplaces,soonsettoreach118,000places.16
Acenturyago,totrytoalleviatetheseverehousingproblemsandtopreventlandlordsfromprofiteeringduringandaftertheFirstWorldWar,thegovernmentimposedrent
![Page 139: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/139.jpg)
control,from1914onwards.Atthattime,payingrentoflessthanathirdofyourincomewasgenerallya‘danger-signal’thatsomethingwasverywrongwiththerooms.17Therewasgreatagitationinsociety;revolutionhadjusttakenplaceinRussia.NevilleChamberlain,asHealthMinisterin1923,introducedaHousingActthatsubsidizedprivatesectorhouse-building.ThefirsteverLabourgovernmenttogainpowerwaselectedin1924,havingwonalmostenoughvotesin1923.Itpromisedmanythings,amongthemtheaddressingofthehousingproblemofthosetimes.ItintroducedtheHousing(FinancialProvisions)Act,nowknownastheWheatleyAct,whichencouragedhouse-buildingbylocalauthorities.Then,
![Page 140: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/140.jpg)
exactlytenyearslater,in1934,theSpecialAreas(DevelopmentandImprovement)Actwasintroducedbythecoalitiongovernmenttoboostspendinginthemoredepressedindustrialregions.Next,intermsofmilestones,the1944coalitiongovernmentpledged‘aseparatehouseforeveryfamilythatwishestohaveone’.18TheLabourgovernmentof1945beganthebuildingneeded.Changetakestime.Theachievementofeachdecadewashardwon,andwouldoftenhaveappearednearlyimpossibletoimaginejustagenerationearlier.Inretrospect,wecanseethatthe
periodfrom1918throughto1945wasoneofevergreaterinterventionintheprovisionofhousingbythestate.Theperiodthatfollowed,from
![Page 141: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/141.jpg)
1945to1970,isnowfamousforalternatingLabourandConservativeadministrationsvyingtodemonstratewhichcouldbuildthemoststatehousing.Therewasaboominprivatesectorbuildingtoo.Thepopulationbecameincreasinglywellhoused.Althoughthe1971censusstillrecordedwhetherahomehadhotrunningwaterornot,itdidsotohelplocalauthoritiesdeterminewheremostimprovementsinhousingstockwereneeded.Greatplansweremadebythelate
1960sLabourgovernmentstoimprovehousingevenfurther,culminatinginthecensusof1971,whichwasthemostdetailedsurveyofthenation’shousingevermade.However,bytheearly1970s,Britainwaslurchingthroughaseriesof
![Page 142: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/142.jpg)
financialcrises,andtheaspirationthateveryfamilythatwishedtohaveaseparatehomeshouldbeabletohaveonesufferedasetback.Inflationwassoaring,andtherewasasqueezeontheprovisionofmortgagesasinterestratesroseandrose,beingwellover10%ayearformanyyearstocome.Partofthereasontherewasapolicyturnaroundby1981wasbecauseofpublicdisquietoverthesecrises–adisquietthatallowedagroupofpoliticianstocometopowerin1979andinstigatepoliciesthatbenefitedthebest-offinsociety.Indoingsotheysowedtheseedsofourcurrentcrisis.Again,acomparisonwiththe
1920sand1930sshowsthat,followingtheeconomiccrashesof1929and2008,interestrateswere
![Page 143: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/143.jpg)
keptlow.(Thefinancialcrisesofthe1970swereminor,andverydifferentincomparisonwitheitherofthesecrashes:interestratesroseratherthanfellasinflationrose,buttheywereseizedonbytherichasanopportunitytoalloweconomicinequalitiestogrowagain,and,insodoing,tostokeupgreaterinequityinhousing.)Theeconomiccrashof2008andtheensuingslumpwasuncannilysimilartothatof1929.Inresponsetothelatter,theUKgovernmenttriedtocreateahousingboombyloweringinterestratesinawayverysimilartowhattheBankofEnglanddidpost-2008,andhascontinuedtodountilatleast2014.Wheninterestratesaresetverylow,theincentivetoborrow,includingpossiblyborrowingto
![Page 144: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/144.jpg)
build,isveryhigh.Butthiscanbeariskifinstitutionsandpeoplefinditdifficultlatertopaybackthecostofthatborrowingwheninterestratesrise.Takealookatthegraphbelow,
whichshowshow,in1929,thethree-monthTreasuryBillrateplummetedalongwiththeBankofEnglandbaserate.TreasuryBills,knownassovereignbonds,areshort-terminvestmentsthatcanbeboughtfromthegovernment,whichpayswhatis,ineffect,interestata‘rate’advertisedwhentheyaresold,butreceivedonlywhenthebondsmature.Thebaserateisnormallylowerthanthis,beingtherateatwhichtheBankofEnglandwilllendtootherbanks.
![Page 145: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/145.jpg)
In1932thebaseratefellto2%,bringingdowninterestratesforborrowerstoo,notquitetothehistoricallylowratesoftoday,butstilltosomeofthelowestbaserateseverrecorded.Notealsohowflatthetrendshowninthegraphbelowwasfiveyearsafterthecrash(from1934onwards,throughto1939).ThatisverysimilartowhatthenewGovernoroftheBankofEngland,MarkCarney,suggestswillhappenfrom2013to2018,althoughmanydonotbelievehim.19Hesayshewillkeeptherateslowuntilunemploymentfallsbelow7%.Hemay,buttheofficialrateofunemploymentwasnotmuchhigherthan7%whenhesaidthis,andtheofficialratecaneasilycomedownifmorepeopleareforcedtotakeafew
![Page 146: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/146.jpg)
hoursofverylow-paidpart-timework(dockedbenefitswouldbetheresultiftheyfailtoaccepttheworkonoffer,nomatterhowunsuitable).Backinthe1930stherewasfarlesspart-timework.Ajobwasajob,andtheresimplywerenotenoughjobstogoround.
Figure4.InterestratesintheUKbytypeofloanandTreasuryBills,1925–39.
![Page 147: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/147.jpg)
Thegraphshownabovewasdrawnnotinthe1930sbutin2008,theyearthecurrentcrisisbegan,byGeorgeSpeight,thenSeniorManagerattheBankofEngland,responsiblefortheSystemicRiskReductionDivision.20Oneresultofthepoliciesofthe1930s,Speightremarkedin2010,wasthatthe‘housingmarketlookedincreasinglyunstable–[with]riskofaviciouscircleoffallingprices,risingrepossessions,financialpressureonbuildingsocieties,reductioninthesupplyofmortgagelending’.21
SpeightthoughtitworthcomparingwhatwasbeingplannedfortheUKafter2010withwhathadhappenedduringthe1930s.Asinglelifetimelater,andagain
thereareconcernsthatthehousing
![Page 148: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/148.jpg)
marketisbecomingincreasinglyunstableandthatgovernmentpolicies–bycausingpricestoriseandbuildingupanewbubble–mayevenbefuellingthegrowinginstability.Duringsummer2013financialexpertsbegantocallforaturnaroundinpolicieswhenitappearedthatahousingpricebubblewasoncemoreforming.22Earlier,inhislectureattheAshmoleaninOxford,GeorgeSpeighthadsaidthatwehadnowayofnowknowingwhetherthelow-interest-rate-fuelledlendingfrenziesofthe1930swouldhavespiralledoutofcontrolandthatallthathadsavedthelendingsocietieswastheonsetofthewar.Heexplainedthatthecostofrearmamentincreasedpricesoverall,whichhelpedtoraisehouseprices
![Page 149: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/149.jpg)
andhencetoreducethesizeofhousing-relateddebt.Then,duringwartime,thegovernmentitselfguaranteedmortgagepaymentsandtherewasfurtherinflation.Inotherwords,thelasttimethe
housingfinancesysteminBritainwasinasmuchofamessasitistoday,thesaviourprovedtobeacataclysmicevent–aworldwar.Themuchmorestableeconomyweenjoyedafterthewarwaspartlytheproductofthewar’seconomicconditions;andthecontinuedgrowthineconomicequalitywaspartlytheproductofthewar’spragmatismandsolidarity.Backthenitwasacceptedthateveryoneneededtobedecentlyhoused,andthatuntilthathadbeenachievednooneshouldhavetoomuch.Aftertheeraofrationing,
![Page 150: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/150.jpg)
peopleunderstoodthatyoualldidbetterwhenyousharedoutbetterwhatyouhad.Partofwhatisdifferentthistime
isthatthereis,hopefully,noworldwarlooming.Butsubsequentlythereseemstobenothingtostopthecurrenthousingcrisisturningintoahousingdisaster.Duringwartime,housingrevertstowhatitshouldbe:shelter.Andbankerstowhattheyshouldbe:accountantsemployedtoprotectusfromgamblersandgambling.Todaythereisnocollectivememoryof‘allbeinginittogether’,ofsharingbyrationing.Rather,thereisawidespreadethosinstilledbyThatcherismthatyouneedtoputyourselffirst,togetintothetophalfofsocietyandthenyou’llbeOK;or,ifyouarealready
![Page 151: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/151.jpg)
inthetophalf,togetintothetoptenth;and,ifyouareinthetoptenth,tobecomeoneofthebest-off1%.Thereisremarkablylittleunderstandingthatthe1%canonlyeverbe1%ofthepopulation.Butwhatisalsodifferentnow–
andwhyweshouldnotdrawtoomanyparallelswiththe1930sbuildingspree–isthatthenwehadfartoofewhomesforthenumberofpeoplelivinginBritain.In1931therewere,onaverage,4.2peopleforeverydwellingthatexisted.Todaythatfigureis2.3,butforthefirsttimesincethewaritisactuallyrisingslightly.23Orthodoxeconomictheorysuggeststhat,becauseofthis,housingpricescouldstarttorecoveroverallandbuildingresume,becausethereisnowanincreasingabsolute
![Page 152: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/152.jpg)
demandtobemet,notademandlargelycreatedbyanincreasedinequalityinsupply.Butthatdemandhasverylittlemoneybehindit,andtheratioofpeopletohomeshasstillrisenbyonlyafraction.Whatismore,overcrowdingastraditionallymeasuredisrisingmostwherethereistheleastspacetobuild,inLondon.Overcrowdingcausedwhenyoung
adultsareunabletosetupontheirownisalsorising.Altogether,afifthofparentsinBritainwithchildrenagedtwenty-onetofortynowhaveatleastonelivingwiththemwhocannotaffordtomoveout;andatenthhaveonewho,theysay,couldjustaboutafforditbutwhochoosesnotto.24ThisisworsethanithasbeenrecentlyinBritain,butitdoesnotcomparewiththetimeofthose
![Page 153: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/153.jpg)
children’sgreat-grandparents,inthe1930s,whentheresimplywasnotenoughhousingtogoround,evenaftersomanyofthebighousesweresubdivided.Morehadtobebuilt.Inthepresentday,asinthe1930s,
interestratesareverylowandtaxesneed,ineffect,toberaisedtopayforthedeficit.Or,putanotherwaybyProfessorNicholasCrafts:‘Theaspectofthe1930sthatisespeciallyrelevantfortodayisthatitrepresentstheonlyexperiencethattheUKhashadofattemptingfiscalconsolidationwhennominalinterestratesareclosetothelowerboundandreductionsininterestratescannotbeusedtooffsettheimpactoftighterfiscalpolicyonaggregatedemand.’25Althoughsomewhatofamouthful,academicthinkingsuchas
![Page 154: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/154.jpg)
thishasledforrepeatedcallsinthebroadsheetpressforustolearnfromthe1930s,26andinsomewayswecan.Someaspectsofthepastarevery
familiar.Duringthelate1920sandintothe1930s,ratherlikethe1990sand2000s,thepayoftopmortgagefinanciersroserapidly.Backthenthesewerethedirectorsofthelargebuildingsocieties,suchastheAbbeyRoadBuildingSociety(ARBS,whichbecameAbbeyNational)andtheCo-operativePermanentBuildingSociety(CPBS,whichbecametheNationwide).TodaytheequivalentstothosehighlypaidbuildingsocietymenofthepastaretheCEOsofthebiggestbanks.Thegraphbelowshowsjusthowquicklytopfinanciers’payroseintheyearsupto
![Page 155: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/155.jpg)
1940.27However,youwouldhavetomultiplytheseaveragesbyatleastonethousandtogettotherateofremunerationofeventhemostlowlyofcurrentfinancialdirectorstoday.Onlyasmallpartofthatincreaseisduetoinflation.Alargepartofthereasonwhythe
payof‘top’bankersissomuchhighernowisduetodifferencesbetweenthetimesthatprecededthecrashesof1929andof2008.Bankersbackthenwerelargelynotaristocrats;certainlythebuildingsocietydirectorswhosepayisbeingplottedherewerenot.Thelandedgentrywerefarricherthen,asweremanymerchantsandindustrialists,incomparisonwiththe‘Citymen’ofthattime.Buttodayitisthebankerswhorulethefinancialroost.
![Page 156: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/156.jpg)
Industrialistsandmerchantsarepaidless,andmanyofthegentryhavesoldtheirmansionstoabankertomakeendsmeet.Contemporarytopfinanciershavebeenfargreedierthantheirequivalentswereeightyyearsago,butnotehowinallbutonecasetoppaystoppedrisingafter1929.TheoneexceptionwasthepayofthemaninchargeoftheWoolwichEquitableBuildingSociety.IronicallyitisnowownedbyBarclays,butthemanatthetopofthatbankin2008,BobDiamond,wasoutofhisjobafewyearsafterthecrashandwasnotreplacedbysomeonewhowasevenmoreexpensivethanhim.Todaytheequivalentsoftop
buildingsocietydirectorsofthe1930s,stillalmostexclusivelymen,
![Page 157: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/157.jpg)
arethehighest-paidemployeesatBarclays,RBS,HSBCandLloyds.ThesearethemenwhoheadthefourmajorUKbanks.Eachofthesebankshasabalancesheetover£1billion.Thesearethefourbanksthatarealltoobigtofail.Theirsize,ithasbeenclaimed,guaranteesthema£34billionadvantagethroughwhatisineffectstateinsurance.28
![Page 158: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/158.jpg)
Figure5.BuildingsocietyDirectorfeesintheUK,1895–1940.
Beingseenastoolargetofailhelpsthelargestbankstopaytheirexecutivessuchenormoussums.Banksarenowsoenormousandso
![Page 159: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/159.jpg)
complex,theyargue,thatonlyafewpeopleintheworldarequalifiedtorunthem.Theseinstitutionshavecometobeofcrucialimportancetoallofusbecauseallofushavetobailthemoutiftheycrash.Intheory,bylaw,collectivelyweareinsuringalldepositsupto£85,000inallthesebanks.Allthetime!Wehavebeenherebefore,butthe
reasontoworrymorenowisthatthelasttimewewereinsuchamesswithourhousingwarcurtailedtheexcessesatthetop.Inthe1930sthecountrywasbecomingmoreequal,butthefinanciersweretakingmoreandmore.Nowwearebecominglessequal,partlybecausethefinanciersaretakingmoreandmore.Asthegraphaboveshows,thelasttimetopfinanciers’payroseasfast,
![Page 160: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/160.jpg)
excessivepaywasslightlyheldincheckbytheeventsof1929,butitwasn’tfullycontrolleduntil1939.Andincomparisonwiththegreedoftoday,theboardroomexcessesofthe1930slooklikepeanuts.
AVARICEANDIGNORANCE
Pleasedon’tmakemesoundlikeapratfornotknowinghowmanyhousesI’vegot.
–DavidCameron,200929
In2009DavidCameronalmostcertainlyknewexactlyhowmanyhomeshiswifeandheowned,orhad‘got’–four–butheprobablydidnotwantallthosewhowereabouttovoteforhimtoknowthis.Whenyouownseveralhomes,younolongerownthemtolivein:youownthem
![Page 161: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/161.jpg)
togenerateandmaintainwealth,alotofwealth.Thenumberofhouseholdsrenting
privatelyroseby1.1millionintheUKbetween2007and2011,to4.7million.Afurther4.9millionwererentingfromasociallandlord.30Thelasttimeasmanypeoplerentedwasinthe1960s,andbythentheproportionhadbeenfallingforatleasthalfacentury.Eventhoughwearenowsomuchbetterhoused,youhavetogobacktojustbeforetheFirstWorldWartofindatimewhenthetrendswereworseningastheyarenow.Backthen,asmanypeopleinBritainwereasinsecurelyhousedastheyaretoday,andfacedafutureofevengreaterinsecurity,inlargepartbecauseafewpeoplereliedontheirpropertyportfoliostomaintain
![Page 162: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/162.jpg)
theirwealthandprivilege.Everyworking-classfamilyandmuchofthemiddleclassrented.Buttopincomescomingfromearningswerelowerthen;itwasincomesfromrentthatwerehigher.Thegreathousingdisasterofourtimesisthereturntosuchgreatfinancialinequality,nowsupposedlybasedonafewbeingworthsoverymuchnotforwhatassetstheyhaveinheritedbutforwhattheydo.Growingincomeinequalityinthe
UK,ledbybankers’payrisesattheverytop,makeshousingincreasinglyinsecureforthemajority,anditisintheinterestsofthebankersthatthisshouldbethecase.Themoretimespeoplestartnewmortgagesorfailtocompleteoldones;borrowmoneytobuybecausetheycannotaffordthe
![Page 163: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/163.jpg)
rent;orborrowmoneytobuyhousestorentout–themoretimesallthathappens,themoremoneybanksmake.Stabilityandsecurityarebadforprofiteering.Whenwehadmorestability,we
hadbuildingsocietiesthatworkedascharities,madenoprofitforanyshareholdersand,after1939,controlledthepayoftheirstaffwell.Butalmostallofthebuildingsocietiesweresoldoffinthe1980sand1990s,whenthelawwaschangedtomakethatpossible.Thusithasbeentheplannedadvancementandgeneraltoleranceofrisingavaricethathasbroughtustowhereweare.Butthekeywordhereis‘planned’:thisdidnothappenbyaccident.Changesinlegislationoverrecentdecadeshaveactively
![Page 164: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/164.jpg)
encouragedtheextremegreedofafewwhohavegainedwealththroughtheignoranceofalargemajorityofus.Rentcontrolshadbeenmaintained
intheUKallthewayfromtheFirstWorldWarto1977,whentheywereconsolidatedintheFairRentAct:thisensuredthatlandlordscouldincreasetherentonlyeverytwoyears,andonlyifrentsofsimilarpropertieswerebeingincreased.Theeffectofthislegislationwastomakeithardforlandlordstoprofitexcessivelyandeasierforpeopletocometoowntheirownhome,asbuildersbuilthomestoselltoindividualsratherthantolandlords.ThisstateofaffairsobtaineduntiltheFairRentActwas,ineffect,repealed,inthelate1980s.The
![Page 165: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/165.jpg)
provisionsofthatpreviousActstillapply,butonlytothosewhoarestillalive,havenotmovedhomeandtookouttenanciesbefore1988.And,asonlyalandlord’ssolicitorcouldputit,‘Propertyinvestorsneedtobeawareofthis,asofteninvestmentpropertiesareavailableatlowpricesbecauseredevelopmentisnotpossible,asthetenantsareprotectedandcannotbeevicted.’31Youcanmakemoremoneyasaninvestorwhenyoucanevict.Thephrase‘propertyinvestor’has
nowenteredthelanguage.Estateagentswillaskpotentialbuyersofpropertywhethertheirinterestisin‘residential’or‘investment’–thelattermeanstobecomealandlord.Shelterestimatesthatnomorethanaround2%ofpeopleinBritainare
![Page 166: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/166.jpg)
landlords.Thenumberoflandlordsdoesnotrisegreatlywhenmoreandmorepeoplehavetorentprivately:whathappensisthatafewpeopleandinstitutionsendupacquiringahugeamountofproperty.Theassuredshort-holdtenancybroughtinbythe1988HousingActallowedthisprocesstoslowlybegin,comingshortlyafterthebigbangof1986whentheCitywasderegulatedandtheoldbuildingsocieties,withtheirmodelsofresponsiblelending,weresubsumed.Thegreathousinginsecurityof
ourtimeshasbeenbroughtaboutbyaminoritybecomingthehoardersofproperty,andthishoardinghasbeenfacilitatedbysuccessivegovernments.Ithasnotalwaysbeenlikethisanditneednotcontinue,but
![Page 167: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/167.jpg)
thehoardingwillgetworseifwedonotacknowledgeitandonceagainmakeitundesirableforafewtostockpilehousing.Wewillalsoneedtoaddresstheacuteinequalitiesinincomethathavearisensince1980andhavemadebuyinganextrapropertywithreadycashanoptionforatinybutveryinfluentialminority.Aspointedoutattheverystartof
thisbook,ifpeoplehoardedfoodonthebasisthatitsvaluewassuretogoupwhenothersbegantostarveandwouldpayanything,wewouldstoptheirhoarding.Buthoardingisnowhappeningagainwithshelterinthemostunequalpartsoftheaffluentworld.Becauseofthis,becauseoftheselfishactionsofafew,manyyoungerhouseholdersintheUKare
![Page 168: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/168.jpg)
nowspending50%oftheirincomeonhousing,oftenjusttorentortocoverthemonthlypaymentsonaninterest-onlymortgage.TheaveragehousingcostsofallhouseholdsintheUKfellfrom21%to20%oftotalexpenditurebetween2008and2010,wheninterestratesfell.32Thisaverageincludesallthosehouseholdsthatownoutrightandhencehaveverylowhousingcosts.Excludetheoutrightownersanditrisestonearlyathirdoftotalexpenditureformost,andmorethanhalfforsome.Thisissimilartowhatwasrecordedformostfamiliesin1913.33
Thereisapointofviewthatsaysthatnoneofthismatters.Somepeoplesuggestthatinafreemarketpeoplearenotforcedtopaythe
![Page 169: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/169.jpg)
priceshomesarebeingsoldfororrentedat;thattheycouldalwaysbuysomethingcheaper.Butitbecomesveryhardtofindsomewherecheaperthatyourfamilycanfitintowhenhousinggreedcascadesdownfromabovetodamageusall.Althoughcheappropertycanbefound,itisofteninareasofacutesocialdeprivationorinpartsofthecountrywherethere’snowork,inthoseplaceswherethecrisishasimpactedparticularlybadly.Rentinginareaswheretherearemorejobsisoftenmoreexpensivethanbuying.Highrentsthenforceuphomesaleprices,becausetheymakethosepriceslooklowincomparisonwithrentingwheninterestratesarelow,andtheyalsomaketheentiremarketmorevolatile.
![Page 170: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/170.jpg)
Whenpeoplearebuyingpropertyatpricestheydonotthinkarereasonable,itdoesnottakemuchforsome,atsomepoint,justtoholdbackalittle.AllthatisunderpinningthehousingmarketinthesouthofEnglandrightnowisageneralfeelingofconfidencebasedonaperceivedlackofalternatives.InthosepartsofBritainwhere
unemploymenthasnotrisen,thereisnowalmostnothingleftontheopenmarketforthepeoplewho,inthepast,wouldhaveboughtthecheapestproperty,somanymorehavetorentthandidpreviously.Withmorepeoplerenting,morepropertyliesvacantbetweenlets.Findingsomewheretoliveasatenantbecomesmoredifficult,withtheresultthatmorepeopleresortto
![Page 171: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/171.jpg)
hostels,moresleeprough,morehavetosquat,morestaywithparentsuntiltheirforties,moreareovercrowded.Itisnotthatthismighthappen:ithashappened.Thatisacrisis.Laterchaptersinthisbookgivethestatisticsonrisinghomelessness.Thosestatisticsneedtobeunderstoodinthecontextofwhylesshousingisavailableformostpeople,despiteourhavingmorehousinginBritain,perperson,thaneverbefore.Afewpeoplearebecomingvery
richbyspeculatingonhousing,owninghomestheydonotneed,oftenrentingthemouttogivethemselvesagreatprofit,butsometimesleavingthememptyforprolongedperiods.Whydopeople,especiallythosewithgreatassets,appeartobehavesoselfishly?And
![Page 172: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/172.jpg)
whyistheirattitudesodifferentfromthatoftheirparents,whodidnotbehaveasbadly?Itappearstobethecasethattheentireculturearoundpropertyhaschangedinthelastthirtyyearsorso–thatwehaverecentlybeentaughttoadoptattitudestowardsitthatarenotthesameasthoseofourparents.Partoftheteachingissubconscious.Changingattitudestohousingmirrorgeneralchangesthatresultfromgrowinginequalitiesinsociety.Aswebecomemoreunequal,webegintothinkdifferently.Recentresearchhasshownthatasinequalityrises,richerpeoplebecomemoreselfish,34
poorerpeoplebecomemoreconfused,35andtheoverallattitudes,ingeneral,ofallofusshifttotheright,tobeinglesscollective,to
![Page 173: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/173.jpg)
thinkingourfuturesdependlargelyonourindividualactions.36Infactourfuturesdependfarmoreonwhathappenstothepeopleallaroundusthanonthoseindividualactions.Howpeoplethinkisgreatly
influencedbytheirtimesaswellasbytheirpersonalcircumstances.InMay2013theright-wingeconomichistorianNiallFergusonclaimedthatthemanmostcreditedwithendingthelasthousingandeconomiccrisisassignificantastoday’s,JohnMaynardKeynes,thoughtashedidbecausehewasgayandchildless.37
ThiswasmeantasaninsulttoKeynes,whowasaLiberal,butwhowouldbeseenasleft-wingtoday.Fergusonlaterapologizedforimplyingthatbeinggayornothavingchildrenwassomekindof
![Page 174: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/174.jpg)
limitation.38TheimplicationwasthatKeynescouldnotseethevalueofholdingontowealthwithinrichfamilies.ButperhapshispersonalcircumstancesdidhelpKeynestoviewtheworldwithalittlelessself-interestthanpeoplelikeNiallFerguson.Tobetterunderstandthemesswe
arecurrentlyinoverhowwearehoused,weneedtounderstandhowsomeoftheveryrichmightthink.Tocaricature:therichknowtheywilldie,butsomehopethattheirideals,theirstewardshipoftheworld,willcausethefuturetobeshapedinaparticularway,sotheirwayoflifecanliveon.Butthatisjustonepossibleexplanationforhoarding.Orperhapstheyarejustfrightenedfortheirchildren,iftheyhavechildren,
![Page 175: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/175.jpg)
andareverymuchlessconcernedaboutthechildrenofothers.Coulditbethatsomeoftherich
amasshousingbecausetheybelievethatpassingongreatwealthtotheirchildrenwillprotectthem?Asinequalitiesgrowandthefuturelooksmoreprecarious,andmoreandmorefamiliesinsocietyareprecariouslyhoused,theincentivetohoardmaygrow.Coulditbeassimpleasthat?Butwithinthemoreselfishworldthattheyarecreating,theirchildrenmayalsohavelesssecurefutureseveniftheystartoffricher,becausetherewillbemoreopportunitiesforfailure.Risingeconomicinsecuritycouldleadwealthypeopletobecomeevengreedier.Theymightneedallthatmoney.Theyneverknow!
![Page 176: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/176.jpg)
Aparticularlyastutesocialcommentator,OscarWilde,whodidnotlivelongenoughtoseethedownfallofVictoriansociety,suggestedin1891that:‘Selfishnessisnotlivingasonewishestolive,itisaskingotherstoliveasonewishes[them]tolive.Andunselfishnessislettingotherpeople’slivesalone.’39
Today,asweregainVictorianinequalities,selfishnessbecomesaskingotherstoliveinwaysthatsupportyourlifestylebutthatyouyourselfwouldnottolerate:incrampedconditions,indebtandanxious.Othersneedtolivelikethisifyouaretoliveasyouwishandhaveasmuchasyouwant,withsparehomesandmuchsparespaceinyourhomes,justincaseyoumightneedit.
![Page 177: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/177.jpg)
Ithinkitischaritabletosuggestthat,becauseofincreasedvolatility,becauseallissuddenlynotsosolid,asmallgroupisagaindoingitsbesttoleaveahugeinheritance;andalargergroupmistakenlybelievesthattheyhavethemoralrighttodoso.Butbeforewearrivedatourcurrentlevelsofextremeinequality,wehadachievedmorestabletimes.However,therewereafewbackthenwhogrewuptohatethatstabilityandpredictability.Inequalitiesdidnotriseagainbyaccident;theyhadtobedrivenupwards.PerhapsweneedmorepeoplewhocanthinkasbroadlyandasunconventionallyasWildeandKeynesoncedid.Bubblesofavaricealwaysneedpricking,buteachbubbleisdifferentfromthelast.Wildegavetworeasonsastowhy
![Page 178: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/178.jpg)
wekeeponrepeatingourpastmistakes:‘Theevolutionofmanisslow.Theinjusticeofmenisgreat.’40Theyremainapposite.Weallknowthatmanyofthenext
generationwilldothingsthattheirparentsdisapproveof.Weneedtorememberthatmostrichfamiliesinthepastsawtheirwealthfritteredawaybyoneorotheroftheirchildren,or,ifnotbythem,thenbytheirgrandchildren.Almostallcharitablefoundationsendupbeingwoundupwithinafewdecadesofthefounder’sdeath.Theirnamesdonotliveon.Almostallbuildingsnamedafterthegreatandthegoodgetrenamed.Goodideasandgooddeedsliveonfarlongerinthecollectivememorythandoesanydedicationofmoney.
![Page 179: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/179.jpg)
ThissectionbeganbyquotingthePrimeMinisteronhowmanyhomesheowned,buthewaslastaskedthatquestionwhenhewasinopposition.DavidandSamanthaCameronwillonedayinheritagreatdealofmoney,morefromhersidethanhis.Theirwealth,eventhatamassedbeforetheirfullinheritanceisreceived,willallowthemtoownmanymorepropertiesinfuture,leavingasideallthefutureearningshemightmakeonthelecturecircuit,orshemightreceivefordesigningexpensivenotebooksforpeoplewithexpensivetastes.Manythoughtthatin2009,back
whenDavidsaid‘Pleasedon’tmakemesoundlikeaprat’,theirkindwereadyingbreed.Manythoughtthatpropertyownershipwasstill
![Page 180: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/180.jpg)
spreadingtomoreandmorehouseholds,thatwealthcouldstillbediluted,especiallyintheaftermathoftheeconomiccrash.NowweneedtorealizethatowningjustfourhomesmaybealowpointforpeopleasrichasthePrimeMinisterandhiswife;infuturethewealthyaresettohavemore,butnotallofthewealthy.Consideringtoday’sextremely
affluentpeoplewetendtoseeonlytheirsuccesses.Weseeonlythosefamilieswhohavesuccessfullyshelteredtheirwealth,thosefamilieswhomarriedwithintheworldoftheaffluentanddidn’twaterdownthelegacy.Thesearethefamiliesandthetrustsandfoundationsthatarestillaround.Wedonotseethat,justasmoneycan’tbuyyoulove,itisalsonosureguarantorofthelong-
![Page 181: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/181.jpg)
termsecurityofyourdescendants.Ifwesawwealthdifferently,wewouldhavefewerproblemsprovidinggoodhousingforall,becauseallofourdescendantscouldonedaydependonwhatwecollectivelyprovideandhowwecollectivelyact.Thisbookbeganwiththe
argumentthatiscentraltothecaseitmakes.Itconcernsourcurrentdilemma’sfoundation.Debatesaboutthearrangementofhousingandwealthareultimatelydebatesaboutfreedom.Thepointbeingmadehereisthatwhenthereisagreatdisasterloominginhousing,thereisalsothepotentialforadisastrouslossofwiderfreedoms.Whenallthatissolidaboutourhousingsystembecomesuncertain,ourfreedomtolivewithoutfearofthefuture
![Page 182: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/182.jpg)
diminishes.Similarlyourfreedomtochoosewhereweliveiscurtailed.Wearelessfreetomovehome,toliveinotherplacesjustacrosstheothersideofourtown,letaloneacrossourcountry.Webecomefearfulofhowmuchfurtherourrighttobeshelteredwellwillbeimpacteduponbythosewhoalwayswantmore.Moreandmorepeoplebecomevictimsofapeculiartypeofmarketfailure,onethatdeprivesusoftherighttolivewheremanyofourparentsdid.
HOPEANDFREEDOM
Thisissuchanegregiousexampleofmarketfailure,andthreatenstotransformaoncesociallydiversecapitalintoanexclusiveplaygroundforthejet-setandacashcowforabsenteelandlords.It’stimewestart
![Page 183: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/183.jpg)
thinkingaboutwhohastherighttothecity.
–GilesFraser,Priest-in-ChargeatStMary,Newington,by
theElephantandCastle(formerCanonChancellorof
StPaul’sCathedral,whoresignedin2011overthe
threattouseforcetoremovetheOccupy
protesters)41
Lackofaccesstodecenthousingandagrowingsenseofinsecurityabouthowwearetobehousedequatestoalackofaccesstofreedomandagrowingrestrictionontherightofthemajoritytoliveagoodandsafelife.Toensureourfreedomtobewellhoused,weshouldlooktowherethosefreedomsaremostcurtailedandbeconcernedfirstwiththosewhoaretheleastfreetochoose.Andwhenitcomestohousing,itisthehomelesswhoare
![Page 184: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/184.jpg)
theleastfree.AsJeremyWaldron,ProfessorofLawandPhilosophyatNYU,42explainedintheaftermathofthehugeriseinhomelessnessthattookplaceintheUnitedStatesduringtheReaganyears(1980–88):
Ifhomelessnessraisesquestionseveninregardtothemostbasicprinciplesofliberty,itisanissuethatoughttopreoccupyliberaltheoristseverybitasmuchasmorefamiliarworriesabouttorture,thesuppressionofdissent,andotherviolationsofhumanrights.Thatthepartisansoflibertyinourlegalandphilosophicalculturehavenotalwaysbeenwillingtoseethis(orsayit)shouldbetakenasanindicationoftheconsistencyandgoodfaithwithwhichtheyespouse
andproclaimtheirprinciples.43
WhatProfessorWaldronwassaying,in1991,isthatpeoplewhotalkoffreedombutwhoarenotconcerned
![Page 185: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/185.jpg)
abouthousing–andabouttheextremeofhomelessness–arenotreallyconcernedaboutfreedomatall.Theymightbeconcernedabouttheirpersonalfreedomtodowhattheylikeandliveastheylike,buttheyareapparentlylessconcernedthatothersshouldhavethemostbasicfreedomofhavingsomewheresafetolive.Oftenpeoplewhoadvocatewhattheythinkofasthegreatfreedomofthe‘freemarket’findithardtoconsiderthebasicfreedomsofothers.Youarelikelytobereadingthis
bookbecauseyoubelievethathousingisacrucialissueofourtimes.Youareveryunlikelytobehomelessoreventohavebeenhomeless.However,weallneedtobeconcerned,notonlyabout
![Page 186: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/186.jpg)
homelessnessandthosewhoareveryinsecurelyhoused,butalsoabouttheveryrich,andtheaffluent,andtheaverage,andthemodest,andthepoorandotherminorities,ifwearetoensurethatthecurrentdeleterioushousingsituationimproves.Thewaytoguaranteegreaterfreedomistothinkmorewidelythanjustaboutourselvesandourfamilies.Ifthereistobeenoughgoodhousingforall,andifourfriendsandfamilyaretobewellhousedinthefuture,wecannotjustlookafterourownshort-terminterests.Itiswheneveryoneconcentrates
toomuchontheirownintereststhatthoseveryinterestsareharmed:wefindthatmostofusaresqueezedintotoolittlespacetobewellhoused,andthatthegrowingwealthofafew
![Page 187: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/187.jpg)
affluentlandlordsandmultiplepropertyownerstranslatesintogrowinginsecurityandfinancialvolatilityforthemajority.Ultimately,whenthesuper-richareencouragedtospeculateonhousing,theyfuelapropertybubblethatgrowsexponentiallywiththeirwealthbeforeitbursts.Thosewhofindtheyhaveinvestedinwhateverisnextmostprofitable,oftenoutofluck,becomethenewrich.Buttheyknowtheirpositioncouldeasilybeusurped.Eachpersonactingpurelyfromself-interestcreatesafuturethatisinalmostnobody’sinterest.Itisinhowwellorhowbadlywearehousedthatthisbecomesmostevident,dayin,dayout.Therearewiderargumentsthan
greaterefficiencyfordemandingthat
![Page 188: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/188.jpg)
webettermanageourhousing.Thewaywecurrentlyorganizehousingliterallymakesmanyofussickwithworry;itisagrosslyunfairallocationofscarceresources.Ultimatelywehavetorecognizethathousingisnotjustcentraltoourwell-beingbutalsotoourenvironment,andtoenvironmentalsustainability.Amoresociallydividedcountryseesitscitizensexperiencelongerandmorepollutingcommutestowork,alessefficientuseoflandandspaceoverall,morewastedbuilding,moreemptybuildings.Morebecomehomelessandfewerarewellhousedwhenafractionofthepopulationisencouragedtospeculateinwaysthatdomoreharmthangood–whenthey
![Page 189: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/189.jpg)
areencouragedtotreatpropertyasafinancialinvestment.
![Page 190: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/190.jpg)
![Page 191: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/191.jpg)
3
Foundations
Weneedtoavoidturningahousingcrisisintoahomelessnessdisaster.
–KathleenKelly,JosephRowntree
Foundation,20121
Housingsellsnews.Itsellsmagazinesonhowtodoupyourhomeandkeepitlookinggood.Itkeepslocalnewspapersafloatfinanciallybyprovidinginsidepagesfullofpropertyadverts.ItgeneratesTVshowsandnewspaperarticlesof‘propertyporn’,imagesofwonderfuldreamhomesbeingrenovatedor
![Page 192: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/192.jpg)
designedbydeterminedcouples–almostalwayscouples–coupleslocating,couplesrelocating,couplesbuyingasecondorholidayhome,coupleswithgrandplans.Housingbecomesentwinedwiththepromiseofsuccessfulpersonalrelationships,withsuccessincareers,inbusinessandinalmostallotheraspectsoflife.Oftenthestoriesaboutbeautifulhomes(andbeautifulpeople)sitsidebysidewithtalesofhousingwoe:thecouplethatcannotgetontheladder,thefamilybeingevictedwhocannolongerpaytherent,andtheunsuccessful,theless‘beautifulpeople’.Everyyearbookslikethisoneare
publishedcomplainingabouthowwehousesomanypeoplesopoorly,evenincountriesasaffluentasthe
![Page 193: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/193.jpg)
UK.Foreachbookthatispublished,thousandsofdisenchantednewspaperarticlesarewritten.Almostallofthesearticlesconsistofonelamentafteranother,concerninglackofsupply,highprices,extortionaterents,thepoorqualityofsomeofourhomes,ortheneedfortheextrahomeswewishwecouldlivein,thehomeswewishcouldbebuilt.Housingcreatescontroversyandconcern.Andwhenournestsappeartobeunderthreat,whenouroffspringstruggletosecuretheirownhome,thereseemstobeoneobviousanswer:buildmore.Thisbookisdifferent:itisabook
abouthousing,butitdoesnotadvocatebuildingmanymorehomes.Thisbookdoesnotaddsupporttomanyoftheusual
![Page 194: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/194.jpg)
solutionsoffered.Itdoesnotsuggestthatso-calledaffordablehousingschemesaregood,orthatwenecessarilyneedthousandsofnew‘councilhomes’tobebuilt.Itdoessuggestthatthehousingproblemrequiresamoreserioussolutionthanmerelybuildingmorehomes.Thisconclusionhasresultedpartlyfromconcernsaboutthenear-future,notaboutthepresent.Solutionssuchashome-building,whichlookasiftheymightsolvesomeofourpresentwoes,maynotbethepanaceamanyimagineifwecontinuetoallowafewtogetricherandricherthroughexploitationofwhatthehousingsystemhasbecome.Buildingmoremayresultinthewealthyowningevenmorehouses,morefamiliesrentingsomeofthosehomes,but
![Page 195: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/195.jpg)
morebeingemptyatanyonetimeandingreaterfutureinequality,unlessweaddressrisinginequalitiesinhowhousingissharedout.Wearecurrentlysowingtheseeds
ofahousingdisaster,adisasterthatisyettocome.Itwillhappenifthoseinaffluentcountriescarryonhousingthemselvesthroughthevehicleofaccruedwealth,whenpropertyownershipbecomesjustanotherinvestment,amoneyspinner.Weneedtolookatwhereweareheading,givenwhatwearecurrentlydoing.IsuggestthatBritainpresentsanextremecase,inwhichthedisasterhasalreadyloomedintoview,andthatthecommonlysuggestedsolutionshavesofarbeeninadequateforthelongterm.
![Page 196: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/196.jpg)
Manysuggestionshavebeenmadeabouthowthehousingdisastercouldbeaverted,apartfrommoremasshome-building:fromreintroducingrentcontrolstobringingincompletelynewlandtaxes,fromrationingbedroomsinsocialhousingtoself-buildingnewgreenhomes.Butwhatneedstobestressedisthatnoneofthesesolutionswillworkifwecontinuetotoleratetherisingpolarizationinwealth.Thismessagemaysoundrepetitive,buttheunderlyingcauseofourproblemsisrepetitive,andourfailuretounderstanditmeansthatsolutionshavebeenproposedthatwouldmaketheproblemofinequalityworse.Whyrationroomsinsocialhousingevenmorewhenthatisalreadythemostcrampedsectorandthose
![Page 197: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/197.jpg)
concernedarenotsittingonahomesimplytoseetheirwealthgrow?Themajorityofournationalwealthisheldintheformofhousing,andthatwealthisbecomingmoreunevenlysharedoutasourincomesbecomemoreunequalyearafteryear.Polarizationinhousepricetrendsexacerbatesthedividesbegunbygrowingincomeinequalities.Isitanywonderwehaveahousingcrisis?Currentlyfartoomanyofthevery
affluentbelievethat,iftheyneglecttopassonalittlewealthtotheirfriendsorfamily,theywillimpoverishthem,thattheywillhavefailed.Somefeeltheyneedtobuytheirsonsanddaughtershouseswhentheyareuniversitystudentssothattheyhavean‘investment’.The
![Page 198: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/198.jpg)
grandchildrenoftheveryrichestinsocietyalsoneedsomepropertypurchasedintheirnames,justtobesecureinfuture.Suchbehaviourwillnotnecessarilyprotecttherelativesoftherich,butitwillcertainlyensurethatanotherfamilydoesnotgettosecureamortgageonthehomethatispartofatoddler’spropertyportfolio.Fortheveryaffluent,transfersof
money,oftenavoidingtaxation,tohelpwith‘grandchildren’sschoolfees,highereducationcosts2andthedepositonafirsthome’3aretriflingsums,amountstohelpwitheverydaycosts,writtenaboutasifGranddadwerelendingatenner.However,itisnotnormaltopayschoolfees:only7%ofchildrenattendprivateschool.Itisnotnormaltohaveyour
![Page 199: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/199.jpg)
universityfeespaidforbyrichrelatives:itisnormaltogetintodebt.Anditisnotnormalforgrandparentstoberichenoughtogivetheirgrandchildrenlargeamountsofmoney,evenontheirdeath.Whenforasmallgroupallthesethingsbecomenormal,theybecomeunconcernedwithissuessuchasthequalityofstateschools,risingstudentdebtorthehousingcrisis.Somemayevenseeitasbeingintheirgrandchildren’scompetitiveinterestsforthelivesofthosewhomtheyareby-passingtobemadeworse.Thechildrenoftherichmightfinditeasiertowininaracewhentheschoolsofthemajorityareunderfunded.Abovetheaffluentgroupbeing
consideredherearepeoplesorich
![Page 200: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/200.jpg)
thatnoneoftheseissuesmatterforthem.Forthem,evenveryexpensivehousingisjustaminorexpense.Becauseoftheexistenceofthisveryrichgroupabovethem,theaffluentoftendonotthinkofthemselvesasrichorfortunate.Theythinkofthemselvesasnormal,havingtoworryaboutwheretheschoolfeesmightcomefrom.Whentheyputpropertyintrust,forinstance,onbehalfofatoddler,theyseetheirbehaviourascareful,goodandmoral.Theymayevenseethemselvesas‘averagepeople’,orasaverageamongthosewhomtheyconsidertobehardworkingandable,‘peoplelikeus’,astheymightsay.InBritain,by2008–10,atenthof
householdshadnetassetsworthat
![Page 201: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/201.jpg)
least£970,000.Mostinthattenthhadfarmorethanthat;and,during2013,thecriterionforentryintotherichesttenthofhouseholdsexceeded£1millionaspropertypricesinLondonrose.Contrastthattenthwiththebottomtenth,where,in2008–10,thosehouseholdshadonly£13,000inassets,mosthavingfarlessandmanywithpracticallynoassetsatall.4And,again,thegapwillhavebeenwideningsincethoserecentyears.Thebest-offofthepoorestwillnowhaveless.TherichesttenthofchildrenbyhouseholdinBritainaregrowingupinfamilieswithwelloveronehundredtimesasmuchwealthasthepooresttenth.5AsaresultrichandpoorchildreninBritaincurrentlyleadparallellives,theirpathsrarelycross,andtheir
![Page 202: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/202.jpg)
perceptionsofwhatisnormalareeasilydistorted.Thepoorbelievethattherichmustbehappy;therichbelievethatthepoormustbedangerous.InBritishsocietytoday,fartoo
manybelievethattheyhavetobecomemoreaffluentforthepurposeofjustlookingaftertheirfamily’sfuturewell-being,especiallytheirhousing.Iftheywerejustalittlebetteroff,allwouldbefine,peoplesay.However,oncetheygetintothatbetter-offgroup,theyquicklyacclimatizetothenormsofthatgroup.Itisveryhardnottoacclimatize.Whoareyoutodisagreewiththemajorityofthenewgroupyouhavejoined?‘Don’tbeskinflints’,youmayhear.You‘havetolookafteryourself,asnobodyelse
![Page 203: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/203.jpg)
will’.Inaway,solongasgrowingnumbersthinklikethat,theymayberight.Toomanyoftheaffluentbelieve
thatyoumustbuythebiggesthomeyoucantoensureyouaresafeinfuture,orholdmorethanonehomeinaportfolioof‘investments’.Thatkindofthinkingmakesusallbadlyoffandall,inonewayoranother,badlyhoused.Anditalsomakeshousingasawholeextremelyvolatile.Itisalsonotnecessarilyagoodidea(socially,psychologicallyorpolitically)fortheveryaffluenttobecorralledinafewareasofexpensivehousing,nearthefee-payingschoolswheretheysendtheirchildren.Andformanyoftheveryrichthereisalwaysthefearthattheirtaxdodgingwillbefoundout,orthat
![Page 204: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/204.jpg)
theirlegaltaxavoidancewillberedefinedastaxevasion.Taxesmayrise,sharemarketsmayfail.Thewealththeythinkissonecessarytotheirwell-beingisatargetformanyothers,andthatcanbefrightening.Nomatterwhoyouare–
multimillionairelandlordorin-debttenant–youcanhavelittlefirmideaofwhatthefuturemayholdwhenitcomestohousing.Butmillionsofpeoplearestartingtorelyonhousingasasourceoffinance,andnotjusthopingforanuncertainwindfall.Already,twomillionexistingpensionersplantoselltheirhometoboosttheirpension.6However,evenifyouaremildlywelloffyoucannotnecessarilyrelyonyourhometopayforyourretirement.In1995themedianfifty-year-oldinBritainhad
![Page 205: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/205.jpg)
netwealthof£66,000.By2005thathadrisento£187,000becauseofthehousingboom,butthenpricesfell.7
PricescannotriseasgreatlyagainwithoutaninfluxofhundredsofthousandsofincrediblywealthyimmigrantsspreadingoutfromcentralLondon.Ifyouarehopingthattherisingvalueofyourhomewillbeyourpension,thatimmigrationiswhatyouarehopingfor.Furthermorethataveragegainof£121,000didnotcomeoutoftheether:itwasatransferfromyoungtoold.8Theyoungergenerationisnowpayingthepriceoftheoldergeneration’shousepriceinflationwindfall.Thisiswidelyrecognized,evenonthepoliticalright.9
Supposeyouarericherthanthemedianbutnotquiteinthetop10%.
![Page 206: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/206.jpg)
YoumightthinkyouwouldthenbeOKrelyingonyourhousing‘investment’,but,evenifyouownpropertyoutrightina‘good’area,itmightplungeinvaluejustatthepointwhenyouneeditsvalue.Mostpeopletaketheirhomeoffthemarketatthatpoint,butyoumightnothavethatchoice.Youcan’tchoosewhenyoubecomeillorredundant,ornecessarilyhavemuchcontroloverwhenyourrelationshipbreaksdown.Housingisbecomingacasinoinvestment.Eventhemodern-daylandlordmayfindhimselfwithagreatliabilityonhishandsinfuture.Whatiffewerpeoplegotouniversityinthefutureandmoreofthosewhodochoosetostayathome?Sothemarketinstudentletsfalls.Whateverhappens,therewillbewinnersand
![Page 207: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/207.jpg)
losers,andtheyneednotbethesamegenerations,groupsorplacesasbefore;timeschange.Themessageofthiseraofgreed
is:trytomakeasmuchmoneyasyoucanoutofhousingassoonasyoucan,andgiveuprentingifyoupossiblycan.Ifyoucan’t–thenyou’realoser.Ifyoubuyorsellatthewrongtime,you’realoser.Ifyoudon’texploitothers,you’realoser.Ifyouspendmoneymaintainingyourproperty,itmaynotincreaseitsvalue,butcosmeticchangesjustbeforeyoucometosellcanboostitsprice–justquicklypaintovertherottingwoodwork.Pricesarerising;andprospective
buyerswillbetoldbyestateagentshowunlikelytheyaretofall.AsonefundanalystputitinAugust2013:
![Page 208: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/208.jpg)
‘Wearebackinatimewhere,asMrGekkosaid,“greedisgood”.And,onceagain,inoneformoranother,itwouldappear“it’slegal”.’10Itisinmanypeople’slegalintereststocajoleothersintostayinginthecasino.Itisintheinterestsofmortgagebrokersandofestateagents;eventheTreasurydoeswell,asitcollectsstampdutyonsales.Buteventuallyalmosteveryoneinacasinoendsupaloser.ItisnotjustintheUKthatthere
aretheseproblems.IntheWestingeneral,housingisincrisis–andallpartsofsocietyareatrisk.PeoplewhothinkofthemselvesasbeingofmodestmeansintheWestare,whenviewedfromaworldwideperspective,amongtherichestonearth.Whensortedbyincome,most
![Page 209: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/209.jpg)
oftheworld’s1%richestpeopleliveinwhatareoftendescribedas‘modesthomes’worth$200,000to$400,000.Itisbecausethesecanfallinvaluejustatthewrongtimefortheirretirement,orforajobchange,orfortheendofarelationship,thatevenpeoplethiswelloffdonotthinkofthemselvesaswelloff.11
Oftenthechildrenofthebest-offtenthofeachaffluentsocietyintheworld(thetop1%oftheworldincomeparade)finditveryhardtogetonthehousingladder,andtheyaretheluckyones.By2013theaveragedepositrequiredbyafirst-timebuyerinLondonwas£64,000!12Nowonderpeoplepanicaboutamassingwealthtotrytohelptheirkids.Theirchildrenwillhardlyhavetoliveinslums,buttheywill
![Page 210: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/210.jpg)
beborrowingvastsumsjusttobuywhatisusuallyaverypokyflat,andputtingdown£64,000forthe‘privilege’.And,whatismore,hardlyanyofthemwillevercompletethatmortgage.Mostdon’texpectto.Theseare‘starterhomes’.Theywillsellitontoanotheryoungperson,whowill,inturn,havetoborrowgreatlyandpayhugeamountsofmoneyininterest,eveniftheratesarehistorically‘low’,justfortheprivilegeofhavingsomewheretosleep.Iftheymovebacktorenting,theymayhavetopayapenaltyfeeforredeemingthemortgageearly.Ifpricesfallatall,itistheir£64,000thatwillbelostfirst.Itisbecausetheverywell-off
sufferaswellastheverypoorthathousingiseveryone’sproblem.The
![Page 211: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/211.jpg)
well-offsufferless,buttheystillhavetheirlivesmadeworse,moreinsecure,bythewayweallocatehousinginBritain,incomparisonwiththewell-offinmoreequitablecountries.Inmoreequitableaffluentcountriesthewell-offhaveasmallershareofnationalwealth,buttheytendtodobetterthantheirrichercounterpartsinmoreinequitablecountriesintermsoftheirmentalhealth;theyalsoreceiveother,lessimmediatebenefitsfromlivinginamuchmoresocialenvironment.Crimeratesarelowerinmoreequitablecountries,sotherichneedfearrobberyandburglaryless;schoolingischeaper,withfarfewerprivateschoolsandmuchloweruniversityfees;andawiderrangeofjobsiswellpaidinmoreequitable
![Page 212: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/212.jpg)
countries,allowingtherichtoexpandbeyondanarrowgroupofoccupations.13
TheUKisagoodexampleforstudy,betterthanmanyothers,ifyouwanttoseejustwhataproblemhousingcanbecomewheneconomicinequalitiesrise.SittingeconomicallybetweentheUSandmainlandEurope,theUKcombinestheexcessesofAnglo-Saxoncapitalismwithroyalistattitudestowardsthesanctityofaccumulatedwealth.IntheUKsuccessive
governments,bothinfluencedbyandinfluencingchangesinculture,haveturnedthehousingmarket,andthefinancialsectorthatreliesonit,intooneofthefewremainingpropsoftheUKeconomy.Thateconomyhas
![Page 213: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/213.jpg)
nowbecomesoreliantonthehousingmarket‘doingwell’thatmuchelseissubordinatedtoit.Interestratesarekeptlowinpartbecauseraisingthemwouldimmediatelythrowhugenumbersofhomeownersintonegativeequity.Thevalueoftheirpropertieswouldfallbecausepotentialbuyers’abilitytopaywouldbereduced.Bykeepinginterestratesaslowastheyarenow,thegovernment(viatheBankofEngland)isineffectlendingbanksmoneyatalmostnocost.(Whenbanksgivepeoplemortgages,almostalltheinterestispaidtothebanks;onlyatinyfractionneedbepaidbacktotheBankofEngland.)GeorgeOsborne’sverylopsided
2013budgetannouncements,hisveryweakautumnstatementofthat
![Page 214: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/214.jpg)
year,MarkCarney’stentativewinterinterventions,andalltheargumentsthatfollowed(aboutwhetherhewasblowingupabubbleorpreventingacrash),aretheresultofmanylonger-termchangesthatmadehousingpivotaltoUKeconomics.Thedisaster,inthisrespect,istheincrediblyunbalancedeconomy:itiswhathappenswhenthesouth-eastbubblepopsandhousepricesfallintolinewiththerestofthecountry;or,perhapsequallydisastrously,whathappenswhentheydon’tandaneconomicapartheidopensupbetweennorthandsouth.Whentryingtodeterminewhat
shouldbedone,theUKiswellplacedtolearnfromitsneighbours.However,whenitcomestohousing,commentatorsoftensuggestthatthe
![Page 215: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/215.jpg)
islandofBritainissomehowinsulatedfromeventsoverseas,bothnearandfaraway.ButBritainhasneverbeeninsulated.JustbecausehousinghasbecomeanationalobsessioninBritaindoesnotmeanthathousingworkscompletelydifferentlyherefromhowitdoesinsimilarcountries.Therearedifferences,buttheydonotmeanthatlessonscannotbelearnedfromnearby.Infact,withintheUK,housingworksverydifferentlyinNorthernIrelandcomparedtoScotlandandWales,andthegreatestdifferencesarefoundwithinEngland.HousinginMiddlesbrough,
Mexborough,MaidenheadandMertonmightaswellbehousinginfourdifferentcountries.Pricesand
![Page 216: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/216.jpg)
rentallevelsvarygreatlywhenyoucomparethesefourplaces,andthegapsinhousingcostsandexpectationsarewideningallthetime.Thepriceofapalaceinthepoorestdistrictwillbarelybuyyouagarageintherichest.Thedefinitionofdecentqualityisalsowildlydivergentinplacesasdisparateasthese.Fittingsandfixturesinthepoorestdistrictsremindvisitorsfromtherichestareasofhowhomesusedtobekittedoutaquarterofacenturyago.IntherichestquartersofEnglandhomesarenowsoexpensive,andrentssohigh,thatbuyersthinknothingoffurnishingtheirdwellingslikefour-starhotels;tenantspayingafortuneinrentexpecttobestunnedbythe‘quality’ofthebathroom.Eventhemostbasic
![Page 217: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/217.jpg)
ofbathroomswasnottoolongagoconsideredaluxury;havingsomewhereinsidethehometogotothetoiletwasrareinmygrandparents’youth,beforetheSecondWorldWar.Nowbathroomsinexpensiveareasareroutinelybeingremodelledasafashionitem.Inthemostexpensiveofhomesitmaybeasignthatsomethingisamissifoneofthemanybathroomshasnotbeenredecoratedwithinthelastthreeorfouryears.Perhapspeoplerestylingtheir
fixturesandfittings,toiletsandtowelrails,shouldbetakenasasignthatsomethinghasgoneverywrong.Renovationaccelerationoccurswhenlocalhousingmarketsbegintooverheat.Oftentheselocalbuyingfrenzieswerefuelledbymuchthe
![Page 218: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/218.jpg)
samecheapmoneyasthatwhichfuelledsubprimeUSmortgagegrowth.Duringthisperiod,whenhousingpricesrosequickly,rentscouldrisequicklytoo:highrentslooklessridiculoussetagainstasupposedlyhighhousingpriceforwhatwereonce‘normal’homes.TheUKhasnothadtheworst
housingcrisisintherichworld,butithasbeenbadlyhitbythecrisisbecausesomuchoftheUKeconomyisreliantonhousing.InEuropethehousingcrashhasbeenmostabruptinSpainandIreland.TheblameforthecrashinIrelandispartlyassignedtothegovernment,whichmadethedecisiontobailoutthebanks,butitisalsolaidatthedoorsofthebanksthemselves.
![Page 219: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/219.jpg)
TheIrishhousingbubblewasinitiallyinflatedthroughthegreedofbankers,buildersanddevelopers;leftuncheckedbygovernment,itgraduallyinfectedtheentirecountry,andtheCelticTigerwentfrombeingatermofpraisetoapejorativeterminamatterofjustafewyears.Althoughthebubblemayhavebeeninternallygenerated,itrequiredoverseasmoniestoblowituptothesizeiteventuallyreached.Muchofthismoneycamefromoverseasbanks.InMarch2013theveteranUSacademicNoamChomskyputitbluntly:‘thehousingbubblewhichwasfuelledbySpanishandindeedGermanbanks–youknowtheywerethelenders–wentwayoutandcausedagreatcrisisforwhichthepublicisnowpaying.’14
![Page 220: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/220.jpg)
InternationalobserversuseIrelandtoillustratejusthowfastandhowfarahousingmarketcanfall.CommentatorsinIrelandappeartobemovingonfrompointingthefingerofblame,however,becausefixingtheproblemisfarharderthanidentifyingwhereitbegan.Theyallacceptitbeganwiththefartoocosyrelationshipsbetweenbanks,builders,developersandgovernment.Bycontrast,intheUK,blameforthelongeconomicrecessionisattributedbythecoalition(andbymanyontherightofthecommentariatincludingmostofthepress)toNewLabourgovernmentspending,nottothebankers.ThisisdespiteUKgrossdebtbeingverylowunderthatNewLabourgovernmentjustbeforethe
![Page 221: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/221.jpg)
crisisbegan.In2007accumulatedgovernmentdebtwasjust47%ofGDP,incomparisonwiththethenOECDaverageof73%,andtheannualdeficitwasjust2.7%ofGDP.15ByMay2013,afterthebankshadbeenbailedoutandasthecostsoftherecessionweremounting,accumulateddebtwas75%ofGDP,or£1.2trillion.16Andtheannualdeficithadbecomethreetimesasbigasin2007.17Britainlostitstriple-AcreditratinginFebruary2013,thefirstsuchlosssince1978.18
ThewishofthoseontherighttoattributeBritain’scurrenthousingproblemstothelastgovernmentmayberesponsibleforareluctancebytheBritishpresstocoversimilarproblemswhentheyareseeninother
![Page 222: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/222.jpg)
countries.PerhapsthisreluctanceisalsolinkedtoafearthatwhathashappenedtohousingpricesinSpain,Irelandandelsewherecouldstill,atleastpartly,happenintheUK.WetrynottotalkabouttheproblemsoccurringelsewherebecausewewanttothinkthattheBritishhousingmarketissomehowimmunetoevengreatervolatility.SomanypeopleinBritaindon’twanttothinkoftheconsequencesofthepricebubbleburstingthattheydon’tevenlooktotheirnearestneighbour,Ireland,tolearnfromthatcountry’sdebatesaboutwhoisnowgoingtoshoulderallthedebtincurredbythepropertybubbleoftheCelticTigeryears.19
HOMETRUTHS
![Page 223: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/223.jpg)
Itdoesindeedatfirstsightseempossiblefortheearthtobecometheexclusivepossessionofindividualsbysomeprocessofequitabledistribution.‘Why,’itmaybeasked,‘shouldnotmenagreetoafairsubdivision?Ifallareco-heirs,whymaynottheestatebeequallyapportioned,andeachbeafterwardsperfectmasterofhisownshare?’
–HerbertSpencer,eugenicistandEconomistmagazine
subeditor,185120
Onehundredandfiftyyears,ortwolifetimes,ago,leadingthinkersspeculatedoverthepossibilityoflanddivision(SpencerintheUK),landtax(HenryGeorgeintheUS),nationalization,communism,andtheconceptofpropertybeingtheft.Housingwasslowlyimproved.Aroundseventy-fiveyears,oronelifetime,ago,acrossalmostallthe
![Page 224: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/224.jpg)
richworld,wespentmuchlessofourannualincomesonhousing.Forexample,eveninNewYorkCity,thenfarmorecrowdedthanitistoday,householdsspent32%oftheirincomeonhousingin1933–4,includinglightingandheatingtheirhomes.By1950housingcostshadfallento28%ofhouseholdincome;butby2002–3thatcosthadrisenagain,to38%,21exceedingthecostsofthe1930s,justasincomeinequalityintheUSnowexceedstheveryhighlevelslastrecordedatthattimetoo.22Iwouldsuggestthatitispartlybecauseincomeinequalityisnowsohighthathousingagainconsumessomuchofmostpeople’sincomes.TheUKistheEuropeancountry
thathasfollowedtheUSpatternof
![Page 225: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/225.jpg)
inequalities–risingabruptlysince1980andreachinghistoricallyhighlevelsinthepresentday–mostclosely.Asaresultpeopleonnear-averageincomescantodayfindtheyhaveverylittletogetbyon,despitebeinginthemiddle.TheBBCtooktheexampleofacouplewithachildlivingon£22,000ayear,aroundthemedianlevel,andfoundthatinathirdofEnglandtheywouldhavehadtopayoutatleast35%oftheirannualincomeonhousingcostsiftheyrented,evenfortheverycheapestrentalpropertyinthearea.Alternatively,iftheytookoutamortgage,afterhavingsavedorbeengiven£20,000,inalmost30%ofdistrictsinEnglandtheywouldnotbeabletoaffordeventhecheapestpropertyonthemarket.23
![Page 226: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/226.jpg)
Today,inabadyear,foryoungeradultshousingcostscaneasilyconsumeoverhalftheirtake-homepay.Paytendstobemuchlowerfortheyoung,andthemajorityofthebestjobopportunitiesformanyyoungadultsareconcentratedinthemostexpensivepartsofthecountryinwhichtolive.Sadly,theyounghavebecomeusedtobeingexploited,takingonhugedebtandtryingnottothinktoofarintothefuture.Withoutthememoryofdifferent
times,theextremesoftodaycanappearnormal.Furtherdown,towardsthebottomofthehousing‘market’,afewlandlordsbecomeveryrichasthestateindirectlypaysthemwelltoprovidewhatisoftenashoddyservice.IntheUK,where
![Page 227: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/227.jpg)
housingbenefitpaymentsendupwiththelandlordsandwhererentcontrolsremainalmostnon-existent,afewpeopleareprofitinggreatlyduetothemiseryofthemajority.Itisbecauseoftheseprofits,andtheintenseinterestincontinuingtosecurethemamongthemostpowerful,thattheclamourforchangethatalreadyexists,butthathasnofocus,isconsistentlyrejected,dampeneddownorignored.Whatishappeningisnotasimple
caseofdemandoutstrippinghousingsupply.Youjusthavetocounthowmanyhomesthereareinrelationtothenumberofhouseholds.Throughoutthedevelopedworldtherehasneverbeenmorehousingthanthereistoday:wehave–intheory–morebedrooms,more
![Page 228: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/228.jpg)
squaremetresperperson,morespacetolivein.24Youhavetokeeponasking:ifthereisallthisspaceavailable,whydowehaveaproblem?Ihopeitisalreadyclearthatthis
bookis,ineffect,concernednotwithanabsolutelackofhousing,butwiththeproblemofhowthathousingisdistributed,andofhowtogetherwemightbegintosolvetheproblemofapparentlyeverincreasinginequality.Ultimatelyitisabouttheneedtocontrolgreed.Housinghasbeentransformedintoaverybadlyregulatedmarket,andthislackofregulationinevitablyallowssometotakeadvantage.Markets,whentheyhaveworked,havealwaysreliedonregulationinordertopreventthegreedyfromtakingundueadvantage.
![Page 229: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/229.jpg)
IntheUKrecentgovernmentshavepromotedakindofwinner-takes-allcapitalism,proppedupbyaone-choice-then-you’re-outhousingallocationpolicyforthepoor.Mostsocialhousingtenantsaremadejustoneofferofhousingonatake-it-or-leave-itbasis,andthatappliesonlytothosefamilieswhomtheauthoritiesareforcedtohousebylaw,mostlythosewithchildren.InEnglandalonemillionsofpeopleareonthewaitinglistforsocialhousing.Inthe1990slessthanamillionhouseholdswerewaitingforthecounciltohousethem,butby2008thatfigurehadreached1.8million;thecountisnowabovetwomillion.25Onehouseholdhasbeenonthatlistforfifty-sevenyears.26IntheUKasawhole,therearean
![Page 230: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/230.jpg)
estimated600,000peopleofficiallyregisteredashomeless,27whileatleast240,000peoplehavenowreliedonsquattinginoneformoranothersothattheycanavoidbecomingstreethomeless.28
Homelessnessisbecomingoneofthedefiningissuesoftheprotractedfinancialcrisis.StreethomelessnessintheUKroseby17%between2008,atthestartofthecrisis,andtheendof2011.29Totalhomelessnessthenroseby26%inthetwoyearsafterthat.30By2013itwasestimatedthat20,000to50,000peoplewerecurrentlysquattingintheUnitedKingdom,occupyingbetween2%and4%ofemptycommercialpropertiesandfarfewerofthe737,500emptyresidentialproperties.
![Page 231: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/231.jpg)
Itisestimatedthattheseemptypropertiesalonecouldhousetwomillionpeopleiffullyoccupied.31
Manyofthesepropertiesareemptybecausethey’resimplybeingtradedforinvestmentpurposes,andnotforpurposesofactualuse.ItistruethatthereareworsestoriesfromafewplaceselsewhereinEurope,wheresquattinghasbecometheonlywaytoliveforfamiliesinsomeareas,32
butevenmoreshockingtalesemanatefromNorthAmerica,wheresomanyfamilieshavebeenevictedfromtheirhomesinrecentyears.
![Page 232: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/232.jpg)
![Page 233: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/233.jpg)
Buildingslabelledas‘anexclusivedevelopmentof2,3and4bedroomhomes’,
currentlyunderconstructioninSheffield.Home-buildingiscontinuingin2012–14,butatamuchslowerpacethanbefore.Homesarestillmainlybeingbuiltforsaleataprofitandarestillveryoftenbeingmarketedwiththesuggestionthatbuyingnewpropertywillhelpyoutoelevateyoursocialstatus.Theimplicationisthatby
movingtosomewhere‘exclusive’,youwillalsobecomemoreexclusive,moreposh.Theseapartmentsarestyledwithold-fashioned
chimneys,moreforeffectthanforuse.Manyaremarketedasinvestmentopportunitiesforbuy-to-letlandlords,torentouttowhoeveriswillingtopaythehighestrent.Again,thesupposedsocialcachetofhavingtherightaddressispresentedasajustificationforchargingthehigherrent.Suchschemescanappeargoodfortheindividual,butnotgoodforsocietyasawhole:theydevaluealltheareasthatarenot‘exclusive’,which(theadvertisingimplies)youshouldtrytoavoid
livinginifyoupossiblycan.
Akeyreasonwhythehomelessandsquattersreceivesolittleattentionisbecausesomany
![Page 234: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/234.jpg)
politiciansownsomanyhomes.Oftentheyclaimtheyneedtobecauseoftheprecariousnatureoftheirjobs,butroutinelyminormembersofparliamentinBritain,andthecongressinAmerica,areembarrassedwhentheirhome-ownershiplevelsarerevealed.Becausethisbehaviouroftenspanspoliticaldivides,itcurtailsdebate.Toomanypoliticianshavea
vestedinterestinnotwantingtotalktoomuchabouttheirvestedinterests.InBritainthisproblemwaswidelydiscussedin2001whenthephrase‘TwelveHomesMeacher’,concerningtheproperty-buyinghabitsofaministerintheLabourgovernment,firstappeared.Hispropertyportfoliomaynotnumberexactlytwelve,ofcourse,because
![Page 235: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/235.jpg)
‘MrMeacherdoesnotwanttocomecleanonexactlyhowmanyhomesheowns.Hisentryintheregisterofmembers’interestssaystersely“FlatsletinLondon”.’33Whenbothpoliticalpartiesarecursedbythisproblem,itbecomesclearthatitiswidespread.However,itisinAmericanexamplesthatwecanmostclearlyseehowbothprofiteeringandtheembarrassmentoverprofiteeringgorighttothepoliticaltop.Justasthehousingmarketcrash
wasbeginningtogainspeedintheUS,in2008,SenatorJohnMcCainwastheRepublicannomineeforPresident.SenatorMcCainmadeanerrorthatDavidCameronwouldrepeatintheUKtwoyearslater.UnlikeMrMeacher,however,neitherCameronnorMcCainwas
![Page 236: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/236.jpg)
honestenoughsimplytosaythathedidnotwishtosay.Instead,whenasked,bothrepliedthattheycouldnotrecallhowmanyhomestheyhad.McCaincameoverasthemoreplausibleofthetwo,ashehadagreaternumberofhomestorememberthanCameron.TheDemocraticPartycandidate
forPresident,thethenobscureBarackObama,reporteditlikethis:
Thentherewasanotherinterview,wheresomebodyaskedJohnMcCain,‘Howmanyhousesdoyouhave?’Hesaid,‘I’mnotsure,I’llhavetocheckwithmystaff.’Truequote!Sotheyaskedhisstaffandtheysaid,‘Atleastfour.’Bytheway,theansweris,John
McCainhassevenhomes.34
UnfortunatelyforMcCain,sevenhomeswastoohighanumberforapresidentialcandidatein2008,ayear
![Page 237: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/237.jpg)
inwhichmanyvotersfacedpossibleevictionintheaftermathofthecrash.Hedidnotappeartohaveanyconnectionwiththeordinaryvoter.What’smore,hisstaffhadbeeneconomicalwiththetruth.Obama–who,untilhemovedintotheWhiteHouse,hadhadonlyonehome–had,understandably,underestimatedMcCain’spropertyholdings.TheNewYorkTimeslistedtenpropertiesheldinMcCain’sname.35
WhenMcCainwasmakinghisgaffeabouthisgaffs,andclaimingtobeunsureaboutthenumberofhomeshehad,millionsofotherverydifferentAmericanswerebeingmadehomeless,oftenwithinonlyafewmonthsofdefaultingontheirmortgages.Thetermforbeingbehindonyourmortgagepayments
![Page 238: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/238.jpg)
is‘mortgagedelinquency’intheUS;intheUKitis‘mortgagearrears’.TheUScrisisinhousingresultedinalegalconveyorbeltofrepossessionorders,whatcametobecalled‘anevictionmill’.Thenumbersofthosewhowereputthroughthatmill,aswellasthosewhofearedtheymightbe,roserapidlyintheyearsupto2013.Laterinthisbooksomeofthe
connectionsbetweenhousingandhealtharediscussed,butitisworthstatingherethatthestressofbasicissuesconcerninghousinghasgreatlydamagedpeople’shealthacrosstheUS.Indeed,overallUSlifeexpectancyfellin2008.Thatfallisnowthoughttobeasmuchrelatedtothe‘evictionmill’asitistoanyotheraspectsofthecrash.36Thereis
![Page 239: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/239.jpg)
growingevidencethatthecrisisisverybadforhealthinmanyways,possiblyleadingtothefirstfallinlifeexpectancyintheUKtoberecordedsincethe1930s.Thisdoesn’tnormallyhappeninaffluentcountriesoutsideofwartime,37
furtherevidencethatthesearenotnormaltimes.Whatthehousingcrisisdoes,
morethananyothertypeofsocialcrisis,isaffectentireneighbourhoodsandcities.Hugenumbersofpeopleareharmed.Thisharmoccursbothwhenhousingbecomestooexpensivetoaffordandwhenitplummetsinvalue.Whenonehomeisabandoned,peoplelivingallarounditworryaboutwhatmighthappentotheirstreet.Whenastreetisabandoned,peopleworryaboutthe
![Page 240: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/240.jpg)
neighbourhood.Whenaneighbourhoodappearslargelyabandoned,whennoonecansell,peopleworryaboutthetown.AndwhenatownaslargeasDetroitgoesbankrupt,peopleworryaboutothertowns.InJuly2013thatcitystoppedissuingdeathcertificatesbecauseitcouldnotaffordtobuythepapertoprintthemon.38Itreallyhadgonebankrupt.Atthetimeofwriting,nooneknowshowlongitwillbebeforeitissolventagain.Fromthesubprimelendingcrisis,
totheforeclosureepidemic,tothebankruptcyofentirecities–asthingshavegotworse,governmentshaveinsistedtheywouldsoongetbetter.TheoveralleconomicsituationdeterioratedintheUSbecauseafewsoughttomakeexcessiveprofits
![Page 241: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/241.jpg)
fromlendingandreceivinginterest.Inthosecountrieswithintherichworldwherepeoplearebesthoused,thereareusuallyquitestrictcontrolspreventingthefewfrommakinghugeprofitsattheexpenseofthemany.Thesameistrueofthoseaffluentcountriesthathavethebestresultsintermsofoverallhealthandeducationaloutcomes.Ingeneral,itisnothowmuchis
spentonhealthoreducationorhousingthathasmostinfluenceonwhetherapopulationiswellcaredfor,orwelleducated,orwellhoused,buthowthatspendingisspreadaround.39Affluentcountriesreportbetterhealthandeducationoutcomeswhentheirresourcesaremoreevenlydistributed,andthesameistrueforhousing.
![Page 242: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/242.jpg)
Oftentheevidencethathousingissuesareattheheartofmanysocialproblemsisonlycircumstantial,butratesofimprisonment,theproportionsofchildrengivenupforadoptionandmanyotherindicatorsofsocialstrifearehigherwhereitishardertobehoused.By2008,136,000childrenayearwerebeingadoptedintheUS,15%morethanin1990.40Over2.2millionpeoplewereimprisonedintheUSby2008,41upfrom1.1millionin1990.Thesefiguresdwarfthoseofothernations.Perperson,onlyRwandaimprisonsmorepeoplethantheUSandthenonlyifprisonersofwarareincluded.42
Ifwewanttofeelsecureaboutoursocieties,cities,neighbourhoodsand,moreprecisely,thehomeinwhich
![Page 243: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/243.jpg)
welive,weneedsomebetterchoicesandgreateroverallfreedom.Weneedtobeabletorentwherewewanttolive,butalsotobeabletobuywhenandwherethatmakessense–butneverwiththeintentionofprofitingthroughtheownershipofbricks,mortarandland.Profitsmadeoutofsecuringessentiallivingstandardshaveatendencytoreduceoveralllivingstandards.Oneperson’shousingprofitis
another’scostandmisery.Theprofitwillbequicklyassimilatedandlargelyforgotten–quietlyacceptedlikeaccidentallyacquiredill-gottengains–butthemiserymaybefeltforalongtime.Thus,inaggregate,wearebetteroffwhenhousingismademorelikehealth,insteadofleftasanarenaforprofiteering.Perhapsmany
![Page 244: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/244.jpg)
oftoday’sestateagentswillonedaybeviewedmuchasthewaywenowviewpeoplewhosoldsnakeoilorwhoperformedotherformsofquackeryinmedicineinthepast.Nodoubtthequackssaidtheywereprovidingavitalservice,andsomemayhavebelievedthattheywere,butmostpeopletodayagreethatwearebetteroffwithoutthem.Wewillalwaysneedpeopletohelparrangehowwearehoused.Butweneedpeoplewitheveryone’sbestinterestatheart,notwhatmightbestlinetheirortheirfirms’pockets.Whereverweliveweneedtosee
newrulesintroducedoroldonesrestoredintheinterestsofthevastmajoritywhodonotownmuchofthenationalwealth.Oldrulesthatworkedsowellinthepastandthat
![Page 245: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/245.jpg)
stillworkwellelsewheretodayincluderentcontrols.Newrulesmightbetotaxlandonthebasisofitsvalue.Ifpeoplechoosetohoardit,theycan,buttheymustpayfortheprivilege.Mostimportantarerulesaboutwealthandfreedom.Rulesaboutfreedominvolvetheprotectionandintroductionofrights.Onerightsuggestedlaterinthisbookisthe‘right-to-sell’yourhomebutstayinitasatenant.Thiswouldbeacounterbalancetothe‘right-to-buy’andawayofreducingbothevictionsandthestigmaattachedtocertainareas.Ifyourneighbourscouldstayintheirhome,evenafterhavingcompletelydefaultedonamortgage,aslongastheypaidtheirrentuponbecomingtenantsinthesameproperty,woulditstillbeworthwhile
![Page 246: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/246.jpg)
buyingina‘posh’area?Wouldposhareasstayasposhifpeopledidnothavetoleavesuchneighbourhoodssoquicklywhentheyfellonhardtimes?And,ifsuchareasbecamelessposh,wouldprospectivebuyersbequitesowillingtospendafortunetolivethere?
![Page 247: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/247.jpg)
![Page 248: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/248.jpg)
GleadlessValleytowerblocks,asseenfromMeersbrookAllotments,inSheffield.These
towerblockswerebuilttoreplaceslumhousing–afactthatisoftenforgottentodaybythosewhoviewthemasaneyesore.However,comparedtowhattheyreplaced,thetowerblockswereanimprovementinthelandscape.High-densitylivingallowsspacestobeleftopenandgreen,
andsuchbuildingsareoftenprizedinmanycitiesintheworld.Towerblocksbecomeaneyesorewhen,inapolarizingsociety,theyareviewedasthehomesofpeoplewiththeleastchoice.Towerblockssimilartothese,butoverlookingaparkin
centralLondon,areregardedasprimeinvestmentsontheworldwidehousingmarket.Housingbecomesgoodhousingwhentherearemoreopportunitiestoliveagoodlifeinthespacearoundthathousing.Homesmustbedamp-free,spaciousenough,wellsoundproofed,insulatedandletinenoughlight;buttheyalsoneedtositwithinaneighbourhoodinwhichchildrenfeelsafeandcanplay,inwhichadultsarehappytolive,andinwhichtheelderlyarenottrappedin
theirhomesthroughfearoftheoutside.
Thealternativetotheintroductionofsuchnewrights,totherestorationofsucholdfreedoms,isthehousing
![Page 249: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/249.jpg)
disasterthatcomescloserandclosereveryday.
THEAPPROACHINGDISASTER
Housingisattheheartoftheeconomiccrisis,andgettinghousingrightwillbepartofitsanswer.Itisalsooneofthetoughestofpoliticalquandaries,onewhoseobviousanswerissounpalatablethatnogovernmenthashadthecouragetofaceit.Thequandaryisthis:housingcoststoomuch,butformillionsofpeople,securitydependsonthevalueoftheirbricksandmortar.
–Guardianeditorial,September201243
Formanypeople–speculators,landlordsorsimplyhomeownerswhohavebeenforcedtotakethegambleofgettingontothe‘propertyladder’–a‘housingdisaster’meansafallinpropertyprices.
![Page 250: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/250.jpg)
InNovember2012theRoyalInstituteofCharteredSurveyors’annualassessmentofthePortuguesehousingmarketranwiththeheadlines:‘Pricesandrentscontinuetofall’;‘Confidenceindexremainsquitenegative’;‘Lettingsactivityindicatorsweaken’.44InSpain,justtwomonthslater,itwasreportedthattherewerestillanestimatedonemillionhousesonthemarket,mostofthemnew-builds,allunsold.Suchaglutmeantthatpriceswereexpectedtodropafurther20%.45
AroundthesametimetheratingsagencyFitchannouncedthatitexpectedhousepricesinIrelandtodeclinebyafurther20%fromcurrentlevels.46Allthesepredictionscastapalloverthosecountriesduring2013.Whateverslight
![Page 251: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/251.jpg)
increasesinpricesdidoccurinanyareawereseenasachimera,astatisticalby-productofthelowvolumeofsales(justafewsalescouldberecordedasanindicationofapricerise),theresultofafewopulentpropertiesbeingsoldoffatlowprices.Andaspricescontinuedtofall,peoplewerelessandlesssurprised.ByAugust2013Spanishpriceshadfallenafurther9.3%,downnearly40%fromtheir2008peak.47
Noneofthishappenedoutoftheblue.Therewerewarnings,andgovernmentsdidtrytopreventhousingcrisesfromturningintosocialdisasters.Ireland’shousingmarketcrashwassaidbyonecommentatortohavebegunat10p.m.on2October2008,whenIrish
![Page 252: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/252.jpg)
home-buyerswatchingthenightlynewssawanincoherentdisplayfromthechiefexecutiveoftheFinancialRegulator:‘theysawhimandsaid,Whothefuckwasthat???Isthatthefuckingguywhoisinchargeofthemoney???That’swheneveryonepanicked.’48Themanwastryingtoreassurethem.Thegovernmentthatheworkedforwantedtheproblemsorted,butitwastoolate.Othersourcesdisagreeabouttheprecisetiming:somesaypanickingbeganafewdaysearlier,on30September,whenthebankguaranteewasintroduced–butitalltookplacewithinjustafewdays.Acrisiscanbeginthatquickly.Therepercussionsfromthoseinitialattemptstoavertdisastertookagooddeallongertofullyemerge:fouryears,infact.
![Page 253: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/253.jpg)
In2011MichaelLewis,writinginVanityFair,reportedeventsasanalmostcompletecapitulationtointernationalmoneymarketsinIreland.Hesuggestedthatwhathadmostobviouslychangedinthecountry’spoliticshadbeentherolethatbegantobeplayedbyforeigners.ForemostamongtheforeignerswastheTroikaoftheEuropeanCommission,theInternationalMonetaryFund(IMF)andtheEuropeanCentralBank(ECB),whichlaiddowntheausteritymeasuresIrelandhadtofollowifitwastoreceivebailoutfundingonceinternationalinvestorswerenolongerwillingtorisktheirmoneyfollowingthe2008crash.TheIrishgovernmentandIrishbanksby2011werecrawlingwithrepresentatives
![Page 254: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/254.jpg)
oftheTroikaaswellasAmericaninvestmentbankersand,inMichael’swords,‘Australianmanagementconsultantsandfacelesseuro-officials,referredtoinsidetheDepartmentofFinancesimplyas“theGermans”.Walkthestreetsatnightand,throughrestaurantwindows,youseeimportant-lookingmeninsuits,diningalone,studyingimportant-lookingpapers.’49Itmaynothavebeenquiteasbleakasthat,butitcertainlyfeltthatbleak.ByApril2013theTroikahadsucceededingettingDublintopublishlegislationmakingiteasierforpropertytobeseizedandforresidentsinarrearswiththeirmortgagestobeevicted.50Ironically,justfourmonthsafterthat,Irishexperts(alongsidesomeofthose
![Page 255: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/255.jpg)
nowreturnedmanagementconsultants)werewarningthatanAustralianmarketcrashmightbeimminent,givencurrentsigns.51
Nowhereiscompletelysafe.WhatoccurredinIrelandin2013
couldhavebeenverydifferent.Bylate2012theIrishseemedtohavetiredoftheforeigntechnocrats;somehadlookedacrosstheoceannorthwards,toIceland,andlearnedthattherewasanalternativetodoingwhatthebankerssayyoumustdo.Putinasimilarsituationbyaveryfewbankersandcolludinggovernmentofficials,Icelandhaddecidedtodefaultonitssovereigndebt.TodaymanyoftheheadquartersofIceland’sformerbanksremainemptyinthetinyBorgartúnquarterofReykjavik,and
![Page 256: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/256.jpg)
therehasbeenapopularrevoltagainstthebankersthere.However,theoldIcelandicbankingfamiliesremainpowerful.Amemberofonewasreportedin2011(byjournalistandwriterPeterGeoghegan)tobeoverheardclaiming,atwhathethoughtwasaprivatedinner,thatitwasstillpossibletoturnReykjavikintoEurope’sHongKong.52Bynotdoingwhatthebankerssaid,Icelandhadavoidedtheworstaspectsofpossibleausterity:bynotpayingitsdebtstorichercreditorsoverseas,itwassayingthatbondholdershadtakenarisk,thatriskhadturnedbad,andIcelandwouldnowlookathowtorecoupinternally.Iceland’sexampleinspiredmuchdiscussionandsomeprogressinIreland,and,inthelongrun,itcouldstillprovide
![Page 257: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/257.jpg)
inspirationtomanycountriesthroughouttheworld.InOctober2012theIrish
governmentannouncedthatitplannedtointroduceabillencouragingbankstocutsubstantiallytheamountthatborrowersowedontheirmortgages:aprogrammeofmassivemortgagewrite-downs,infact.TheIrishgovernmentsuggestedthatthiswasastepthatnoothermajorcountryhadsofarbeenwillingtotakeonsuchabroadscaletodealwiththecurrentcrisis.Theinitiativewasdesignedtolowereachborrower’smonthlypayments,therebypreventingatideofforeclosures,andremovingtheuncertaintythatwouldotherwisehangovertheIrishhousingmarketformanyyearstocome.TheNew
![Page 258: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/258.jpg)
YorkTimessuggestedthat‘Ifitworks,theplancouldprovidearoadmapforothertroubledcountries.’53
Fromtheoutside,itbegantolookasiftheIrishwerebeginningtotakecontroloftheirownfate.Whatwaspossiblehad,itself,changed.Butthenthebankscounteredthatanyblanketdebtforgivenesswouldresultin‘strategicdefaultamongcustomerswhocouldaffordtopaytheirmortgages’,54andtheTroikahadthemeasuresreversed.Thisdevelopmentwaslessthanayearago,however,andwedonotknowhowthisstorywillend.WedoknowthatanentiregenerationinIreland,andtheirchildren,willnevertrustbankersanddevelopersagain.Itiswhenwhatispossible
changesthatrealchangebegins.Real
![Page 259: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/259.jpg)
changeisnotchangewithinanexistingsetofparameters.Itisnottheraisingandloweringofinterestratesorthebuildingofafewstatesubsidizedhomes.Realchangecamewhenitfirstbecamethestate’sbusinesstobuildhomes.Itcamewhenpeoplefirststartedtogambleonpropertypricesrisingmoreandmore,andso,foratime,theydid.Itisthehousinglandscapeitselfthatwillchange,notjusttheseasonalfeatureswithinit.IftheIrishgovernmentdoesintroducealandtax,thiswillmakeasimilarfuturetaxintheUKmorerealizable.Alandtaxmeansthereislesseconomicsenseinonefamilyowningasmanyhomesandasmuchlandaspossible,asitbecomesmoreexpensivetoownmorethanyouneed.Afterthetax
![Page 260: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/260.jpg)
hasbeenapplied,housingwillbevaluedmoreforits‘use’thanforits‘exchange’value.Itisanexampleofwhatoneeminentacademicgeographercalls‘apost-capitalistimagination’.55Itiswhatmanywouldcallcommonsense.Sadly,foreveryoptimisticturn
reportedinIcelandorIrelandorelsewhere,therealwaysappearstobesomebankersittinginthecornertryingtopreventitstakingplace.InIrelandthegovernmentdecidestoforgivemuchdebtandpreventevictions;theTroikastepsintodemandthelawischangedbackagain.InthecaseofIcelanditwastheoldrichfamiliesandthemanPeterGeogheganoverheardtalkingatthatdinneraboutturningReykjavikintoafinancecasinowho
![Page 261: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/261.jpg)
aretryingtosubvertthewillofthemajority.InIrelandthebankers,thefirms
andtheoldrichfamiliestowhichtheyaremostcloselyconnectedarealsoresponsible,notjusttheTroikaandthecreditreferenceagencies.ProfessorRobKitchinandhiscolleaguesfromtheUniversityofMaynoothfoundthatthesegroupsweresubvertingattemptstorealigntheIrisheconomy.OncloserinspectionbythoseIrishacademics,someoftheIrishgovernment’srecentapparentboldnessappearstoproveillusory.Whatthegovernmenthasactuallydone,theresearchersfromtheNationalInstituteforRegionalandSpatialAnalysissuggest,istohavekeptmanydevelopersandspeculatorsin
![Page 262: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/262.jpg)
business.Thesewerethepeoplewhohadbeenresponsibleforinflatingthepropertybubble.Alongwiththebankstheyhad‘blockedthegrowthofmoreresilientplayersornewstart-upsinthewakeofthecrash,whilstdoinglittletoprotecthomeownersandtenantsstrugglingtopaymortgagesandrent’.56Thusthereismuchscepticismaboutsomeofthelatestmovesbeingproposedandabouttheactualintentofmanyingovernment.Movestoallowborrowerstopaybackalittlelesswerepartlyseenasmoreofthesame,notyetasea-change.Butasea-changeispossible,andhere,possiblyanddespiterecentset-backs,Icelandstillleadstheway.Therewillalwaysbesmallcohortsofvestedintereststryingashardas
![Page 263: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/263.jpg)
theycantoreturntobusinessasusual.Sometimestheywillsucceed.Butnowthereareincreasingnumbersofjournalists,writers,activistsandacademicslookingmoreandmoresceptically,inwaystheyhavenotlookedbefore,atanarea–housing–forsolongconsideredhumdrumandboring.Allthisattentionismakingitfarharderforthecorruptionofthepasttocontinueunchecked.InIceland,unlikeinIreland,the
governmentallowedthecountry’slargestbankstofailafter2008.Atthesametime,debtreliefwasawardedtohouseholdsindifficultieswiththeirmortgagesandlocalbusinessesfacingbankruptcy.Ascepticmightsaythatthisisjustkeepingafirmthatshouldfailtostay
![Page 264: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/264.jpg)
inbusiness,buttimewilltellwhichpoliciesarebest.On8June2012twoformerbankingexecutivesoftheByrSavingsBank,JonThorsteinnJonssonandRagnarZophoniasGudjonsson,weresentencedtofourandahalfyearsinprisonbyIceland’sSupremeCourt,havingbeenfoundguiltyofcommittingfraud.ThiswasamajorstepforwardinEurope.However,theformerPrimeMinister,GeirHaarde,wasgivennopunishment,evenwhenfoundguiltyofhavingnotconvenedenoughcabinetmeetingstoproperlymonitorthesituation.57
ThereweredownsidesaswelltoIceland’spartialdefianceofourcurrentbankinghegemony.Inflationrecentlyreachedalmost20%inoneyearanditremainshigh,but
![Page 265: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/265.jpg)
inflationusuallyreducestheinequalitybetweenthosewhohavenothingandthosewhohavethemostwealth.However,inflationcanalsoincreasethecostofhousingformany,bringitupandoutofproportionwithearnings.Thebestinflationisinflationinthepricesofthingsyoudonotneed,inthepricesofluxurygoodssuchasoverseasholidays,expensivejewelleryandfastcars.TherewerealsocostsforBritain
whenIcelandchosetobedeviant,whichcouldbeaportentofwhatmightoccurifanyofGeorgeOsborne’snewmultibillionpoundinternalUKloans,mortgageandbankdepositguaranteeseverhavetobecalledupon.TheBritishgovernmentbailedoutUK
![Page 266: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/266.jpg)
speculatorsintheIcelandicbanks,whichincludedanumberofEnglishlocalauthoritiesthathad‘invested’theirdepositstotrytomaximizeincomes.TheBritishalsolentheavilytoIreland,toenablethegovernmenttoguaranteealldepositsheldinfailedbanksthere(thiswasinadditiontotheTroikabailout).In2010theBritishgovernmentlentIreland£3.2billion;in2011itcuttheinterestrateonthatloan;andinDecember2012thatcutwasmaderetrospective,sothatafurther£7.7millionlessinteresthadtobepaidbacktotheUKthatmonth.Noexplanationwasgivenastowhythiswasdone,otherthanthat‘Thelinksbetweenourfinancialsystems,particularlyinNorthernIreland,meanthatthereisastrongeconomic
![Page 267: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/267.jpg)
casetoprovidefinancialassistancetoIreland.’58CouldIrelandreallynotaffordasumjustshortof€10million?Wasitthatclosetobeingbankrupt?InmanywaysBritainhasbeentryingveryhardtomaintainbusinessasusual,notjustwithintheUKbutalsonearby.Perhapsthiswaspartlyduetofearsoverthepound.Or,morelikely,duetofearofwhatagreaterbankingcollapseinIrelandmightmeanfortheUKhousingmarket.ThemarketinthesouthofEnglandwaslikeafragilehouseofcardsthatcouldbeupsetatanymomentbyanearbyhouse’sfall.IfIrelandhadcopiedtheIcelandic
responsetothecrisisearlyon–hadnotguaranteedallsavers’deposits,nomatterhowlarge,hadnotacceptedtheTroika’sintervention
![Page 268: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/268.jpg)
andhadthen(wheneventhatwasnotenough)notacceptedadditionalloansfromtheBritishthathadtoberepaidby2020,albeitatlowerandlowerinterestrates–thegreateconomicchaosinthatcountrymightveryeasilyhavespreadovertheborderandacrosstheIrishSea.Ireland’sbeingwithintheeuromayhavemadeBritishsupporteasier.AttheendofthedayallthesupportthatwasextendedtoIreland–fromwithintheeurozone,fromtheTroikaand,eventually,fromtheBritish–didnot‘save’IrelandbutratherresultedinaveragehousepricesinIrelandfallingto60%oftheir2006valueby2013;inmostcasesthiswasunderhalfwhattheyhadbeensellingforattheir2008peak.ByNovember2013claimswere
![Page 269: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/269.jpg)
increasinglybeingmadethattheIrishhousingmarkethadfinallybottomedout,butevidenceofstabilityhadyettobeamassed.59
EvenwhenIcelandichousingpricesaremeasuredineuros,thefallssincethepeakhavebeenlessinIcelandthanineitherIrelandorSpain.60
ItisremarkablethatSpain,IrelandandIcelandaresolittlediscussedinBritain,whentheyarenearbymodelsofthechaosthatcansoeasilycometohousingmarkets.Godirectlysouthin2013andpricesarestillfallinginSpain;godirectlywestandwecannotevenbesuretheyareyetflat-lininginIreland;gonorthandthefirstcountryyouhitisIceland,whoserecenttalestheUKalsodefiantlyignores.AlltheseexamplesshouldcausetheBritishtobemore
![Page 270: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/270.jpg)
cautious;ifonlywewerenotsoinsular.Atseveralpointsduringthelast
fewyearstheIcelandickrónafellinvaluetoroughlyhalfitspreviouspeak.Thepoundhasfallenbyhalfthatamount,butacomparisonisnevermade,andwehearfewdiscussionstodayofpossiblerunsonthepound.WeneedtolooktoIcelandtoknowwhatthatwouldmean.InIcelandthecostofimportsconsequentlydoubledandcurrencycontrolshadtobeestablishedin2008,afterthecollapseofthekróna,tostopthewealthymovingtheirmoniesabroad.TheBritisheventriedtouseanti-terrorlegislationtogetsomeofitsownspeculators’moniesout!Whenthefullstoryofthecrisisisfinallyrevealed,Britain
![Page 271: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/271.jpg)
maywellnotcomeoutofitwell,butmayinsteadbeseenasthecountrythatstoodmostsquarelybehindtheinterestsofthebanksandthosewhohadmosttolose:thewealthy.MeanwhilethepeopleofBritain
carriedonborrowinglargelyinignoranceofwhathadsorecentlybeenhappeningaroundthem.Theycouldseenoalternative.Britainissuchasociallydividedsocietyand,formost,theonlywayintothetophalfisthroughtryingtobuyahomeintherightplaceattherighttime.HomeownershipstatusandsocialclassarealmostoneandthesamethingintheUKtoday.Usuallythemiddleclassbuyandeventuallyown;theworkingclassrentorbuybutthenriskdefaulting.
![Page 272: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/272.jpg)
NotalliswellinIceland,butatleastitisoneislandwheretheyareallinittogether.AsProfessorofEconomicsattheUniversityinReykjavik,ThorolfurMatthiasson,explains,theIcelandershavebeenlookingaftertheirown:‘Takingdownacompanywithpositivecashflowbutnegativeequitywouldinthegivencircumstanceshaveadominoeffect,causingotherwisesoundcompaniestocollapse…Forgivingdebtunderthosecircumstancescanbeprofitableforthefinancialinstitutionsandhelptheeconomyandreduceunemploymentaswell.’61
Incontrast,inBritain,firmsbegantogotothewallandmanyhousingprojectsstalledwhenthecrashcamein2008,andtherewaslittlesubsequentdebtforgiveness.
![Page 273: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/273.jpg)
ItisnotjustIceland,Ireland,andSpainfromwherewecanlearnlessons.PortugalisthemostsimilarcountryinEuropetotheUKintermsofincomeinequalities,andtherethemarkethasalsocollapsed,sotheimpactonasimilarlysociallydividedsocietycanbeseenfromthatexample.HousingmarketsinItalyandGreecehavealsobeenthrownintochaosalongwiththerestoftheperipheralregionsofEurope.But,incontrast,andatexactlythesametime,althoughnowatEurope’score,itisreportedthatinfarmoresociallyequitableGermanyhousingpriceshaveincreasedsharplyoverthelasttwoyearsbecauseinvestorsarelookingforsolidreturnsandsafehavensinthemidstoftheeurocrisis,andthinktheywillfindthemthere;
![Page 274: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/274.jpg)
but,indoingso,theymayjustbehelpingtobringaboutexactlythesituationtheyweretryingtoavoid.62
RisinghousingpriceswithinpartsofGermanyhavecaused‘somepeopletoworryabouttheformationofabubblethatcouldcollapseiftheGermaneconomyfalters’.63Theoldmodelsofspeculationandaccumulationappeartobefaltering,eveninwhatisseenasthesolidcoreofEurope.Thisisbeginningtospreaddisquietwhererecentlyallhadappearedmostsolid.InGermanywagesmayonaveragebehigher,butaquarternowliveonlowwages,and,thoughunemploymenthasfallen,temporaryemploymenthasincreased.64Divisionstherearerising.Buttheyhavealongwaytorise.Inequalitiesarenothinglike
![Page 275: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/275.jpg)
theyareinBritain,wherepeoplearepaidfarlessinlargenumbersandunemploymentismuchhigher.InBritainin2013youcouldbuyaterracedhouseinarundownpartofStokeonTrentfor£1,whilethegrandestterraceinthelandwasbeingputonthemarketat£250,000,000.65AlmostnooneinBritainisshockedbysuchdivisionsanymore.Buttheyshouldbe,becausetheydonotbodewell.Thecontextweareintodayisone
inwhichthereislittlecertaintyandasenseofrisinginsecurity,evenattheheartofEurope.Attheperiphery–fromCyprustoMalta,throughGreece,Italy,Spain,Portugal,andupthroughIrelandtoIceland–thereismoreuncertaintythaneverbefore.Somefifteenpoliticalparties
![Page 276: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/276.jpg)
contestedtheelectionsinIcelandinApril2013,twiceasmanyasatthepreviouselection.Thecentre-rightpartiesregainedcontrolbypromisingnottoseekshelterintheeuro,andthePiratePartywonitsfirstseatsinanynationalelectionanywhereintheworld.Icelandisstillinsomeobviousdisarrayandappearstobeoscillatingpoliticallyfromlefttorightagain.However,itisnowlookingatrelativelystablehousingpricesandrents.Theyareneitherrisingnorfallingbuthavesettled–notaslowasthefallselsewhereinEurope,butmuchlowerthananypricefallsrecordedsofarintheUK.ThecostoflivinginIcelandremainsexorbitantduetohighimportcosts,butmaybealessonhasbeenlearnedaboutspeculationthatwillnotbe
![Page 277: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/277.jpg)
forgottenquickly,atleastnotforageneration.Perhapspartlyasaresultofwhat
hashappenedinIceland,itismainlyinthemostaffluentpartsofGermanywherehousingpriceshaverisenmostquicklyrecently,especiallywhere‘crisis-riddenGreeks,ItaliansandSpaniardsbuylikecrazy,the“concretegold”thatsomeGermanreal-estateisassumedtorepresent’.66Again,itisworthrestatingthatalessonontheerrorsofspeculationissoontobelearnedwhereitisleastexpected,intheveryheartofEurope.And,ifyouthinkthatistoomuchJeremiah-styledoom-saying,thenwhataboutLondonandthesouth-eastofEngland?
![Page 278: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/278.jpg)
InmanywaysmoreakintoGermanythanIreland,partsofsouth-eastEnglandwereexperiencingwhatappearedtobearenewedpropertyboomasIwaswritingthisbookin2013.Toexperienceaboomyouhavetobelievethatacrashisnear-impossible,oratleastenoughpeopleneedtobelievethat.Butsimultaneously,alongsidepricesrisinginthesouth-east,theBritishperiphery,liketheEuropeanperiphery,continuedtoseemosthousingpricesfall.Somefallswereverylarge:14.6%intheyeartoJuly2013inPowysand2.2%forthewholeofWales.NorthernEnglandsufferedsimilarfallsinparticularlydepressedareas.67
![Page 279: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/279.jpg)
PerhapspeopleinthesouththinktheynolongerliveinthesamecountryasthoseinNewcastle,LiverpoolorStoke?Orperhapstheyfeeltheyhavenochoicebuttobuyateverinflatingpricesandpraythattheyhavenotjustboughtatthewrongtime?Butdopeoplereallyhavenochoicebuttospendmostofwhatwouldotherwisebetheirdisposableincomeonrentormortgagerepayments,justtohaveagoodjob,ortoliveneartheirfamilyandfriends?WhatdoUKpoliticianshaveto
sayaboutthesituation?TakeonewithaseatinthenorthbutleadingapartywhosesupportismostlylocatedinthesouthofEngland.Duringtheleadershipdebatesintherun-uptothe2010UKgeneral
![Page 280: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/280.jpg)
election,LiberalDemocratleaderNickCleggsaidthattheissuesmostpeopletalkedabouttodoor-steppingpoliticiansconcerned‘thecostandavailabilityofhousing’.68YetCleggsoonfollowedinthetime-honouredtraditionofMPs,who,aftergainingoffice,failtosuggestsolutionstotheproblemstheyacknowledgewhileinopposition.HousinginBritainisunlikelyto
begreatlyimprovedbyincrementaladjustmentstoexistingpolicies.Actingagainstanyminorbeneficialmeasuresaretheforcesofspeculationandaccumulation,ofafewtryingtogetrichquicklythroughproperty.IfyouthinktheremainingpowersofwealthyvestedinterestsinIcelandorIrelandareaproblem,justimaginewhatabrake
![Page 281: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/281.jpg)
onprogresstheCityofLondonremains.Whenitcomestointernationalfinancialpolicy,itissurelytheCityofLondonthateggsontheUKgovernmenttoofferextraloanstoIreland,outsideoftheTroikaarrangements,tohelpitguaranteealldeposits,whichsuggestsitisfinetositbyasothercountriesstruggleandalsotoinvoketerroristlegislationagainstIcelandwhenitdoesdefault.TheUKtrendsarenotgood.
Pricesinthehousingmarketpolarizedfurtherduring2012andinto2013,andevenmorepeopleareworriedabouthousingnow,ascomparedwithwhenthecrisisfirsthit–howtogetit,howtokeepit,howtosellit,whentobuyit,whentosellit.Wheremost‘top’bankers
![Page 282: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/282.jpg)
live,propertypricesarerising.OutsideofLondon,wheremostbankcustomerslive,theyarenot.Thefallshavebeengreatestsince2008inplaceswherethepropertypriceswerelowesttobeginwith,incitiessuchasHull,Belfast,GlasgowandSwansea.
![Page 283: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/283.jpg)
![Page 284: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/284.jpg)
NewlyrefurbishedflatsinSheffieldcanbeseentotheleft.TotherightoverthewalkwaysaretheoldParkHillflats,dwellingsthatare
currentlyundergoingredevelopment.Thegraffitionthewalkwayconnectingtheseblocksreads‘Iloveyou,willyoumarryme?’Itisnowbeingusedasanadvertisingslogantotrytoselltherefurbishedapartments,butasofspring2013
theyweresellingslowlyandthevastmajorityoftheblocksofflatsinthecomplexasawholewere
empty,awaitingredevelopmentmoniesthatappeartobeslowincoming.Theseiconic
buildingssitaboveSheffieldtrainstation,justtwohoursandfifteenminutes’journey-timefrom
theheartofLondon.IftheprivatehousingmarketrecoversinthenorthofEngland,theywillbetransformed.Ifitmovesonlyslowly,foryearsmostofthesepotentialhomesmayremainempty.Sheffieldhasaverylongwaitinglistforhousing.Thetaleofthemanwhosprayedthegraffitiandthewomanhepainteditfordidnotendhappily.ItfeaturedinaBBCRadio4play,broadcastafewyearsagotoentertainthe(mostly)middle-classlistenersofthatradiostation,thevery
peoplewhoarenowthetargetmarketforthoserefurbishedflats,flatsthatwereoncethe
crowningachievementofapasteraofslumclearance.Thewalkwaysweresowidethatthey
![Page 285: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/285.jpg)
werecalledstreetsinthesky,andamilk-floatdrovealongthemeachmorningmaking
deliveriestotheoriginalworking-classtenants,whocouldnotbelievehowluckytheyweretolivethere.NowmosthomesinParkHillremain
derelict.
InFebruary2013theRoyalInstituteofCharteredSurveyorsannouncedacommissiontoinvestigatewhatevenitcalled‘theUKhousingcrisis’.69ThesurveyorsexplainedthatthefurtheryoutravelfromLondon,thelesspriceswereexpectedtoriseinfuture.Evenbeingoptimistic,‘InWales,priceswon’treturntotheiraveragepeakof£154,696until2021withthecurrentmarketvaluemorethan£20,000downtolessthan£132,000.’70Inrealterms,takingaccountofinflation,thisisapredictedpermanentfall.Many,includingthe
![Page 286: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/286.jpg)
surveyors,considerahousing‘disaster’toconsistofafallingmarket,althoughsomealsowanttopreventhousingpricebubblesforming,sothatpeopledonotsufferintheconsequentfall.ThesurveyorswouldalsoliketoseetheestablishmentofsomeaffordableareastobuywithinLondon,where,bytheendof2013,increasesofupto30%werebeingreportedinthespaceofjustafewmonths.ButifpricesweretorisegreatlyinthepoorestpartsofLondonandinplacesthatarefurtherawayfromLondon,peopletherewouldhaveevenlesstospendthantheyalreadydo,followingtherecentfallsinaveragehouseholdincomes.71
Cheaperhousingcouldbebetter
![Page 287: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/287.jpg)
housing,butnotbetterforspeculators.
Reactionwassurprisinglymutedwhen,inhisbudgetof21March2013,ChancellorGeorgeOsborne’smainannouncementsinvolvedonlythosenewpoliciestotrytoshoreupthehousingmarketdescribedinthefirstchapterofthisbook.Osbornewasfearfulofcontagion–theprospectoffallingpricesinthenorthofEngland,Wales,IrelandandScotlandspreadingsouthwards,threateningthestillbuoyanthousingmarketinthesouth-east.InresponsetoOsborne’sMarch
2013budget,AngelaBrady,thePresidentoftheRoyalInstituteofBritishArchitects,greetedtheChancellor’sannouncementby
![Page 288: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/288.jpg)
saying:‘Theconstructionindustryshrankby8%lastyearandwearecontinuingtoseedisappointinglylowlevelsofhouse-building.’Andshecontinued:‘Althoughtheannouncementstodayforfurtherspendingonhousingandinfrastructurearetobewelcomed,it[sic]willbarelymakeadentinthedeliveryofthesustainablenewhomesandcommunitieswedesperatelyneed.’72NoonechallengedAngela.Nooneaskedwhyhomescouldnotbedeliveredatlowerprices,whyrisingpricesweresodesirabletoherandthevestedinterestssherepresented.Nooneappearedtopointouthowmuchitactuallycoststobuildahome:howmuchgoesinprofittoarchitects,tobuilders,tosurveyors’firmsand
![Page 289: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/289.jpg)
theirbossesandshareholders–and,bycontrast,howmuchlessispaidtothelabourers,thepeopleontheground.And,asfarasIcantell,nooneinthemainstreammediarespondedtotheannouncementsbyaskingwhetherwemightnothaveagreatmanyhomesalready,homesthatarebeingunderused,andwhetherinatimeofausterityitmightbebettertotrytomakebetteruseofthemratherthanriskgovernmentmoneyontryingtoboostpricesintheprivatehousingmarket.As2013progressed,cynicismon
governmenthousingpolicygrew.PrivateEyenotedthatoneschemesetuptoencourage100,000newhomesaleshadonlyachieved1.5%ofthattargetnumber.73Thiswas
![Page 290: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/290.jpg)
‘FirstBuy’,thecoalition’simmediatesuccessortoLabour’s‘HomeBuyDirect’scheme.Inbothschemes(andlaterin‘NewBuy’forallbuyers)governmentlentfirst-timebuyerswhowerenotontopincomesmostofthedepositonahome,sothattheycouldreallyoverextendthemselvesindebt.AlmostayearbeforePrivateEyeputthebootin,oneanalystremarked,‘Weshouldalsoquestiontheassertionthat,byencouragingfirst-timebuyers,thiswillsomehowhavealaxativeeffectonthecongestedmarket.Onceagain,thesearenew-builds,chain-freeproperties.’74Itwasperhapscriticismlikethis,suggestingthattheChancellor’sschemeswerehavinglittleinfluence,thatledOsbornetoboosttheschemesandtoofferto
![Page 291: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/291.jpg)
underwritesomanymorebillionsfromJanuary2014onwards.TheChancellorknewhehadtodo
something.Astheeffectsoftheeconomiccrisisrippledout,housingacrossallsectorswasbeingimpactedoninnumerousdamagingways.Justashewaswritingthe2013budget,itbecameknownthatthenumberofstudentsgoingtouniversitieswasfalling,andaconglomerateofmajoruniversitystudentlandlordswasgoingbust.Oftenthesebankruptcieswerereportedasseparatelocalstories,soonlysomeonewithahousingobsessioncouldlinkthem.Forinstance,inNottingham,thelocalpressannouncedthat‘Aftersinking£48millionintothecomplextwomilesnorthofUniversityCampus,Opalhasgoneinto
![Page 292: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/292.jpg)
administration.’75Butatleasttwentyverysimilarmajorlandlordssufferedthesamefateintheprecedingthreeweeks;thirteencompaniesinManchesteralonewentunderearlyin2013.76
Companiesthathadrecentlybuilthousing,inthiscaseuniversityhousing,werenotdoingwell.Enticementstobuildwhenmostfamiliesaregettingpoorer,byhelpingtoshoreupthelong-termdebtofthosefamilies,isunlikelytoaddmuchrealconfidencetothemarket,althoughitcaneasilyinjectashort-termboostbyhelpingthosewhoaredesperatetobuy–peoplewhocannotaffordtherepaymentsandwhowouldnormallyberejectedbythebanksforthatreason.Since2010throughto2013theaverage
![Page 293: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/293.jpg)
hourlywageinBritainhasfallenby5.5%.ThisisoneofthelargestwagefallstobefoundacrossallofEurope.77OnlyinGreece,PortugalandtheNetherlandshavethefallsbeengreater,butinallofthosecountriestheaveragecostofhousingislower.Atthesametime,inLondon,morethan2,000bankersarepaidwelloveramillioneuroseachayear.InallofFranceonly162areonsuchsalaries,andinGermanyjust170,butthegoodnewsisthattherehavebeenslightfallsinthenumberofsuchhighlypaidLondonbankerssince2010,andtheiraveragesalarieshavefallento‘€1.44millionin2011,downfrom€2.3millionin2010’.78
Changeispossible,andithasinsomewaysbegun,butthosewhowanttoreturntotheoldwayshave
![Page 294: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/294.jpg)
regroupedandareworkingveryhardtoholdbackthetide.Thatishardlysurprising,giventhat,ineffect,itiswhattheyarepaidtodo.Bankswillnotmakesuchgreatprofitsintheirgoodyearsinfutureifwedochangehowwebehavetowardshowwearehoused.Itisintheinterestsofthevast
majoritythatwechangehowwebehave–thatwechangethefoundationsofhowhousinghasbeenprovided,managed,exchanged,caredforandbuilt.Someofthatchangeisalreadybeginning.Fromself-buildschemestosquatting,asmallnumberofpeoplearehousingthemselvesdifferently,butgovernmentsarealsoslowlychanging.Theheadlinesaredominatedbythosetryingtokeep
![Page 295: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/295.jpg)
theoldorderinplacejustalittlelonger,butawayfromtheheadlinespoliciesarebeginningtobeconsideredthatwouldtaxmansionsandotherexcessiveformsofhousingopulence.LegislationisalreadyinplaceinBritainthatallowsmortgageestostayintheirhomesandbecometenantstoavoideviction;itjustisn’tusedmuchanditneedsadapting,butitisthere.Therearealsoplansafootwithinsomepoliticalpartiestoincreasetenants’rights,79butthesemustbesetagainstplansbyotherstoreducetheirrights,increaseevictions,reintroducemassprivaterentingandletthealreadyrichgetevenricher.It’sabattlethattheminorityatthetopcurrentlyappearstobewinning.Toseehowtheyaredoingthat,we
![Page 296: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/296.jpg)
needtoworkupfromthefoundationstoaskhowhousingisbuilt,financedandheld.
![Page 297: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/297.jpg)
![Page 298: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/298.jpg)
4
Building
HousesinLondonaresoexpensivethesedaysthatthemindsomewhatbogglesatthethoughtthatthereareactuallyenoughrichpeoplearoundtobuythemall.Andofcoursetherearen’t.It’salldebt.Thatspecialsortofdebtthatisperfectlyserviceableandsafejustsolongasnothingwhatsoeverchangesatall.Myexperience,though,is
everybody’sfuture.Housepricesaresoaringeverywhere,aidedbythelowinterestrateswecan’taffordtochangeandthegovernment’sbizarre,cynicalhelp-to-buyscheme.Homeownership,onceseenasaladderoutofpoverty,hasbecomeamillstoneofthemiddle.It’swhereallourmoneygoes,meaningthatitcan’tgo
![Page 299: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/299.jpg)
anywhereelse,meaningthatwegroweverricheronpaper,butwithnothinglefttospend.Monetarysadhusweare,balancedprecariouslyonpilesofborrowedcash.
–HugoRifkind,Spectator,20131
WhenHugoRifkinddescribesthemiddleclassesofBritainassadhus–asceticmonkswhohaveleftbehindallmaterialattachments–becauseitcoststhemsomuchjusttopayforsomewheretosleep,heisperhapsexaggeratingalittle,butheisclearlyagitated.Rifkind,ahighlysuccessfulyoungjournalistfromafamilynotdevoidofmoneyandpower,isfindingithardtogetby.Housinghasbecomeeveryone’s
problem.Thisisyetanotherreasonwhythecurrentcrisisisleadingtoadisaster–oneinwhichcurrentacute
![Page 300: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/300.jpg)
discomfortwithhowwearehousedturnsintodespair,assomanyofuscometoseethehousingelementinourcostoflivingriseevenhigher,oursecuritydeparting,ourlivingconditionsdeterioratingandevenourhealthsufferingif,asHugoputsit,wearebalancing‘precariouslyonpilesofborrowedcash’.Thisdisasterisdifferentfrompreviousnear-housingcrashes,evenfromthe1930sDepression.Atitsheartlienewextremesofavariceandignorance.Toseehowwegothere,goback
tobasics.Considerwhoholdsthelandonwhichmosthomesarebuilt,whytheydon’tbuildonallofit,andwhothebuildingisfor.Issuesofmigrationneedtobeconsidered.Ifimmigrationlevelsstaybuoyantand
![Page 301: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/301.jpg)
emigrationlevelsdonotincrease,theneedfornewhousingtobebuiltinfuturewillcontinuetogrow.However,thetypeofhousingbeingbuiltandwhetheritisforrentoreventualownershipwillbestronglyinfluencedbywhethereconomicinequalitiesinBritainriseorfallinfuture.Greatereconomicequalityalsotendstocoincidewithhigher-qualityrentalpropertybeingmadeavailableatlowerpricesandwithlessprofitbeingdrawnoutofhousingsales.Similarly,theextenttowhichwebringemptypropertybackintouseandrenovateoldproperty,ratherthanbuildnew,willdependonchoicesyettobemade,andontheoverallpoliticaldirectionwewillcometotake.
![Page 302: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/302.jpg)
InBritain,morethaninalmostanyotheraffluentcountry,thepreciselocationofpropertyisseentomattergreatly,because,increasingly,geographyrevealsthemostdetailaboutyourclass.Tenureisonlyaverycrudeclassdivider:owning/buyingorrenting/defaulting.Withinthehousingclasses,preciselywhereyoubuyorwhereyourentgivesawaymostoftherestofyourstatus.BecauseofthatwearenowcarefulnottodirectlyaskpeopleinBritainwheretheylivewhenwefirstmeetthem,justaswewereoncecarefulnottoaskdirectlyaboutanyreligiousbeliefs.Itusedtobewhetheryoulived
upstairsordownstairs,intheservants’quartersorthemaster’srooms,thatrevealedthemostabout
![Page 303: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/303.jpg)
you.Then,aswebecamemoreequal,andboththeservantsandtheservant-keepingclassesdisappeared,suburbsbecamemoresimilar.Now,associalclassessegregateanew,whetherwebuildandwhatwebuildchangesagain.Sotherecentfateofdifferentgroups,fromthepoorestinLondontothesuperrich,alsohastobeconsidered.Towhatextentdoweputour
wealthintohousingbecauseourhousesdefineourstatusandsignalwhoweare?Agrowingpartofhousingisthematerialrealityandprojectionofthe‘profession’.Placeincreasinglyreflectstheperson,andeventhewaypeopledressnowreflectswheretheymostlikelylive.Putanotherway,mostpeoplecantellthatyouprobablyrentacheaper
![Page 304: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/304.jpg)
propertyjustbylookingatyouroveralls.Conversely,ifthatsuitistailor-made,andthosearetherightkindofleathershoes,morelikelyyourmortgageisonadetachedhomeratherthanasemi,ifoutsideofLondon.InsidecentralLondon,someoneowningadetachedhousemightwelldressdown.Theyknowtheyarerich.Housingisintertwinedwithall
othersocial,economicandpoliticalissues.ConsiderhowattitudestoraceaffecthousingandeveninfluencehowmanyhomesarebuiltinBritain.Fearofnewcomersandalittleold-fashionedracismcanencouragegovernmentstorestrictlegalimmigrationevenfurther.WivesandhusbandsofBritishcitizensarenowlockedoutof
![Page 305: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/305.jpg)
Britainunlesstheirincomeissubstantial.Governmentshavebeenknowntoencouragethefearofothers,asthisdistractsfromthestate’sownfailurestoprovideenoughschoolplaces,jobsandhomes.Itiseasytosuggestthattoofew
resourcesarethefaultofimmigrants.Apolicytofurtherreduceimmigration,ifeffective,wouldalsobeapolicytoreducetheneedfornewhome-buildingforanageingandshrinkingsociety.Butfurtherimmigrationcontrols,restrictingdemand,couldmakethehousingmarketevenmorevolatilethanitalreadyis.ThetopendoftheLondonhousingmarketisnowalmostcompletelyreliantonasteadystreamofnewrichimmigrant
![Page 306: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/306.jpg)
‘investors’.Curtailtheirimmigration,tamperwiththeirnon-domstatusandpricesatthetopcouldcrash.ThebottomoftheprivaterentalmarketincitieslikeSheffieldissimilarlypartlyheldupbycontinuedimmigration,butinthiscaseofsomeofthepoorestpeopletoarrive.VolatilityinhousingpricesandrentsisnotnewtotheUK,butithasbeengrowinginmagnitudeinrecentdecades.Allkindsofsolutionshavebeensuggested.Manycommentatorstoday
advocatefewerplanningrestrictionsasonesolutiontotheproblemoftoofewhomes.Theywantmorebuildingonlanddesignatedasgreenbeltaswellastheliftingofotherrestrictions.TheypointtotheUSandtohowitshousingsector
![Page 307: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/307.jpg)
survivedthelastdepression.ButintheUS,thegreatesteconomicbeneficiaryoftheSecondWorldWar,thestorywasdifferenttothatintheUK.There,the1930shouse-buildingboomwashelpedbythemotorcaropeningupwholenewswathesofgreenland–towhichvirtuallynogeographicalplanningrestrictionswereapplied.TheUKneverhadmuchopenspacebetweenitscities,sothetwocountries,inthisrespect,arenotcomparable.Financialrestrictionsonhousing
financewereputintoplaceinpost-DepressionAmerica,andtheirimpactwasalong-lastingone.In1933theGlass–SteagallActwaspassedbyCongresstostopbanksusingsavers’moneytogamblemadly.TheActpreventedbanks
![Page 308: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/308.jpg)
fromsellingofftheirmortgageloansforotherstogamblewith;andbankshadtousesavers’moniestosupportthelendingtheydid.TheActhelpedtopreventarepeatofthewidespreadfraudthatoccurredintheyearsleadinguptothecrashof1929.Butitwasrepealedin1999followingextensivelobbyingbylargebanks.Thestoryofwhatfollowedisby
nowwellknown.Theeightyearsfollowing1999appearinhindsighttobeverymucharepeatoftheeightyearsleadingupto1929,theRoaringTwenties:‘Onceagain,banksoriginatedfraudulentloansandonceagaintheysoldthemtotheircustomersintheformofsecurities.Thebubblepeakedin2007andcollapsedin2008.’2
Between1933and1999therewere
![Page 309: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/309.jpg)
nosimilargreatbankcrashesandnosimilarhousingmarketcrashesintheUnitedStates.Butthatdidnotmeanthatlessgeographicallyrestrictedhouse-buildingmeanthomesforeveryone.Itmeantmorehomes,andmorespaceinthosehomesformostpeople,untiltheearly1980s;butnothomesforall.Evenbeforewidespreadeconomic
inequalitiesroseagaintherewerespecificgroupswhowereclearlyverybadlyhousedinbothNorthAmericaandEurope.Post-war,USsuburbanizationcontinuedapacewithonlyoccasionalminordownturns,butitwassuburbanizationforthemajority.Bythe1970swhiteAmericanshadneverbeenbetterhoused.Thesamewastrueinthefarmorespatially
![Page 310: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/310.jpg)
restrictedUK:bythe1970smostwhitepeoplehadalsoneverbeenbetterhoused.Butifyouwereblackitwasadifferentstory.Forexample,intheUSthegovernmentbackedloanstohomeownerstothetuneof$120billionbetween1934and1962,but98%ofthesewenttowhitepeople,despiteAfrican-Americansthenconstitutingatenthofthepopulation.3IntheUKitwasroutineinthe1970stoseesignsinlodging-roomandB&Bwindowssaying‘noblacks’.Allwasfarfromutopia,buttheroadtoutopiawasbeingwalked.IntheUK,planningrestrictions
werebroughtinaftertheSecondWorldWarthroughtheTownandCountryPlanningActof1947;asaresult,buildingbecameconcentratedinexistingurbanareas,and,initially,
![Page 311: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/311.jpg)
mosthousingconstructionwasstate-plannedandstate-funded.Therewereafewexceptions,suchasthenewtowns,ofwhichthelargestwasMiltonKeynes,butlandsupplywasconsequentlystrictlycontrolledintheUK,unliketheUS.SomethinkthatthismayhavepreventedafallinhousepricesintheUKprivatesectorafter2008atatimewhenpricesintheUSwereplummeting,butitalsomeanslike-for-likehousingpricesareoftenhigherintheUKthanintheUS.IrelandandSpainfollowedtheUSmodelmoreclosely,allowingbuildingtotakeplacelargelyunfetteredbyplanning,and,possiblyasaconsequence,thosetwocountrieshavesofarexperiencedsomeofthegreatestdropsinhomepricesduringthehousingcrisis.
![Page 312: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/312.jpg)
ItispossiblethatagreatfallinpricesfortheUKisyettocome,andthatthereadjustmenthasbeenpostponedonlybyextremegovernmentandBankofEnglandaction:thebailingoutofbanks;keepingthebankrateatnearzero;andthecreationofevermoreexpensiveschemestoencourageevergreaterprivateborrowing.ManybooksarecurrentlybeingpublishedsayingthatwhattheUSandUKgovernmentsaredoingisfolly.Whatismoststriking,however,ishowtheauthorsofthesebooksrangefromrevolutionariestoestateagents.Inonesuchbook,AndrewSmithers,aninvestmentmanager,suggeststhattheseattemptstoboostdemandwillnotwork,becausetherearelonger-termstructuralproblemsthatstretch
![Page 313: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/313.jpg)
acrosstherichworld.4Totrytoworkoutwhichpointofviewismoreplausible–thatofthegovernment,orthatofitsmanyanddisparatecritics–weneedtolookatsomeofthebasicsofsupplyanddemand.
LANDANDMIGRANTS
Londonpropertypricesareracingaheadwithfigurestodayconfirmingthatthecityisskewingaveragesforthewholecountryhigher–butnotallareasofthecapitalarebooming.
–DailyMail,‘ThisisMoney’website,
17September20135
HousingpricesintheUKrosesixfoldfrom1983to2007,butlandpricesincreasedsixteenfold.6Similarpatternsarealwaysfoundwheneverandwhereverpeopleareallowedtohoardland,untaxed,andhousingis
![Page 314: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/314.jpg)
allowedtobeaccruedasanassetratherthanbeingusedprimarilyforshelter.Whenhousingishoardedasanasset,whatiscalledits‘exchangevalue’,itsprice,startstoriseuntilthisfarexceedsits‘usevalue’,thepriceworthpayingjusttoliveinit.Ifahomeweresimplyworthwhatitcosttomaintainit,theprice-to-rentratiowouldbestable.Pricesrisemuchhigherwhenpeoplespeculateonthelikelihoodthattheywillriseevenhigherinthenearfuture.InMay2013theOrganisationfor
EconomicCo-operationandDevelopment(OECD)releasedareportsuggestingthataveragehousingpriceswerecurrentlyovervaluedby31%intheUKincomparisonwithrents,andby21%incomparisonwithincome.Put
![Page 315: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/315.jpg)
simply,ourhousingpricesarehigherthancanbejustified,evenbyorthodoxeconomics.TheUKwasfoundnottobealoneinthelistofcountrieswherepropertywasnow,ingeneral,greatlyovervalued;but,accordingtotheOECD,inallthecountrieswheretherewereproblems,includingtheUK,‘thesecountriesareheavilyreliantontheirpropertymarketandhaveseenhouseholdsbuildupbigmortgagedebts.’7Inotherwordsthereiscontinuedwishfulthinkinggoingon.WhatisparticularlyinterestingaboutthisOECDreportisthatintheUKitwasgreetedwithoutscepticism,includingbynewspapersthatusuallyseektoboosthouseprices.ThequotefromthereportcitedabovewasreportedontheDailyMail’s
![Page 316: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/316.jpg)
financialwebsite.Noweventhecommentariatontherightsaypricesaretoohigh.Agenerationofhomeownersis
delightedwiththeprofitstheyhaveapparentlymadesimplybyhavingsattightandwatchedthehousingmarketoverheat.Butnowtheyarebeginningtoworry.Somearebeginningtowonderwherethemoneyhascomefrom.Andsomeareconcludingthatithasbeenstolenfromthenextgeneration,whoarenowpayingforitthroughtheirhighrentsandhouseprices.Ifthenewspapersthatthemiddleclassreadalsoreaffirmthis,includingpapersonthepoliticalright,theuncertaintyoverwhetherhomesarereallyworththeircurrentpricetag
![Page 317: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/317.jpg)
grows.Andhousepricefearspreadsintothegeneralpsyche.
Figure6.UKaveragelandpricesandhouseprices,1983–2009.
![Page 318: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/318.jpg)
Somepeople‘generously’helptheirchildrenwiththeirdeposits.However,rarelyaretheamountsenoughforthenextgenerationtoacquireafirsthousethatisofthesamequalityastheoldergenerationhadenjoyed;noristhehelpusuallyenoughtoallowtheyoungergenerationtobuywithoutalsofirsthavingtosavemoneyoftheirown.Theaverageageoffirst-timebuyersisnowwidelyreportedtobepeopleintheirmid-thirties.Atwenty-five-yearmortgagemightnotbepaidoffuntilthebuyersreachtheirsixties,orlater.Insuchcircumstanceshousing‘consumers’begintoseethat,whenlandpricesrise,astheyhaverisenintheUK,someoneismakingamintoutofdoingnothingbutstartingoffrich.Onlythosewhostartoffrich
![Page 319: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/319.jpg)
canowngreatquantitiesoflandandthenbuymore.Governmentministerspretendtheydisapproveofthis,buttheydolittleornothingtopreventit.Consider,forinstance,NickBoles,
theUKcoalitionPlanningMinister,who,in2012,said:‘Ithinkeveryonehastherighttolivesomewherethatisnotjustaffordablebutthatisbeautifulandhassomegreenspacenearby…abasicmoralright,likehealthcareandeducation.There’sarighttoahomewithalittlebitofgroundaroundittobringyourfamilyupin.’8Currently,however,thisvisionappearsalongwayoffformost.Maybeformostitismeanttoremainasavision,anaspiration,notareality,assomethingtospuronthosewhomightotherwisenotwork
![Page 320: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/320.jpg)
hardenough.Thismaysoundabitharsh,butBolesmustknowthatforeveryonetohavesomegreenspacenearby,therichcannotbeallowedtocontinuetotakemoreandmoreofit.InBritainthelargeprivatehome-
buildersareknowntobehoardinglandforwhichplanningpermissiontobuildhasalreadybeenobtained.Theyarewaitinguntilitrisesinvalue.Thenthehomestheywillbuildonthatlandwillbeworthfarmore.Whatthebuilderslookatisevidencesuchasthegraphabove,showingthatUKland,by2007,wasworthsixteentimesmorethanitsvaluein1983.Evenaftertheadjustmentsfollowingthecrash,itwasstillworthatleasttentimesasmuchin2009asitwasintheearly1980s.Privatebuildersimaginethat
![Page 321: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/321.jpg)
sucharisemighthappenagain,thatiftheysimplyholdontotheirlandandbuildononlyalittleofit,theymightmakeahundredfoldprofitonanearly1980sinvestment,ratherthanatenfoldprofitnow.Theybelieveanothertenfoldriseinfuturelandvalueswouldbringthisabout,buttheircalculationsdonottakeaccountofwhetheranyoneinthefuturewillbeabletoaffordtheseprices.Bysummer2013privatebuilders
hadsecuredplanningpermissiononenoughlandtobuild400,000homesinEngland,butnotoneofthosehomeshadbeenbuilt.ThatJunetheLabouroppositionleaderwasreportedassaying:‘Alloptionsshouldbeonthetable,includinggivinglocalauthoritiesrealpowerto
![Page 322: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/322.jpg)
saytotheworstoffendersthattheyshouldeitherusetheland,orlosetheland.’9InresponsetheheadofoneofBritain’slargestbuilderssuggestedthat‘landisgenerallyinshortsupply.’10Theimplicationisthatsomeotherlandholdersarehoardingaswellasthebuilders,andthisencouragesthebuilderstohoardwhattheyholdtoo.Someofthelargestlandownersinthecountryarecomplicit,includingpensionfunds,utilitycompanies,theroyalfamily,theChurch,variouscharities,Oxbridgecolleges,membersofthearistocracyandotherrichlandowners.11Iflandisinshortsupply,itisonlybecauseweallowittobe;alandvaluetaxwouldencouragealltheseownersto
![Page 323: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/323.jpg)
diversifyalittleoutofland,freeingmoretobebuiltupon.Onereasonwhylandroseinvalue
farfasterthanthehousingbuiltonitwasbecause,asincomesinBritainpolarized,therichgotsomuchricherfromtheveryearly1980sonwards.Therichsawlandasasafeinvestmentfortheirsurplusmoney.Theyjokeabouthowitisafixedresource;abouthownoonewillevermakemoreland.Thepriceoflandrosequicklyattimeswhenstockandshareswerenotgivingtherichsimilar‘returns’.Itwaspartlybecausetherichgotricherandspentmoreoftheirmoniesonlandthatthebuildersbegantowaitalittlelongerbeforebuildingtoreaptherewardsofinflation.Thereisnowoftenathree-orfour-yearperiodbetween
![Page 324: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/324.jpg)
newlandpurchasesbybuildersandpropertyconstructionuponthatland.Buildingfastermighteasilylosethebuildingfirmanditsshareholdersmoneyifpricesarerising.Bywaitingforlandpricesand
hencetheapparentvalueofhomestorisefurther,thebuildersthemselvesarehelpingtoshoreupdemandandtocreatefurtherinflationinbothlandandhousingprices.Thisistheirjob.Theyareprivatebuilders.Theirjobistomakeasgreataprofitastheycan.Itisnotprimarilytobuildhomes.Ifitwere,theywouldbuildmore.Whathappenswhenbuildersdon’t
usethelandtheypossesstoincreasetheavailablehousingsupply?Onepossibility(butanunlikelyone)isthis:‘EmigrationfromtheUKrose,
![Page 325: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/325.jpg)
upto353,000from336,000,withthenumberofpeopleleavingtheUKforadefinitejobupto127,000from108,000thepreviousyear.’12TheUKcouldbecomeamoreandmoreexpensiveplaceinwhichtolive.PeoplewhocannolongeraffordtoliveinsouthernEnglandmayhavetoleavetoliveincheapercountries,whilethoserichenoughtocomeinwillbeencouragedwithfurtherinducementstosettle.Itisunlikelythatfewermaymigrateinthanemigrateout,butthisiswhatthosewhowouldliketoseeBritaingothewayofSingaporeareactuallywishingfor.SingaporeisoneofthefewcountriesintherichworldwithhigherincomeinequalitiesthanthosetobefoundeitherintheUKorintheUS.Singaporemaintainsthisby
![Page 326: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/326.jpg)
enticingwealthyincomersinwithtaxbreaksandensuringthatservantshiredfromoverseashavenorighttoremaininthecountryaftertheyarenolongerneededbythewealthy.EmigrationfromBritainrose
during2012whenratesofimmigrationtotheUKfell.Morepeoplewerestillcominginthangoingout,butthegapbetweenthosetwofigureswasfalling.Peoplemayleaveplacesifthereisnotenoughhousingthattheycanafford.TheymaylookatcheaperhousingpricesinmanypartsofboomingAustralia13
andinmostofNewZealandiftheywantmorespacefortheirmoney,moreroomsaswellasmoresunlight.Fewerthencometolivehere.Thereisacaseforbuildingmorehomes,ifjusttoreduceemigrationandaid
![Page 327: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/327.jpg)
immigration,aninwardmovementoftheyoungandnottooexpensivelabourthatanageingBritainneeds.Manyelderlypeoplearesofrail
thattheyneedacarertovisitthemregularly.InJanuary2013GailFoster,anelderlywoman,diedwhenhercarerswerearrestedbytheUKBorderAgencyandsofailedtoturnuptofeedherforninedays.Theimmigrantswhohadbeenfeedingherweretobedeportedtohitgovernmenttargets.ItwasbecauseofthosetargetsthatMrsFoster,atageeighty-one,‘waslefttostarve’.14
Meanwhile,youngBritishpeoplearetoldthattheyneedtoaspiretothehighest-paidjobs,andmostknowtheywouldfindithardtosurvivelongonacarer’swage.Punditsoftensuggestthatgreaterimmigration
![Page 328: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/328.jpg)
deprivesusofhousing,buttheyrarelyexplainhowgreaterimmigrationcanhelpuslivelongerandhappierlives.Wearealmostalwaysbetterhousedathomethaninahospitalbed.TheUKgovernmentwouldlike
peopleinBritaintoblamepoorerimmigrantsforthecostofhousingbeinghigh,notbankers,privatebuilders,landownersorspeculators.TheLabourPartytoyswithblamingimmigrationforvariouswoes,mostobviouslywhenittalksof‘BritishjobsforBritishworkers’:eventheGreenPartyhassomeelementswithinitthatseeimmigrationasaddingtogreenhouse-gasemissions.AndsomeLiberalDemocratsinTowerHamletshavedistributedleafletsthatlinkthearea’shousing
![Page 329: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/329.jpg)
shortageswithblackandAsianpeople.15Puthousingandimmigrationtogetherandyougetatoxicmixinalmostanypolicyforum.Thecoalitiongovernmenthas
neverunderstoodthecaseforbuildinghomesforthegrowingnumbersofcompletelynewhouseholdsthatBritainshouldexpecttobehometointhenearfuture.Italsodoesnotunderstandthatanageingpopulationwouldbenefitfromaninfluxofyoungeradults.Instead,TheresaMay,theUKHomeSecretary,suggestedaroundChristmastime2012that‘Housepricescouldbe10%lowerovertwentyyearsifthegovernmentcutnetmigrationtozero.’Shesaidthiswithintwoweeksofthose
![Page 330: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/330.jpg)
emigrationfiguresbeingreleased.16
ThestatisticswerethoseshowinganincreaseinthenumbersofpeopleleavingtheUK.Theyshowedthatalthoughnetimmigrationwasstillpositive,itwasfalling.Herimplicationwasthathousingpricesarehighnotbecauseofissuessuchasthehoardingoflandandtheloweringofmostpeople’sincomesduringausteritybutbecauseofimmigration.Shealsoassumesthattheelectorateshewantstoappealtoareinnumerateaswellasprejudiced.Areductionof10%overtwentyyears,ormuchlessthan0.5%ayear,isnegligible.LondonMayorBorisJohnson
rebuffedMay’scomment,sayingthat‘Idon’tthinkitissensibletosaythattokeepdownpropertyvalueswe
![Page 331: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/331.jpg)
shouldkeeppeopleout,orinvestorsout,inordertoallowpropertyvaluestodecline.Thatwouldleadtoafallintheequityofeveryoneand,forthelifeofme,Icannotseethelogic.’17
WhenpeoplelikeBorisJohnson–orPlanningMinisterNickBolesforthatmatter–talkof‘everyone’,theydon’tmeantenants;orthoseabouttobuyatinflatedpricesinorderto‘getontothehousingladder’;orthosewhohavenoequity;orthoseincommunalestablishmentssuchasretirementhomes,prisons,militarybarracksorstudenthalls.Theymeanoutrightownersandpropertylandlords.Thetwogreateconomiccrashes
thatfollowedtheRoaringTwentiesandnever-had-it-so-goodnoughtieshavebeencomparedinsomedetail
![Page 332: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/332.jpg)
earlierinthisbook.However,onegreatdifferencebetween1929andtheyearsafter2008intheUKisthat,whereasinthe1930stherewasagreatgrowthinhome-building,inthenoughties,sincethepeakyearof2006/7whenover192,000homeswerebuiltintheUK,therehasbeenacollapseinconstruction.Westillhavemorehomesandmoreroomsinhomesthanwehaveeverhad,butwearenowbuildingmoreslowlythanwehaveeverdone.Thesetwofactscould,ofcourse,berelated,butwearenotbuildingslowlybecauseeveryoneisnowwellhousedbutbecausebuildersarewaitingforthetimewhengreaterprofitsaretobemade.Theyhaveshareholderstosatisfyor,forthesmallerfirms,mouthstofeed.
![Page 333: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/333.jpg)
By2011/12fewerthan110,000permanentdwellingswerebeingcompletedayearinBritain,andonly31%ofthosebyhousingassociationsforsocialrenting(socialrentingmeansdwellingstobereleasedforrentbelowsupposedlyfreemarketprices).Localauthorities,whichusedtobuildmorehousesthananyothersectorinsomeyears,builtjust2.7%ofallhomesinthe2011/12financialyear,fewerthan3,000intotalacrossalloftheUK,andathirdofthosewereinScotland!However,asfewas130councilhomeswerebuiltnationallyin2004/5,so,outofcontext,thisminusculeriseinbuildingcouldberepresentedasagreatincreasebyacynicalpolitician.18
![Page 334: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/334.jpg)
Sometimestherecanbetoomanytoodramaticclaimsbeingmadeabouthowdirethecurrentsituationis.Thisbookhasprobablybeenguiltyofalittleofthat,andsoitisworthsteppingbackabit.Whenyouresearchissuesofhowmanyhomesarebeingbuiltyoucanquicklytireoftherepeatedclaimsthatrecentstatisticsaretheworstsincereliablerecordsbegan.Whatalmostnoonesaysisthat,evenwhileournew-buildratesslowed,thenumberofbedroomspotentiallyavailabletothepeopleofBritaincontinuedtoriseandrise.Wemaynotbebuildingthatmanymorenewdwellings,butwehaverapidlyaddedroomstowhatwealreadyhave.Extensionsweremostlybuiltto
turnthree-bedintofour-bedhomes,
![Page 335: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/335.jpg)
atthesametimeasfamilysizescontinuedtofall.Oftenthoseextensionswerebuiltontohomesthathadbeenpurchasedthrough‘right-to-buy’,andnotontohomesthatremainedcouncilproperty.Preciseannualfiguresarehardtocomeby,butacomparisonofannualcensusreturnsforsmallareasshowsjusthowmanyroomshavebeenaddedoverthecourseofthelasttenyears.19Althoughitistruethatinparticularpartsofthecountryandwithinparticulartenures(say,smallercouncil-ownedproperty),overcrowdingrateshaveincreased,despitealltheroofconversionsandallthebuildingofbedroomsoverthegarage,thereare,nonetheless,morebedroomsoverallintheBritishhousingstocknowthantherewere
![Page 336: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/336.jpg)
tenyearsago–moreperfamily,evenmoreperperson.Thosewhoargueforrenewed
home-buildingtendtoavoidlookingatwhysomuchoftheexistingstockofhousinginBritainissounderused,andhowmanypropertiescouldstillbeeasilyextended,shouldalittlemorespacebeneeded.Thosewhowouldliketoseemorebuildingnowareaverywidegroupofindividuals,rangingfromtheChancelloroftheExchequer,GeorgeOsborne,throughtotheBritishChambersofCommerce,theLabourPartyandthecharityShelter.20Butmostoftheseadvocatesofhouse-buildingprogrammestendtosaylittleaboutthewayexistinghousingstockisunderused–andverylittleabout
![Page 337: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/337.jpg)
stockthatisn’tusedatall.Asonenewspaperfinancialeditorexplains:
Wefetishizetheideathatgranniesandgranddadsmuststayintheirfamilyhomesalltheirlife.Why?Sotheycancloseoffrooms,astheyaretooexpensivetoheat?It’sunderstandablethatpeoplehaveanemotionalattachmenttotheirhomes,andnoonecanorshouldbeforcedout.Theideaofspendingone’sfinalyearsinapokyone-bedflatwithnightmareneighbourshorrifiesmeasmuchasanybodyelse.Butadecent-sized,well-managedtwo-bedmansion-blockflat,alift,shopsandGPserviceswithinclosewalkingdistance?Nocartoworryabout,spaceforfamilytovisit,aparkclose
by?What’snottolike?21
There’squiteabitnottolikeaboutleaseholdmansionblocks:allmannerofhiddencostsinthewayofservicechargesandhugelumpsumsdemandedwithoutnoticefor
![Page 338: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/338.jpg)
potentiallyfictitiousbuildingrepairs.Purchasingaleaseholdinsuchablockcanentailgreatinsecurity.ThisispartofthereasonwhymostofthesparehousingcapacityinBritainisnotheldinland-banks,norisitinboarded-uphomes.Oursparehousingcapacityis,infact,mostlyinhomesthatareonlyverypartiallyoccupied.LaterI’llprovidefigurestoshowthatmostbedroomsarenotsleptinmostnightsintheUK!Thisisnotbecausepeoplearesecretlysneakingoutoftheirbedroomandintosomeoneelse’sbed;itisbecausewehavesomanysparebedrooms.Wehaveenough,infact,toalloweveryfamilywithchildrenandeverychildlesscoupletohaveasparebedroom,withmanymoreleftspareafterthat.
![Page 339: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/339.jpg)
Itisnotthatsingleelderlypeopleshouldbeforcedoutoflargerhomes.Almostallthatoccupysuchhomesownthemoutright.Butalmostanyencouragementtodownsizewouldhelpthesituationgreatly.Ifapersonforsomereasonwishestoliveinamansionfullofmanyemptybedroomsthatshouldbetheirright,butitwouldbefairiftheirlevelofcouncilorotherpropertytaxreflectedtheimpactthatexercisingthisrighthasoneveryoneelse.Atpresenttheyusuallyreceivea25%discountontheircounciltaxforbeingasingle-personhousehold.Thatdiscountdistortshowcounciltaxcouldbetterworkasanincentiveforeveryonetofitbetterintothestockwehave,buttherearemanyotherpoliciesthatareneededas
![Page 340: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/340.jpg)
well.Ifmeasuresweretakentomoveeconomicactivity,governmentadministration,universitystudentplacesandmuchmoretowardsareaswithsurplushousing,andifunderoccupationwasdiscouragedbyrevisedpropertytaxation,everyoneinBritaincouldbeadequatelyhousedwithintheexistingstock.Theprinciplewouldbeakinto‘thepolluterpays’,butreplacetheword‘polluter’with‘hoarder’.Iamnotsayingthatmorehomes
beingbuiltwouldnothelp;Iamsayingthatmorehomesalonearenottheanswer.Thereisonescenario,alreadytoucheduponabove,whereitwouldmakesensetobeginagreathome-buildingprogramme,anditisascenariothatshouldnotbeignored,giventwocurrentglobaltrends:the
![Page 341: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/341.jpg)
risingdominancebothoftheEnglishlanguageandofLondonasapointofattraction.IfmanymoremigrantsweretocometoBritain,muchmorehome-buildingwouldbeneeded.Shouldthegovernmentbeserious
aboutcurbingimmigration,orshouldtherestofEuropestarttouseEnglishfarmoreasthelanguageofbusinessinparticularcities,home-buildingintheUKwon’tsimplycease.Buildinghomesisalittlelikebuildingmotorwaysinanareawherepopulationgrowthhasbeenfalling.Ifyoubuildmoreroadsinsuchanarea,moreandmorepeoplewilldrivealone,andmorewilldrivefurtherandforlongertowork.HereinBritain,incontrastwithmoreequitableaffluentcountries,better-offcouplesoftenowntwohomes,
![Page 342: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/342.jpg)
withonealmostalwaysempty.Thus,evenwithoutmorepeoplecoming,wecanfindusesformoredwellings,but,asourincomeandwealthinequalitiesgrow,theseareusuallynotveryefficientoroftenfairuses.Theanalogywithrisingsingle-
occupantcaruseisworththinkingaboutalittlelonger.Clearlyitisfarbettertohavefourpeopleinacarthanone.Alittlemorefuelisusedduetotheadditionalweight,butnotmuch,andmuchlessincomparisonwitheachofthosefourpeopledrivingtheirowncar.However,themorescatteredpeople’sjourneysbecome,andthemorereliantpeoplebecomeoncarsforotherpartsoftheirlives–toferrychildrentochildcareandlatertoandfromschool,forshoppingandfor
![Page 343: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/343.jpg)
recreation–themorelikelyyouaretofindmorecars,oftenalmostallcars,withjustonepersoninthem.Thisiseventhecasewhenatsomepointstherearepassengersinthecaratthestartofthejourney.Oncetheschoolchildrenaredroppedoff,thedriverdrivesbackalone.Similarly,adwellingthatisjust
hometoonepersonisalmostasexpensivetoheatandlightasonebeingusedbyseveralpeople.Arowofsingle-occupanthomesresultsinarowofdustbinsallneedingtobeemptied,whilemanyseparatetelephoneandinternetconnectionsallneedtobemaintained.Separatewaterbills,aseparatesetofroofsandgutteringtobelookedafter:thecostperpersonoflow-densityoccupationisveryhigh.Noneof
![Page 344: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/344.jpg)
thesepointsmeanthatitisnotpossibleformanypeopletolivealone,shouldtheywishto.Infact,itisinmoreequitableaffluentcountriesthatthehighestproportionsofsolo-dwellersarefound.Swedenhasthehighestproportionofanywhereintheworld:singleadultsoccupy47%ofallSwedishdwellings.InNorway,40%ofhouseholdshavejustoneresident,andinsimilarlyeconomicallyequitableJapanitis30%.22Butinallthosecountriesthisisachievedbynotwastingsomuchoftherestofthehousingstockthroughunderoccupancy,andbyhavinganincreasingproportionofdwellingsbeingbuiltfor(orconvertedfor)solo-use.23
![Page 345: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/345.jpg)
BuildingmanymorehomeswithoutmanymorepeoplecomingintotheUKwillnotnecessarilyresultinreducedovercrowding.Alargepartofthereasonforthisisthat,aseconomicinequalitiesrise,poorerhouseholdsareforcedtocrowdintowhateverpropertytheycanget,allowingmoreaffluenthouseholdstospreadthemselvesoutamongstthestockthatisleft.Theaffluentarethenmorelikelytotrytoliveawayfromtheovercrowdedpoor,andsomovefurtherandfurtheroutoftown,ofteninnew-builthomes.Buttheystillneedtodriveortotakethetraintowork.Insuchcircumstances,toseewhathappensifweweretobuildmorehomesinsouthernEngland,say,itmayhelptolookatasurprisingsituationinan
![Page 346: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/346.jpg)
ex-colony.ThistimeitisnotthetinyislandofSingapore,butthegiantcontinentalislandofAustralia.Australiashowswhatoccurswhen
therearefewrestrictionsonhome-building.Despitehavingarelativelylowpopulation,Australiahassomeofthelongestcommutetimesintheworld,becausethelackofplanningrestrictionshasresultedinverylow-densityhousingsprawl.What’smore,Sydneyhassomeofthehighesthousingpricesintheworld,becausetheprivatemarketwasallowedto‘finditslevel’,withoutmuchplanningorinterventiontoconsidertheaggregatenegativeeffectsofeveryindividualselfishaction.Onepersonchoosingtobuildahomewithalargegardendoesnotjustaffectthatoneperson.Everyone
![Page 347: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/347.jpg)
whothenhastolivefurtheroutoftownhastodrivepastthatgarden.Multiplythisbymanythousandsofdreamone-acreplotsandyoueachspendthousandsofhoursofyourlifetimeinextraunnecessarydrivingpastalltheseenormousgardens,justtoalloweachofyoutogettospendafewhoursweedingyourverylargeshrubberies.Theconventionalwisdomin
housingresearchproposesthatthereisenoughpent-up‘demographic’demandtofillmorehomes,evenifnetimmigrationweretoreducetozero–especiallyintheoverheatedhousingmarketofsouth-eastEngland.Risingdemographicdemand–includingallthedivorcestocome,stayingsingleforeverandageing,whichwehopewewillgetto
![Page 348: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/348.jpg)
enjoy–willcausehousingtobeusedupbythosewhocanaffordit.Aswelivelonger,therearemoreofusaroundtobehoused.Advocatesofthesimplisticfree-marketapproachsaythatrebalancinghousingsupply,asbuildersbuild,tomeetthislatentdemandshouldreducehouseprices,therebymakinghousingmoreaffordableandturninglatentdemandintoactualdemand;butthatworkswellonlywhenallconsumersareeconomicallymoreequal.Thetheorythatpriceswillfall
requiresanassumptionthat‘hoarders’ofvacanthousing,andofthespaceoccupiedbyverylargegardens(onwhichnewhousingcouldbebuilt),wouldputtheirstockandlandonthemarketiftheyfeltpriceswouldnotrisemuchfurtherin
![Page 349: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/349.jpg)
future–thatis,ifnowwasexactlytherighttimetosellanddelaywouldmeanlosingout.ThispointoffallingpricesisrarelyachievedinBritainandusuallythenonlyfleetingly.However,thethreatofbeingtaxedinthenearfutureforhoardingspacewouldbeanevengreaterincentivetosellthanworryoverfallingfuturelandvalues;and,ofcourse,thethreatoflandtaxationshouldleadtolandvaluesfallinginfuture.Landuponwhichyoupayanannualtaxbecomesuneconomictoholdempty.Butamarketforsmallerhomes
forsmallerhouseholdsrequiresthosehouseholdstobeabletobuyandrentatlowerlevelsthannow–butnottoolow.Allthis,however,ignoreshowunevenlyincomeandwealth–andhenceeffectivedemand–isnow
![Page 350: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/350.jpg)
distributedintheUK.Thegulfbetweenrichandpoorhasbecomesogreatthateitherincomesatthebottomhavetorise,orrentsandpriceshavetofallgreatly,beforetherecanbemuchreconciliation.Theusualsuggestiontothisquandaryissimplytoadvocatemorehome-building–muchmorebuilding.Civiccampaignstobuildareagain
growing.AtdifferenttimesintheUK’srecentandmoredistantpasttherehasbeenrisingandthenfallingpublicpressuretobuild.Todayonegroup,Audacity,arguesthatthereisaneedtobuildfivemillionhomeswithinthenexttenyears,whilealsodemolishingmanysubstandardhomesratherthanpatchingthemup.Audacitydoeshaveapoint:housing
![Page 351: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/351.jpg)
doesn’tlastforever;itwearsout.AudacityseesinertiaastheresultofagreatcontractionintheUKhousingindustry.Itadvocatesareturntotheenergetichome-buildingthatwelasthadinthe1930s,1950sand1960s.Audacitysuggeststhatmost
peopleinBritainexpecttoowntheirhomesoncetheirmortgagesarepaidoff;orhopetogetonthehousingladder;orarealreadyoutrightowners.Thistrinityoftenuregroupsmakesupamajority,theyclaim,thatfavourssustainedhousepriceinflationsothattheycansubsequentlyraisecashbyreleasingequityintheirproperty.Theproblem,theysuggest,isthatamajoritythinktheywillbenefitfromtheladderitselfbeingraisedup.But
![Page 352: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/352.jpg)
themajoritymaywellfindoutthattheyarewrong.Eventheveryphrase‘housing
ladder’entrenchestheideaofpropertyasaspeculation.ItimpliesthathousingisasuccessfulPonzischeme,oneinwhichearlierinvestors’profitscomedirectlyfromtheinputoflaterinvestors.Climbonboardandyoutoowilleventuallywinattheexpenseofsomesuckerbelowyou.ButallPonzischemeseventuallyfail.Everyonecannotgetrichquickattheexpenseoffuturepropertybuyers,especiallyaswehavebeenhavingfewerthantwochildrenpercoupleinBritainformanydecadesnow.Ponzischemesworkonlyforaslongasthereisareadyandeverlargersupplyofnewcustomerstobeduped.
![Page 353: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/353.jpg)
Theyoungerhalfofthepopulationwillnotbenefitfromrisingrentsandhousingprices.Theyneedaffordableandcomfortablehomesforthemselvesnow,andvaluethisneedwayabovemakingafutureprofit.Butmanyyoungerpeoplecannotgeteventhat,whenamajorityoftheolderagegroup,andespeciallyafewmuchricherindividuals,areallowedtoprofitgreatly.Evenamongtheelderly,sustainedhousepriceinflationdividestherichpensioner,whocanleavetheirgrandchildrenafortune,fromthepoorpensionerswhorentandwillleaveverylittle.Theusualpatternofhousing
transitionsisthatpeopleendupstrugglingforhousingwhentheyareyoungandthenrattlearoundinoversizedpropertywhentheyare
![Page 354: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/354.jpg)
old.However,fewerandfewerpeoplearenowaverageintheincometheyreceive;thispatternreliedonfarmorepredictableandfairlyrewardedemploymentthanwehavetoday,eveningouthousingfortunesoveralifetime.Itwillbemuchhardertosustainintothefuture.EvenifAudacityweretomanage
tocreateanenvironmentinwhichmanyhomescouldbebuiltquickly,ouremploymentprofilehaschangedsomuch,sorecently,thattheycouldnotsimplyallbeboughtbycouplesandindividualsbeinglentmoneyandpayingitbackinlargemonthlyinstalments(oftensome300suchpayments–twenty-fiveyearstimestwelvemonths)withoutfault!Youcannotjustbuildandexpectpeople
![Page 355: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/355.jpg)
tobuy,reliably,whenyounolongeremploythemreliably.Furthermore,verylittlehousinginBritainissobadlydeterioratedthatitisattheendofitsfeasible‘life’.Wedon’tyethavetobuildthatmuchtoreplacewhathastobereplacedbecauseitcannotbemaintained.Onlysomereallybadly‘systembuilt’propertyfromthe1960sand1970sistooexpensivetorenovate.24
RENOVATIONANDREALITY
Full-scalerefurbishmentoftheentireUKhousingstockcouldsupport4.7millionjobsandadd£280billiontotheeconomy.
–Oxfam,201225
Itisoddthattodayithasbecomethejobofananti-povertycharitytorecognizehowrefurbishingproperty
![Page 356: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/356.jpg)
tocreatebetterhousing,ratherthanbuildingsomuchanew,couldresultinabettersociety.TheUKgovernmentappearsunabletoseethelinks,letaloneact,promotingafewloft-insulationschemes,butnothingthatevenapproachesatenthofwhatOxfamsuggestsabove.Oxfam’sestimatesarederivedfromresearchcarriedoutbytheEnergySavingTrust,andOxfamitselfsaysamoremodestprogrammecouldalsobeimplemented.Thefullproposedprogrammeof
bringingexistingUKhousinguptoscratchwouldhavemassivelong-termbenefits,suchassaving£8.7billionayearondomesticenergybills,anditisestimatedthattheresultingcutsinCO2emissionswouldbe48milliontonnesayear.
![Page 357: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/357.jpg)
Oxfamsuggeststhatinvestinginretrofittinghastheadvantageofcreatingjobsquickly;themoneyremainsintheUK,boostingtheeconomy;moreroomscouldbeaddedtopropertythatistoosmall;andtheenvironmentaldamagefromhugeamountsofnewbuildingisavoided.Reducingenvironmentaldamageisnotnecessarilyanabstractconcept.Forinstance,muchlandinthesouththatisn’tbuiltonisfloodplain.Itmakessensetoleaveitasthat,ifyouwishtoseefewerpropertiesfloodedeachyear.Governmentstendtobelievethat
property-ownersandproperty-buyers,landlordsandmortgagors,havesuchahugevestedinterestintheirpropertythattheywilllookafteritwell,buildingonlywhereitis
![Page 358: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/358.jpg)
sensibletobuild,andmaintaininghousingtoagoodstandardtomaximizetheirrentorsaleprice.However,ifrenovatinghomesdoesnotincreasetheirsalevaluebymorethanthecostoftherenovation,theincentiveisnothigh,nomatterhowmuchsuchactionmightreduceenergyconsumptionandwasteinfuture.Forlandlordsthosearethetenants’problemsandcosts.Formortgagorsandoutrightowners,futuredifficultiesduetocurrentneglectaremostlytheproblemofthepeopletheywillbesellingonto.Asthehousingmarketinthesouth-eastofEnglandoverheatedinlatesummer2013,sellersdidnotevenbothertotidyuptheirpropertyforviewers,letalonepaintorplasterafewdodgywalls.Theyknewthey
![Page 359: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/359.jpg)
couldsell,regardlessofhowtheirhomelooked,asbuyersweresoafraidofmissingtheboatwhenpricesrose.Justasindividualscannotbe
expectedtomaintaintheroadsurfaceoutsidetheirownhome,orworkouthowtomakeasewersystemoperatewell,sotoowecannotrelyonindividuals’self-interesttoensurethatweadequatelyrenewthehousingstock.Weneedtoensurethatwhatwehavelastsforlongerthanitotherwisewould,thatitisaswellinsulatedasitcanbe,andascomfortabletoliveinaspossible.Thathastobecoordinatedandproperlyplanned.Occasionallythereareschemessetuptohelplandlordsandpoorerhomeownerstorenovatetheirproperty,butastheystandthese
![Page 360: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/360.jpg)
tendjusttosavelandlordsalittleexpense,andwhatwehavedonetodatehasnotresultedinveryhighstandardsofresidentialbuildingmaintenanceacrossthecountry.Peoplewhocometorentfromabroadareoftenshockedbythestateofwhattheyareoffered:byhowcoldmanyofourhomesare,howbadlysoundproofed,howbadlykeptup.Agovernmentwithadifferentset
ofprioritiescouldachieveagreatdeal.ImagineamoreenvironmentallyandsociallyawaregovernmentsimplycommittedtoachievingatenthoftheagendasuggestedbyOxfaminthequotationabove–generating470,000jobsinarefurbishmentprojectthatwouldsave‘just’£870millionayearon
![Page 361: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/361.jpg)
energybills.Buttoactsosensibly,collectively,requiresbothlong-termplanningandpoliticalcourage,qualitiesthatcurrentlyappeartobeinshortsupply.Itrequirescouragebecausefinancialexpertsopposedtosuchcooperativeactionwillsayitiseconomicallyimpossible.‘Letthemarketfinditsownlevel’
istherepetitiverefrainoftheright,treatinghousingasifitwereacommodity,aconsumeritemthatshouldfinditscorrectprice,itsequilibriumlevel,throughtheapparent‘laws’ofsupplyanddemand.Thissupply-and-demandmechanismwill,sotheorthodoxargumentgoes,balanceoutpeopleandhousing.Shouldtherenotbeenoughhomesforpeople,theonlythingstoppingmorehomesbeing
![Page 362: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/362.jpg)
builtmustbegovernmentregulationand,accordingtothiswayofthinking,lessregulationisthereforeneeded.Butthosecommentatorswhoconstantlycallforlessregulationignorethewaythatsomanyhomeswereprovidedinthepast:theywerebuiltbygovernment,orbuiltusingmonieslentorgiftedbygovernment.Theyalsoignorethefactthatpeopleareusuallybetterhousedinthoseaffluentcountriesthatpossesstightregulationandwell-plannedhousingarrangements.Theyignorethefailureofthemarketinthepasttosupplyenoughhousingofahighenoughquality,aswellasthepervasivenessofslumlandlordsandcowboybuilderswhenandwhereregulationisabsent.
![Page 363: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/363.jpg)
![Page 364: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/364.jpg)
ThisphotographshowsthefrontofaGeorgian-erahomeinSharrow,Sheffield,formerlyusedasasquat.Notehoweventhe
smallwindowabovethedoorhasbeenboardeduptomakere-entrymoredifficult.Whenwepasssuchhomesweneedtoaskwhytheyareboardedup.Theremaybemanysuperficialreasons,butunderlyingthoseishowwehavechosentoarrangeoureconomy.Themoreinequitably
incomeandwealtharedistributedinBritain,themorepeopletherewillbewhocannotaffordto
rentorbuy,andthemorehomeswillstandempty,waitingforsomeonewhocanaffordthem.
Squattingcanbeseenasanindicatorofahousingsystemincrisis.Theworsethenormalhousingsystemofallocatingpeopletohomesbecomes,themorepeoplewillsquat.Thenthemoredraconianwillbecomethedefencessetuptoprotectemptypropertyfrombeingusedby
squatters,untilthewholeexerciseceasestobeeconomicallysustainable.MillionsoffamiliesintheUnitedStatesare,ineffect,squatting:theynolongerpaythemortgage,butcontinuetolivein
theproperty.
Allthisbringsusbacktooneofthisbook’scentralpremises:thatthefundamentalprobleminBritain–
![Page 365: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/365.jpg)
andinotherWesterncountries–isnotashortageofhomes.InJuly2012thepropertywebsiterightmove.co.ukrecordeda1.7%dropinhousepricesthatmonth,withtwofamiliestryingtosellforeveryfamilytryingtobuy.26Pricesfellbyafurther2.4%thefollowingmonth,andslightlyagaininSeptember;theynextroseby3.4%inOctober,butfellby2.6%inNovember,andthenbyafurther3.3%inDecember.Youmightthinkthatthiswasbecausethesummerisusuallyquieter,butbythenextsummer,thatof2013,priceswerereportedtoberisingagaininpartsofthesouth-eastandthosedropswereforgotten.Withinfivemonthsofhousingpricesfalling,therecordingofafewrisesinJulyandAugust2013resultedintalkofa
![Page 366: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/366.jpg)
bubbleonceagainforming,talkreportedearlierinthepagesofthisbook.Then,September2013,fallswerereportedinpricesinWestminster(reportedbelowinthisbook),allofwhichfurtherillustratesjusthowvolatileisthetimethatwearelivingthrough.InJanuary2013nationalaverage
UKhousingpricesrosebyjust0.2%,buttheninFebruarylendingslumped‘bythebiggestmonthlyamountinmorethanfifteenyears’.27
Bothsalesandpricesweredown.IntheyeartoMarch2013therewasareported16%fallinthenumberofpropertiesbeingsoldatpricesofbetween£2millionand£3millioninLondon.28Threemonthslaterthesummernewspaperstalkedofeconomicrecoveryandthepricesof
![Page 367: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/367.jpg)
fairlyaveragetwo-bedpropertiesincentralLondonsoonroutinelyexceeding£1million.29So,inMarch2013,wehadsupplyexceedingdemand,butbyAugustwehadfarmoredemandthansupplyformultimillion-poundLondonproperties.Theextremeendofthemarket
showsnicelyhowsimplesupplyanddemandbalancingdoesnotworkforgoodsasbulkyashousing.Itisnotpossibletoquicklyandeasilyproducemorehomeswhendemandrises,especiallywhenitcomestohomesinthecentreofLondon.Butthere,atleast,demandismoreaboutspeculationandinvestmentthanneed,althoughmanypeopledoneedtobeabletosleepclosetothecentreofthecapitaltodothejobstheydo.
![Page 368: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/368.jpg)
Conversely,whenpricesfallitisnotsimplyamatterofstabilizingtheprice,especiallywhenpeoplehavetomovehomebetweencitiesforanewjob,retirementortohouseagrowingfamily.Realhousingdemandincreasesas
familiessplitup;asjobsarecreatedinanareaandpeoplemovein;asmorechildrenbecomeadultsandwanttoleavehometostarttheirownfamily.Whenasinglehouseholdiscreatedbythemergingofhouseholds,demandfalls,buttwohouseholdssqueezingintoonehomeisrare.Itcanoccurwhenseparatedparentsmeetnewpartnersandmoveinwiththem,bringingthechildrentogethertocreateanewmergedfamily,butthatrequiresmorespaceinitself.
![Page 369: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/369.jpg)
Supplyisreducedwhenin-migrationtoanareaandthesplittingofhouseholdswithinitexceedthenumbersofpropertiesbecomingvacantduetoout-migrationfromanarea,movesintoretirementhomesorsimplythedeathsofoccupants.However,realhousingdemandisoftennotbackedbythefinanceneededtomakeit‘effective’demand.Partofthereasonthatwethinkwe
needmorehousingbuiltnowisthatsomanyfamiliesdivorceanddonotquicklyreconstituteintonewfamilies.Areconstitutedfamilyconsistsofacouple,wheresomeofthechildrenarehis,andsomearehers.Beforethereisanychanceofsuchreconstitutionofsplit-uphouseholdsintonewhouseholds,
![Page 370: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/370.jpg)
moreandmorechildrenhaveabedroomatMum’s,andalsooneatDad’s.Familiessplittingupandnewfamiliesbeingformedmeanthatweneedmorespaceinourhousingsystemasawholetofacilitatethemusical-chairsgameofsortingourselvesintonewrelationships.Higherratesofseparationrequiremorespaceinhousing.Andpeoplearemorelikelytoseparateduringafinancialcrisis,whengreaterunemploymentandprecariousemploymentaddtoeveryone’sstress.Analternativejoined-uphousing
andemploymentpolicyshouldrecognizethattheincreaseinincomeinequalitysince1970meanswenowusehousesfarmoreinefficiently:notonlydivorcingcouples,butsecond-,
![Page 371: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/371.jpg)
third-andfourth-homeowners;couples(andevensingleadults)withnochildrenbutlargedwellings;andthoseoccupyingprivate-sectorfamilyhouseswithmanysparebedrooms.Thegrowthofallthesenewhouseholdconfigurations,farmorethananincreaseinpopulation,contributesgreatlytoouroverallhousingshortage;thisisthenexacerbatedbyrichandsuper-richmultiple-homepurchasing;moreandmorepropertythatisoftenleftvacant.Alltheseproblemsareenhancedasmoreandmoreofthepopulationtriestofitintothesouth-eastofEngland,wherethereisthefewestnumberofhomesforsaleforthosewhoneedthemthemost.
![Page 372: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/372.jpg)
![Page 373: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/373.jpg)
Neweco-homesbuiltintheArbourthorneneighbourhoodinsouth-eastSheffield.Notethesolarpanelstiltingtothesunontheroofofthepropertyfurthestaway.InthenorthofEnglandyouneedmoreofanangularadvantagethaninthesouthtocatchenoughsunlight.Homesbuiltwiththelong-terminterestsofourenvironment
inmindareoftendismissedascostlyextravagances,butiftheextraeffortrequiredtoavoididentikitmodernboxesisqualifiedmainlyasanincreaseinlabourcosts,thenbuildingeco-homescancreatemorejobsperhomebuiltthanconventionalconstruction.Changinghowwebuildwilltaketime.Forhomeslikethistobe
builtingreaternumbersinplaceslikeArbourthorne,uponlandthathasbeenusedforbuildingonintherecentpast,thereneedtobe
morenewjobsinSheffieldandfewernewjobsinthesouthofEngland,wherealmostalltheexpansesofsparelandarenowgreenbelt.
Notethatthispointaboutunder-useoftheexistinghousinginBritainhasalmostnothingtodowiththeBedroomTaxbeingappliedtoworking-agesocialhousingtenants,
![Page 374: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/374.jpg)
whoonaverageusehousingmostefficientlyofall.Itisaboutthepeoplewhohavelittleneedformuchofthespacetheyhave,notjustoneextrabedroom,butmuchmorethattheycanaffordtokeepvacant.AlmostalltheemptypropertyintheUKisownedbysomeonewhoknowsitisempty,justasmuchofthehousingindisrepairisownedbysomeonewhocouldrepairit,shouldtheychooseto.Ifalandlordclaimsthathedoesnothavethemoneyneededtorefurbishahome,asktowhatuseheputstherenthereceivesfromhisproperties.Maintainingagoodstockof
housingisnotjustaboutbuildingreplacementpropertiesforthoseworn-outoldhomes.Itisasmuchaboutrepairingandmaintaining
![Page 375: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/375.jpg)
existingproperty;homescanberepairedandrefittedtoremainfitforpurposewellbeyondtheiroriginaldesigndate.Oftenpropertyisleftemptybecausetheownerhasnotbotheredtogetaroundtodecoratingittorentout.Butnewpolicyisnotencouragingthis.On15November2012theBritishgovernmentchangedthelawonemptyproperties,sothattheycouldbeleftemptybytheirownersforuptotwoyearsbeforeanyactionmightbetakenbyalocalauthority;previouslySection134(2)(a)oftheHousingAct2004,madelawbytheLabourgovernment,hadmandatedsixmonths.30
Governmentshavenotbeenentirelytoothlesswhenitcomestotheneedtotrytobringemptyandabandonedpropertybackintouse.
![Page 376: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/376.jpg)
Butwhenonegovernmentfinallywasalittlebitinnovativeandintroducedalawgivinglocalauthoritiesthepowertointervene,thenextgovernmentquicklywatereddownthatlaw.Previouslytheauthoritieswereallowedtointerveneifnothingwasdonetowhatappearedtobeanabandoneddwellingspace,inanareawheretherewashousingneed.Thechangeinthislawwill,ofcourse,allowperfectlyrenovatedpropertytostandemptyforlongernow;theownercandeliberatelynotmarketthepropertyiftheysodesire.Thepointoftheprevioushalf-yearlimitwastoencouragethosewithemptypropertiestorentthemout,and,iftheyneededrenovationordecoration,todothatquickly,beforethelocalauthoritytookoverthe
![Page 377: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/377.jpg)
property.Changingthetimelimittotwoyearsencourageslandlordstotaketheirtime.Itencouragesmorehoardingofemptyproperty.Itkeepsupthepriceofthatpropertyandmakeshousingintotalmoreexpensive.The‘useitorloseitaftersixmonths’policy,ifbetterenactedratherthansimplybeingrescinded,wouldhelppeopletolearnnottohoardandbringdownprices,withrentsthencomingdownasaconsequence.Clearly,ensuringthatemptyand
dilapidatedhousingisquicklybroughtuptoscratchisnotacurrentpolicypriority;governmentsdon’ttendtogetplauditsforensuringthatflimsysingleglazingisreplacedbydoubleglazing,encouraginginsulationofcavitywallsandroofs,
![Page 378: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/378.jpg)
andsoon.Sociallandlordscannowgetgrantstoinsulate,fundedfromthegreenleviesonfuelbills,butsuchgrantswerebeingcuttowardstheendof2013,notlongaftertheywereintroduced.31Votersdonotappeartorecognizethatagovernmentthathelpedtoensurethatlesshousingwasemptywouldhelpeveryonefitinmoreeasily.This–theeverydayrealityoftheupkeep,fillingandmodernizingofourhousingstock–soundslikebureaucraticred-tapeandappearstobefarlessofaheadline-grabbinginitiativethan‘buildingnewhomes’.Yettheseareinitiativesthatgovernmentsmighteasilyimplementmorewidelyandthatallalreadyexistinalimitedform.
![Page 379: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/379.jpg)
Itisunlikelythatthepartiesthatformthecurrentgovernmentthinktheywilllosemorevotesfromlandlordsthangainthemfromprospectivetenants.Therearemanymoretenantsandprospectivetenants,incomparisonwiththenumberoflandlords.Ithasbeensuggestedthatasfewas2%ofallpeopleinBritainarelandlords.32
Why,then,doesgovernmentallowsomuchpropertythatcouldberentedouttobeleftstandingemptyforsolong?Whydoesitfailtoensurethatprivatepropertyisbroughtuptoarentablestandardifthebuildingbecomesemptyformorethansixmonths?Itishardnottoconcludethatwhenministersincreasedthetimelimitbeforealocalauthoritycouldacttheydidso
![Page 380: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/380.jpg)
becauseoflobbyingfromafewveryrichandverywell-connectedpeoplewithvestedinterests–thosewhowantedtobefreetokeepalotoftheirpropertyemptyuntilthemarketwasrightforthem,thosewhoownmorepropertythantheyneed.Whatotherreasoncouldtherebe?Whenonegenerationor
governmentneglectsthemaintenanceofhousing,therepairbillforthenextgrowsdisproportionately.Britain’sNewLabourgovernmentreceivedlittleacknowledgementforallthehomesitensuredweremadedecentwhileitheldoffice,housingthathadsuffereddecadesofneglect.True,itdidnotboastaboutthefigures,probablybecauseitdidnotwanttobeseentobeespeciallyfavouringLabour’s
![Page 381: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/381.jpg)
moretraditionalsupporters,thosewhohavetheleast.However,Labourcouldhavemadewiderargumentstodefenditslargerepairprogrammeofsomuchsocialhousingbetweentheyears1997and2010.Keepinghousingingoodrepairisremarkablymoreenvironmentallyefficientincomparisonwithdemolitionandrebuilding.Concreteproductionisamongthemainsourcesofcarbonpollutionworldwide.Large-scalerefurbishment
schemesdofarmorethanimprovethestateofmanyindividualhouses.Theycanrevitalizesinkestates,ensuretheupkeepoflong-establishedroadsandsewersbuiltdecadesago,andavoidtheneedforbuildingongreenfieldsites.Wherethesituationisoneofextremedecay,
![Page 382: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/382.jpg)
therefurbishmentsolutionscanbemoreradical.NarrowVictorianterracedhousingcanbeadaptedbyknockingdoorsthroughthewallsandconvertingtwotinypropertiesintoonedesirableone.ThishasbeendoneinseveralpartsofthenorthofEngland,whereotherwisetheterracesmayhavefaceddemolition.But,ofcourse,thequestionofrepairinghomesdependsnotonengineeringbutoneconomics.Duringtheslumclearancesofthe1960slargeswathesoftheLondonboroughofIslington–largelynineteenth-centuryurbandevelopment–wereearmarkedfordemolition.Protestersandlocalresidentsfoughtagainsttheplansandwon.Now,muchofthatoldhousing,oncedestinedfor
![Page 383: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/383.jpg)
demolition,isamongsomeofthemostexpensiveintheworld.However,theeconomicsofpreservingandrenovatingnineteenth-centuryhousinginthenorthofEngland,Wales,NorthernIrelandandScotlandbecomeharderandhardertosustainasthecountrytipseconomicallyonitsaxis,weigheddownbythegrowingpaperwealthofthesouth.Thevalueofsomenorthernterracesisnowsolowthatknockingtwointoone,inplaceswheretherearefewerandfewerjobs,onlyproducesgood-sizedhousesinareaswherepeoplearenolongerabletolive.Agood-sizedhouseinthepoorestpartsofthenorthisnotworththatmuchinmonetaryterms,butitisworthalotassomewheretocallhome.
![Page 384: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/384.jpg)
Decayingstockcanbemaintained–eventherustedironwall-tiesthatkeptthebrickworkofmanyveryoldhomesstraightinthepastandultimatelystopahousecollapsingcanbereplaced–ifthereisawill.But,ifyouleaveallthistothemarket,ratherthanlistentoprotestersandothersadvocatingadifferentpolicy,millionswillbespentonprivatelyretainingandgreatlyimprovingthedecorationofjustatinyproportionofthenationalstock–moneythatcouldhavebeenbetterspentspreadoverfarmoreproperties.Itisnotaneither/orsituation,butcurrentlyadisproportionateshareofthenations’buildersareworkingonmakeoversofmansionsthathavenotevenhadtimetobecomeslightlyshabbysince
![Page 385: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/385.jpg)
theywerelastredecorated,ratherthanspreadingtheirworkovertheentirestock.Abetterpublic/privatemixofbuildingandrenovationisneeded.Bothprotestersandplannerscan
helptoimprovehousing.Protestershavehelpedbyprotectingdecentoldstockfromdemolition,asin1960sIslington;orbyhighlightingwhenoldcouncilestatesareturnedovertospeculatorswhowishtobuildofficeblocks;orbyspraypaintingthewindowsofestateagentsmovingintoanareatotrytogentrifyitbeyondthereachoflocals’budgets.Planningregulationsareoftenblamedforlimitinghousingsupply,buttheyalsoensurethathomesareproperlyproportionedsothat,forexample,theycanaccommodate
![Page 386: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/386.jpg)
wheelchairs.Asanageingpopulation,farmoreofuswillbeinthosechairsinfuture.Farmoreofuswilllivelongenoughtospendourfinalyearssufferingfromdisabilities,includingoftenbecomingblind.Inwhatkindofahomedoyouwanttoliveandgrowold?Whenitcomestohowweare
housed,it’sworththinkingnotjustofthepropertywemightoccupy,butofthesortofneighbourhoodswherewemightwanttolive.Doyouwanttoenjoyonethathasbeenplannedandcaredfor;aplacewherepeoplehaveworkedtoensurethatthereareenoughjobs,enoughschoolsandenoughshopsnearby–orjustaneighbourhoodwherepeoplepoorerthanyoucannotaffordtolive,and
![Page 387: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/387.jpg)
peoplericherthanyouwouldnotwanttolive?
LOCATION,LOCATION
MostinnerLondonboroughsarelikelytobecomealmostentirelyunaffordabletolow-incometenantsonLHA[LocalHousingAllowance]by2016…Theareaswhichremainaffordablearecharacterizedbyhighratesofmultipledeprivationandunemploymentamongtheexistingpopulation.Weconcludethatthereformswillintensifythespatialconcentrationofdisadvantageinthecity,andincreasethesegregationofpoorandbetter-offhouseholdswithinLondon.
–AlexFenton,CambridgeCentreforHousing
andPlanningResearch,201133
Thewayinwhichwechoosetoarrangeandchangeourhousingdeterminesthewayinwhichwelive.
![Page 388: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/388.jpg)
IntheUKwearecurrentlychoosingpoliticianswhohaveatrackrecordofpickingpoliciesthatpolarizesociety.Itmaybetheprevailingpoliticalcultureofourtimes,ratherthantheindividualpoliticiansthemselves,buttheeffectofourrecentchoiceshasbeentorewardgreatselfishness,orwhattheymightcallaspiration,whichtheninturnmakesusallwanttoaspiretohavingmuchmore,ofwinningsomelottery.Thequoteaboveisfromthe
conclusionofafarsighted2011reportwrittenbyanacademicthenbasedattheUniversityofCambridge.ThepolarizationthatAlexFentontalksaboutisnotjustcurrentlyoccurringinLondon,orjustinthesouth-east,orevenjustintheUKmorebroadly.ButtheUK
![Page 389: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/389.jpg)
situationisespeciallytelling,becauseitillustrateswhathappenswhensocietiesgrowincreasinglyunequal.Londonisaheadofthecurvewhenitcomestohousingpolicythatincreasesinequalities.ItisthemosteconomicallyunequalcityinBritain,and–bywealthdistribution–possiblythemostunequalintheentirerichworld.Withinlessthanayearofthe
coalitiongovernmentgainingpowerin2010,storieshadbeguntocirculatethatmanyofLondon’spoorweresoontoberehousedoutsidethecity.Thismostrecentattackonthepoor,whichbecameanissueofsegregation,happenedfirstandmostferociouslyinLondon,becauseitisinLondonthatmoreroomisrequiredforthemiddleandnew
![Page 390: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/390.jpg)
upperclassesofthecountry,andwheretheyincreasinglyneedtobe.34
Overrecentdecadestheproportionofupper-classindividualslivingoutsideofthecapital,initscommutinghinterland,hasfallen.Itisnotjustthatpartsofthecapitalaregentrifying,butthatthecapitalasawholeisbecomingmuchposher.35
Forthistohappen,fewerofthosewithlesscanbeallowedtoremainthere.Perhapsthosewhocanstaywillsoonbetermed‘thedeservingfew’.TheimplicationofrecentnuancesinofficialdocumentsisthatinsomepartsofLondonpoorerpeoplewillhavetoworkharderfortheprivilegeofcontinuingtoliveintheirhomes,aprivilegethatcouldbereconsideredandrenewedannuallybycouncilofficers.Recentlya
![Page 391: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/391.jpg)
documentleakedfromHammersmithandFulhamBoroughCouncilexplainedthatfromnowon‘Asocialhousingtenancywillneedtobeearnedanditsretentionworkedat.Itwillnolongernecessarilybepassedfromonegenerationtothenext.’36Inotherwords,ifyouareacouncilhometenantinthatborough,thegrown-upchildwithlearningdifficultieswhohaslivedwithyoufortheirentirelifemaybeevictedfromtheirhomewhenyou,thecurrenttenant,die.Evenbeforethatpoint,however,youtoomightbeevicted,togotoliveinamoredown-at-heelborough,ifyoudonotcontinuouslycomeuptoscratchinsomeway.Thesameisnottruefortheprivatesector,where,atleastoutsidemostofLondon,modest
![Page 392: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/392.jpg)
homes–thosewhosevaluefallsbelowtheinheritancetaxthreshold(lessthan£325,000)–canbepassedontogrown-upchildrenwhoalsoresideonlyinthatpropertywithoutthefearthattheywillbeevictedupontheirparent’sdeath.Thenewedictsinplacessuchas
HammersmithandFulhamBoroughCouncilsuggestthatsocialhousinginBritainmaybebecomingagifttobebestowedonthosewhoinfuturedofftheircapswellenoughtoretaintheirhome.Iftheirchildrendonotshowsimilarrespect,donot(toparaphrasefromabove)‘earntheretentionoftheirhomebyworkingatit’,theywillhavetoleavetheparish(theborough).Workingatitmightmeanneverbreakingthelaw,gainingabetterjobtopaythehigherrent,
![Page 393: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/393.jpg)
gettingcreditfromdoingabitofvoluntarycommunityservice.Thisisareturntoolder,poorersetsofrightsandlaws.TheleakedHammersmithandFulhamdocumentclaimedthatthesemeasureswereneededfor‘TacklingEconomicandSocialPolarization’.Inonewaytheywill.Aboroughbecomeslesspolarizedifyouevictthepoor.Asrentsrise,butthelocalhousingallowances,thehousingbenefitlevels,donotkeeppace,hundredsoffamilieswillberelocatedfromLondontotownssuchasStokeonTrent,Liverpool,Middlesbroughandfurthernorthandwest.Evenifthisdoesnothappendirectly,itwilloccurindirectly.
![Page 394: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/394.jpg)
![Page 395: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/395.jpg)
AterracedstreetintheSharrowneighbourhoodofSheffieldshowing,inthedistance,oneaddedskylight.Forgenerationsthewayinwhichwehavebuiltandadaptedhousinghasreflectedoursocialstructures.Mostofthehomesthatwerebuiltearlyinourhistorywerepeasanthovels,ofwhichlittleevidenceremains.Thenmoresolidhomeswerebuiltfortheworkingclasses,oftenslightlylargerpropertiesonstreetcornersfor
foremen’sfamilies.Todayhomeswherethefrontdooropensdirectlyontothestreetareseenaslessdesirable,whereasoncetheywerecoveted–
betterthanlivingupanalleyinarookery.However,placethehousespicturedaboveonastreetinLondon’sNottingHillandsuddenly,miraculously,theywouldagainbeseenas
wonderfulhomestolivein,especiallyfortheuppermiddleclassandtheupperclass,andtherewouldbemanymoreexpensiveloftconversionsandskylightsputin.Theextenttowhichallthisiscommonsensetoyou,orarevelation,dependsverymuchonwhereyoulive,inwhatkindofhousing,andhowoldyouare.Thelocationofapropertychangesthenatureofthatproperty.Whenhousingbecomessegregated,itisnot
becauseofthehousingbutratherbecauseofthechangesinsociety,theeconomyandthepoliticsintheplaceswherethathousinghappenstobe.
![Page 396: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/396.jpg)
WithinBritain(andmuchoftherestofEurope)thedebateoversegregation,aboutwhodeservesandwishestobehousedwhere,isnotonlyaboutrichandpoor,butaboutblackandwhite.Inmanylocalitiesthisnowincreasinglytranslatesinto‘Muslim’and‘non-Muslim’.RespondingtocommentsbyTrevorKavanagh,politicaleditoroftheSun,oneacademicexplainedearlyin2013thatthereiswidespreadconfusionoverthecurrentdirectionofsegregationinhousinginBritaintoday.HepointedoutthatKavanagh’ssuggestionthatMuslimsinBritainweregeographicallysegregatedwasnot,ingeneral,happening;thatwhereitwashappeningitwasnotnecessarilybecauseofreligion;and,evenifit
![Page 397: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/397.jpg)
wereduetothat,thatwouldnotnecessarilybeaproblem.He,RobFord,thenfinishedhisargumentbypointingoutthatKavanaghdidnotappeartobesuggestingasolutiontothestrawproblemthathehadcreated.Itisacomplexargumentbutworthfollowingup,becausethecurrentperniciousclaimthatMuslimsareleadingevermoreparallellivesintheUK,includingbecomingevermoresegregatedbywheretheylive,issodamaging.Thesesuggestionsofgrowingself-segregationandchoosingparallellivesarerepeatedlymadeandrestated.RobFordwentontoexplainthat:
Evenifsegregationwereaproblem(whichitgenerallyisnot),itisnotclearwhatwouldsatisfyKavanaghas
![Page 398: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/398.jpg)
asolution.MaybeMuslimscouldintegratebymovingawayfromareaswheretheyareconcentratedtowardsmorehomogeneouslywhiteareas,somethingUniversityofManchestercensusanalystshaveshownallethnicminoritygroupshavebeendoing?Thiswon’tdoforKavanagh,whoattacksitasMuslims‘colonizingthesuburbs’.LeavingasidetheabsurdlabellingofpeopleoftenbornandraisedinBritainas‘colonizers’,itisnotobviouswhatMuslimscaughtinKavanagh’sIslamophobiccatch-22aresupposedtodo.Iftheystayintheinnercityareastowhichtheirfamiliesfirstmigrated,theyareattackedassettingupsegregated‘IslamicRepublics’.Iftheysetoutforthesuburbs,theyareattackedas‘colonizers’lookingtoimposetheir
valuesonothers.37
ThereisagroupthathascolonizedhousinginBritain.Itistrue.Buttheyare(mostly)notimmigrants,andhardlyanyofthemareMuslim.
![Page 399: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/399.jpg)
Between2006and2009thechancesofpeopleagedoversixty-five,theaffluentelderly,inBritainbecomingafull(mortgagepaidoff)owner-occupierincreasedslightly,despitetheoverallproportionofhouseholdswithamortgageorbeingoutrightownersdecliningsinceatleast2002.38Butthereisasubgroupwithinthegroupofelderlyandmiddle-agedfamiliesthatdoesbetterthanthis:theveryrich,especiallythesuper-rich,whobuypropertiesthroughtheircompanies.Sometimesthesecompaniesare‘service’companies,setup(legally)forthepurposesoftaxavoidance.Housesarepurchasedbytheservicecompanyas‘assets’;andthecostsassociatedwithdoingthemupareoffsetas‘liabilities’.Theearningsof
![Page 400: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/400.jpg)
thericharepaidintothecompanytoo,andsooftenverylittleornoincometaxispaidbytheseveryrichindividualsasaresultoftheirpropertypurchase,inwhichtheymight,ormightnot,choosetoreside.Thesuper-richdowellwhether
theyareyoungorold.Theyoftenpaynocapitalgainstaxaslongastheyuseanoffshore-basedcompany;theypaynoinheritancetaxiftheyclaim‘non-dom’(not‘domiciled’)status;and,iftheysetuptheirowncompany,nostampduty,astheyarenotbuyingorsellingahomebuttransferringsharesinacompany(aslongastheycanfindawayofclaimingthatthepropertyisnotaresidentialhome).Suchatransferwouldnormallyattracta0.5%tax,butnotforthesuper-rich;theyknow
![Page 401: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/401.jpg)
whattheyaredoing.Manyuseanoffshoretrust,especiallyifbuyingpropertyworthover£2million,which,sinceMarch2012,shouldattract7%stampduty.Thecoalitiongovernmentsaysit
hasbeentryingtotackletheavoidanceofstampduty–butitsrateofprogresshasbeenextremelyslow.Forcertaincorporatebodiesthereareevenwaysaroundtheintroductionofanew15%top-endstampdutyrate.Thatrateshould,intheory,makeprimelocationincentralLondonalittlelessattractive,dampeningdownpricesandhelpingtoensureplacesfurtherafieldinthesouth-eastbecomeafractionmoreaffordable(assomeofthosedisplacedfromcentralLondonmovebackinwards).But,upuntilautumn
![Page 402: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/402.jpg)
2013atleast,thathasnothappened.Perhapsthisisbecausethecontinuationofmanyotherloopholeswill‘enabletheresidentsofatotalof£760millionworthofproperty[ayear]toavoidBritishcapitalgainsandinheritancetax’.39Therichgetricher,thoseinthemiddlepaymortgageinterest,andthepoorcanonlydreamofdoingso.Asaproportionoftheirincome,thepoorarenowpayingthemostforthehousingtheyget.Thepoorpaythemosttobe
housedbecausetheyrent.Theynevergettoownthehomestheylivein.Theyalsoincreasinglyfrequentlysuffertheindignityofbeingpaidsuchlowwagesthattheirrentispaidforthembythestate,implyingthattheycannotpaytheirway,whilethe
![Page 403: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/403.jpg)
factisthattheyaredenieddecentworkinawaytheirgrandparentswerenot.Inthe1950sthroughtotheendofthe1970stherewasfullemployment,averagewagesroseinrealtermsyearafteryear,andpeoplecouldpaytheirownrent.Rentswerealsomuchlowerthantoday,becausesomuchoftherentalsectorwasstateowned.Themiddleclasspaymorefor
theirhousingthantheirhousingisworth,muchmorethantheirparentsinabsoluteterms.Evenwheninterestratesarelow,morethanhalfofwhatispaidbackonatwenty-five-yearmortgagedoesn’tpayofftheloan;itpaysaprofittothelender.Themiddleclassoftenhopeonedaytoowntheirpropertyoutright.Manyofthemdo,butnotall.However,
![Page 404: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/404.jpg)
becausehousingfinancehasbecomesoskew-whiff,itisincreasinglylikelythattheirgrown-upchildrenwillcometoviewpartoftheequityinthosehomesasthedown-paymentonanevenlargermortgageinfuture.Allthetimetheaggregatehousingdebtoftheaveragemiddle-classfamilyrisesandrises.Someonehastowinfromallof
this,anditisthoseattheverytop.Theydonotsimplyreceivethebulkofmortgageinterestpayments,profitsfrombuildingfirmsandrentsfromtenants;theyalsooftenliverentandmortgagefree,iftheyputtheirpropertiesinthehandsoftheirprivatecompanyortrust.Youmightsaythattheyhaveinsomewayworkedtoearnthemoneyfortheirhomes,butthereareonlytwenty-
![Page 405: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/405.jpg)
fourhoursinaday.Howinthattimecansomeonedoenoughusefulworktoearnthemillionsneededtobuythemostexpensivehomesintheland?Inonewaytheextremelyrich
haveworkedhard:theyhaveworkedhardtoachievepolarizationinhousing.Theyofteninfluencepoliticsandcontrolnewspapers,inducingthelattertopeddlethelinethatindividualismtriumphs.Theypractisewhattheypreach,buyingandbuildingtheirnewhomesinwaysthatallowthemtoavoidtax.ForexampleLordRothermere,owneroftheDailyMail,wasapparentlynotcontenttolivejustinhisEatonSquarehomeinLondon’smostexpensivequarter,aplacewheregrandtownhouseshadbeen
![Page 406: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/406.jpg)
builttoaccommodatemanyservantsinthepast.In2004anotherhome,thistimeaneo-Palladianhouse,hadtobebuiltforhiminalocationdescribedas‘deepintheDorsetcountryside’.ThepropertywascalledFerneHouseandwassaidtobeworth£40million.Itwasconstructedwithinthe220acresofitsownprivategrounds,buteventhatwasn’tgoodenoughforLordRothermere.In2006hehadneweastandwestwingsaddedtothehouse.Didhepayforthesehimself?No,apparentlythe‘moneycameintheformofbankloansforwhichRothermerepledgedeightmillionofhisDMGT[DailyMailandGeneralTrust]shares,wortharound£50million.Excepttheyweren’tlegallyhisshares.Theybelongedtothe
![Page 407: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/407.jpg)
BermudancompanythroughwhichRothermerefamilytrustscontroltheMailempire.’40Inthisway,theextremelyrichbuildandbuymansionstax-freeinDorsetorKensington,whilethenewlyimpoverishedareexpelledtoStoke,LiverpoolorNewcastle;orcrowdedintoNewham,BarkingorDagenhamintransit.Recentlyitwasclaimedbythe
coalitiongovernmentthatChancellorGeorgeOsbornehadtriedtoclosesomeofthesecomplexpropertytaxloopholes,but,again,theattempttodosowasatbesthalf-hearted.Apropertydeveloperwassecretlyfilmedgivingadviceoverhowtoavoidtax,havingalreadyhelpedotherbuyersengineertheirwayfinanciallyaroundtheChancellor’s
![Page 408: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/408.jpg)
newprovisions.Osborne’sincreaseinstampduty‘onlyaffectsnewpurchasesofhigh-valuehomesbycompanies,thosehousesalreadyownedinsuchaway[throughanoffshorecompany]–likethoseatCornwallTerrace[borderingLondon’sRegent’sPark]–arenotsubjecttothepunitivestampdutyrate’.41Thepurchaserbuystheservicecompanycreatedwiththeexpresspurposeofowningthatproperty,andasaresulttheregisteredownerofthepropertydoesnotchange:heypresto,nopropertysalehastakenplace,nostampduty.ThehousesinCornwallTerracelook,aboveground,alittleliketheoneshowninthepicturebelow.Justasthefinancesarewellhidden,sothereisnowayofknowingwhatso
![Page 409: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/409.jpg)
muchpropertyofthiskindnowlookslikebelowground.Theextremelyrichhavefounda
newwaytohidetheirwealthandtoremaininconspicuousintheirconsumptionofit:throughtheircreationofthevast,subterraneandevelopmentscurrentlybeingbuiltundermanysquaremilesofLondon’sprimerealestate.Ownapropertyoutrightandyouownthelandunderneathit.So,ifmoneyisnoobject,butgoingsidewaysorupwardsisnotpossible,digdown.Alltheeffortthatgoesinto
makingneo-Georgianpropertylookasshinyasthedayitwasfirstbuilt,allthecarvingoutofsubterraneanplayrooms,poolsandservants’quarters,42couldbeeffortspentrenovatingandrepairingthehomes
![Page 410: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/410.jpg)
thatthousandsofother,poorer,averagepeoplelivein.Thereareonlysomanybuilders,plasterers,painters,carpentersandjoiners.IfmoreareworkingdiggingundergroundinKensingtonoraroundRegent’sPark,therewillbefewertoundertakerenovationabovegroundinNewhamorNewcastle.Youmaysaythatthereareonlyso
manymansions,butin2011,2012and2013itwaseasytospendfarmorethanadaywalkingaroundLondon’smostopulentstreetswatchingbuildersatwork,astheinsidesofgrandtownhouseswereguttedandtheinnardssentthroughaseriesofchutesdownintoskipsonthestreet–skipsthatarequicklywhiskedawaytolandfilltokeeptheneighbourhoodlookingitsbest.New
![Page 411: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/411.jpg)
interiorwallsarefitted,newstaircasesputin,acompleteredecorationundertakentoallowallthelatestfashionsofhomedécortobeaccommodated.Andallthatisbeforeyoudigdown,andbeforethenextpurchasermovesinandwantsitallchangedaroundagain.Perhapseverybedroomneedsawalk-inwardrobeaswellasanensuite.Loseastudyhereandabilliardroomthereanditcanallberejigged.Theoptionsareasendlessasthedepthofyourwallet.Thehousingcrisisisacrisisof
polarization:itillustratesinsharpreliefwhatoccurswhentherichgetricherandthepoorpoorer.43Almosteveryoneisunhappywithsomeaspectoftheirpositionalongthisspectrum:withhoweasythoseabove
![Page 412: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/412.jpg)
themhaveit,andhoweasilytheythemselvescouldslipdowntoliveinwhat,forthem,isthesqualorofpeoplehousedinslightlyworsecircumstancesthanthemselves:‘Icouldn’tlivelikethat’,theymightsay.
Figure7.ThemodernLondonKensingtonmansion,anartist’simpression,2012.
![Page 413: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/413.jpg)
ItisasthecrisisdeepensandtheriseinthepriceofprimepropertyacceleratesinLondon,whileoveraquarterofthehighstreetisclosedinBlackburn,44thattheissueofsegregationbeginstoraiseitsuglyheadagain.Thisisnotthesupposedchosensegregationofonegroupwishingtoliveawayfromanother;itistheenforcedsegregationthatoccurswhenpeoplewhohavebeenabandonedhavetomovetoplacesthat,increasingly,havealsobeenabandoned.Whenthisoccursitisnotjustrichandpoorwhobecomeevermoreseparated.Peoplecanthenbecomemoredividedbyraceandreligion–especiallyifthoselabelledasbeingofaparticularraceorreligionhappentobemuchbetteroff,orpoorer,thanthenorm.
![Page 414: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/414.jpg)
Thefurtherawayyoumovefromasysteminwhichalargeproportionofhousingisallocatedbyneed(bygovernmentandhousingassociations),themoreyoureducepeople’schoices.Youwillgetrisingsocialsegregation,areastratificationalongclasslinesifpeoplecanbehousedonlywheretheycanpayhigh‘affordablerents’oratthewhimofprivatelandlordsiftheycanjustaboutpaytheirevenhigherrents.Fullyprivatizethehousingsystemandpolarizationbywealthhasthescopetogrowandthenmutateintosegregationbyrace.Peoplemixmorewithinand
betweenareasinthosecountrieswherethereislessdifferentiationinthecostofhousingbetweenareas.However,therelationshipbetween
![Page 415: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/415.jpg)
pricesandsegregationisnotsimple.WhenpricesinLondonfirstrose,theeffectmayhavebeentoreduceracialsegregationinthatcity.Peopleincreasinglyhadtolivewheretheycouldaffordtolive.Theycouldnotbethatchoosyoverwhomtheirneighbourswere.Butoncethestockofpubliclyownedhousingbegantodryupthesituationchanged.PrivatelandlordsinalmostanypartofLondonandthesouth-eastwerenolongerinterestedinpeoplewhocouldnotmatchmarketrents,resultinginlessspaceforpoorernon-whitegroups–lessspacenotjustinbutalsonearexpensiveareasofthecapital.Byautumn2013theBBCrevealedthatlettingagenciesinLondonroutinelytoldpotentialtenantsthatpropertywasnolonger
![Page 416: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/416.jpg)
availabletorentifthetenantswereAfrican-Caribbean.45Thatishowsegregationcomestoincrease.
HOUSINGANDRACE
Britishsocietyappearstobegoingbackwards.Politicsandtheprofessionsaredominatedbyan‘OldBoys’Network’…andeventhoughthereisamorediversepopulationthaneverbefore,Britainisstill‘organizedandshaped’byrace.
–DoreenLawrence,motherofStephen
Lawrence,201346
In2010theUKgovernmentintroducedmeasuresthatitsaidwereaimedtosave£1billionbyspring2015.Thesavingwouldcomefromreducingthecostofprovidinghousingbenefitpayments,withpoorerLondonersasawholethoughttobethemostseriouslyaffected.
![Page 417: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/417.jpg)
However,in2011,analysiscarriedoutonbehalfoftheRaceEqualityFoundationrevealedthatthe‘reductionandcappingofLocalHousingAllowancewillimpactdisproportionatelyonblackandminorityethniccommunitiesasmanyliveinareastargetedbythecutsandwilloftenneedlargeraccommodationduetofamilysize’.47
Justasourhistorichousingstockreflectsourclassstructureandourpastpoliticaldecisions,socurrentchangesinhousingalwaysreflecttheparticularprejudicesofmanyinpowerthroughtheimpacttheyhaveondifferentethnicandreligiousminorities.Theimpactisoftenobviousinretrospect.Take,forexample,therookeriesadaptedfor
![Page 418: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/418.jpg)
thepoorestofIrishandruralimmigrantstoLondoninthenineteenthcentury.Housingreformaidedthosegroupsinparticular;lackofreformleftthemmoredestitute.Similarly,thelackofactiontodaytoimprovethehousingsituationimpactsonsomegroupsmorethanonothers.AsRaquelRolnik,theUNSpecial
RapporteuronHousing,putit,recentcutsinhousingbenefitneededtobescrappedbecausetheywereashockingbreachofhumanrights,harming‘themostvulnerable,themostfragile,thepeopleonthefringesofcopingwitheverydaylife’.Thegovernmentchosetoignoreher,withformerHousingMinisterGrantsShappsaskingwhyweshouldlistentotheviewsofsomeonefrom
![Page 419: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/419.jpg)
Brazil.48Atleasthedidn’talsopointoutthatshewasfemaleassomeotherreasonforignoringher.ButitissurprisingthathethinkstheUKissowelloff,givenhowmanypeoplearestrugglingtosurvive.IntheUK,tenantswhoaresopoor
thattheycannotaffordtopaytheirrenthaveupto100%oftherentpaidtotheirlandlordbythestatethroughhousingbenefits.Itisimportanttostressthatthetenantneverseesanyoftheserentsubsidies,which–outsideofthemostexpensivepartofthecountry–areoftenatfullmarketrates.Thesubsidiesarepaiddirectlytothelandlordbythestate.Sooninsomeareastheywillnotbe.Itwillbepaidtothetenants,whowillthenhavetohanditovertolandlords.Themoneyisstillasumoverwhichthe
![Page 420: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/420.jpg)
householditselfhasnocontrol.Thisisimportantbecausethemediaandthegovernmentoftentacitlyencouragethemisapprehensionthattenantsarepocketingtheserents,whileitisthelandlordswhodothepocketing.Itisalsoimportanttounderstandthatsince2010,forthefirsttimeindecades,formanyfamilieseventhesebenefitsarenowbeingcut,thoughnotallfamiliesareequallyaffected.Whenthecoalitiongovernment
introduceditscomplexcaponhousingbenefitin2013,49despiteethnicminoritiesmakinguplessthanafifthofhousingbenefitrecipients,roughlyathirdofallhouseholdsaffectedbythebenefitcapcontainedatleastonepersonfromanethnicminoritybackground.Thesuperficial
![Page 421: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/421.jpg)
reasonforthiswasbecauseoftheconcentrationofpeopleofminoritybackgroundsinLondonandbecauserentsarehigherinLondon.Thedeeperreasonwasthelackofanyconcentrationofpeopleinsuchcircumstancesamongcoalitionmembersofparliament,oramongthemajorityoftheirconstituents.But,despitetheirignorance,theincreaseinthenumberofevictionsamongpeoplewhoareblackandAsianwasneitherunforeseennorunforewarned.Onceintroduced,itwascriticizedatthehighestinternationallevel,astheUNSpecialRapporteur’sinterventionmadeclear.Itwasobviouswhenthehousing
benefitchangeswerefirstmootedthattheywouldhurtsomeethnic
![Page 422: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/422.jpg)
groupsmorethanothers.EvenLondonMayorBorisJohnsonrealizedtheimplicationofwhattheUKgovernmentwasplanningandpromisedthat‘Kosovo-stylesocialcleansing’inLondon…wouldnothappen‘onmywatch.’50TwoyearslateralandlordexplainedwhatwashappeningonBoris’swatchasaresultofevictions:‘Thesocialcostisimmeasurable.Livesarebeingwrecked…Idon’tlikeethniccleansing,andthatiswhatishappening.’HedescribedthetenantshewasintheprocessofevictinginLondonas‘exclusivelynon-white’.51
Despitehispledge,andinthefaceofmoreandmoreevidencesuchasthis,BorisJohnsondidnothing.52
Thereweremanyinstancesofappallingtreatmentofthepooronce
![Page 423: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/423.jpg)
thebenefitchangeshadbegun.Amotheroffouryoungchildrenwastoldinspring2013thatsheandherchildrenwouldbeevictedfromtheLondonboroughofCamdenandmovedtoLiverpoolbecauseshewastoopoortopaytherentandthestatewouldnolongerpayonbehalfofherandherchildren.Sheexplained:‘IwanttostaywhereIamformychildren’seducation.WhatitseemslikeisthegovernmentjustwantsLondonfortherich.Theywanttomovepeopleonbenefitstopoorareas.’53TheLondonboroughofCamdenalone,justinthemonthofJanuary2013,wasplanningtoevictafurther760–mostlynon-white–familieswithchildren.The‘ethniccleansing’effectisperhapsunsurprising,giventhatthemajority
![Page 424: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/424.jpg)
offamiliesonlowincomesinpoorerpartsofinnerLondonarenotwhite.Allthiswasforeseenbyhousing
officials,whoknewthatmanypoorerpeoplewouldnolongerbeabletopaytherentonahomethatwasbigenoughforalltheirchildren.Earlier,in2012,anunnamedcabinetmemberforhousinginoneinnercityboroughwasreportedtohavesaid:‘Let’sfaceit,alotofpeoplewithmorethantwoorthreechildren,andwhoaredependentonbenefitsinthisborough,arenotgoingtobehereforverymuchlonger.’54Theofficialswerecorrect,althoughoftentheolderchildrenofrelocatedfamiliesareleftinLondontotrytoreducethelong-termimpactonthemoftheirfamily’seviction.Theystaywithfriends’familiessotheycancarryon
![Page 425: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/425.jpg)
atschoolinaneighbourhoodtheyknow,buttheynolongerseetheirparentsveryoften.Thehousingbenefitcapisnota
particularlynewschemewhenitcomestoattemptstomovepoorerpeopleawayfromricherareas.AgenerationagotheConservativePartytriedtoachievethesameoutcome,butmoresubtly.In1986theConservative-controlledWestminsterCouncildecidedthatthenumberofcouncilhousesalesshouldbeacceleratedsothat‘anaturalandpermanentConservativemajoritycouldbemanufacturedinWestminster’.55Some10,000councilhomeswereearmarkedtobesoldprivatelywhenthetenantsinthemeithermovedonordied.Inotherwords,thosetenantswerenot
![Page 426: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/426.jpg)
tobereplacedwithpeoplefromasimilardemographic;Westminsterwastobegentrifiedandthepoliticalbalanceshiftedbysellinghomesthatwerelocatedmainlyineightmarginalwards.Eventually,thepolicywasfoundtobeillegal,butnotuntilJanuary1994,longafterithadhaditsdesiredeffects.56
AWestminsterCouncil-styleclearingofthepoor,andespeciallypoorblackparentsandchildren,isnowunderwayagain,butacrossmostofLondon,notjustinthatonethenfamouslycorruptToryborough;andpeoplearebeingmovednotjusttootherpartsofLondon,buttoelsewhereinthecountry.Thewayinwhichpeopleofdifferentethnicitiesaredifferentlyaffectedmaybeanunintendedconsequence,ratherthan
![Page 427: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/427.jpg)
somethingdeliberatelyconsidered,butthatdoesassumesomedegreeofincompetenceamongthoseinpowerwhofailedtograsptheimpactoftheiractions.Anotheraspectofthehousing
benefitcapthatwillhurtsomefamiliesmorethanothers,especiallytheverypoorestoflargerfamilies,istheoverallmaximumlimitthatwillbeappliedregardlessofneed,evenafterdeductionstobenefitshavebeenmade.Thiswillmeanthatifafamily’scostspushthemoveraprescribedlimit–forinstancebecauseachildisdisabledortheygetacarer’sallowanceforanelderlyfamilymember–theirrentmayceasetobecoveredandtheymayhavetoleavetheirhome.However,allthesenewregulationsarevery
![Page 428: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/428.jpg)
complex,andsowillcreateconfusionaswellasdistress.Forinstance,anelderlyfamilymember’sattendanceallowancemightnotbeincludedbecauseotheradultsagedovereighteencanbetreatedasaseparatebenefituniteveniflivinginthesamehousehold,althoughthatmightapplyonlyiftheykeeptheirfoodinseparatecupboards.Itisalmostimpossibletoworkoutuntilyouaretoldwhathappenstoyou.Noneofthisnewred-tapewastheproductofaleft-wing-createdbureaucracy.ThecurrenthousingbenefitsystemwassetupbytheConservativesinthe1980s:theywantedrentstobeabletorisefreelytoencourageprivatelandlords.ManyLondonersarenowtoo
youngtoknowthatinthe1980sit
![Page 429: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/429.jpg)
wasDameShirleyPorter,thedaughterofthemanwhomadeTescoBritain’smostprofitablesupermarket,whowasconvictedoftryingtoclearawaythepoorfromWestminster.Shewantedtowinahighershareofvotesforherpartyinmarginalseatsinlocalelections.In2009sheclaimedtohavewrittenabooktorefuteallthisbutsaidshehaddecidednottopublishit.57
However,thekeydifferencefromtodaywasthatshewasmostlyonlyforcingfamiliesouttootherpartsofLondon,nottootherpartsofthecountry.NottoareasasfarawayasNewcastle,Plymouth,orLiverpool.Todayifthereisanygerrymanderinggoingon,itistoensurethatmuchofLondonissogentrifiedthatthecapitalasawholeneverreturnsa
![Page 430: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/430.jpg)
Labourmayoragain.Butwhowillstafftheshops,fixthedrainsandteachthechildren?Londonbecomesaworseplacetoliveoverallasaresult.ItisnotjusttoLiverpool,butalso
tootherfar-awaycities,thatevictedLondonersnowhavetogo.Oppositionpoliticiansarefinallybeginningtotakenote,verylateintheday.Thus,attheendof2012,itbecamecleartothemainoppositionpartythat‘Thecountryisgrippedbytheworsthousingcrisisinagenerationandthegovernment’sfailedpoliciesaremakingitworsenotbetter…hard-pressedLondoncouncilsarefacedwithhavingtohousethosefacinghomelessnessfromCornwalltoNewcastle.Toloseyourhomeisatragedy.Tofacethen
![Page 431: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/431.jpg)
beinguprootedfromfriends,familyandworkisabsolutelywrong.’58
However,ittooktheLabourPartyalmostanotheryearforthemtosaythattheywouldrepealthehated‘underoccupancy’penaltywheninoffice,andthatwasonlyaftertheScottishNationalistPartycouncilsbannedBedroomTaxevictionsinMarch2013.
![Page 432: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/432.jpg)
![Page 433: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/433.jpg)
ABritishflaghangsfromabalconyatLansdowneflatsinSharrow,Sheffield.Whenyouseeaflaghanginglikethistodayitmakesyouwonderwhyitisthere.Itmaynotbearacistornationaliststatement.Itis,afterall,notan
Englandflag,butthenitcan’tbeaboutfootball,canit,andtheOlympicsweretheyearbeforethisimagewastaken,sowhatisthatflagdoingthere?Maybeitwasputupasanironicgestureorasasignofsolidaritybyafamilyfromaminoritygroup,orbyanenthusiasticchild.OrmaybeitwasputupfortheOlympicsandnevertakendown.But,setbetweenthesatellitedishes,youbegintowonderwhetheryoukindofknowwhatitsays,andthenyouworryaboutwhatthatsaysaboutyou.ThenyoumightwonderhowafamilyfromapoorerpartofLondonmightfeel,turningupforthefirsttimeoutsidetheseflatsinacitytheyhaveneverbeentobefore,beinghousednextdoortotheflatwiththeflag.EvenifthatfamilyfromLondoniswhite,theymightstillbeworried.Ifthenorthbecomesaplacetostow
extraditedpeoplefromthesouth,theimageofthenorthwillbeharmedalongwiththelivesofthose
whohavebeenforciblymoved.
Whatistakingplacetodaythroughthecoalition’shousing
![Page 434: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/434.jpg)
policiesisnowwidelyrecognizedaspromptinganewkindofsocialsegregationintheUK,oneoccurringthroughgovernmentaction.ItisakintoactionsmostclearlyseenintheUS,wheredifferentpartsofmanycitiesarenowhometopeopleofverydifferentethnicorigins.59Theretheprivatemarketplaysabiggerroleinmovingpeopleapartfromeachother,inmaintainingsegregation.ThatcouldnowhappeninBritain,aswebegintomimicevermorecloselyUSlaissez-fairesocialpolicy.SoweneedtolookacrosstheAtlantictolearnfromthere.In2012intheUSitwasfound
thatAfrican-AmericanslivingintheDetroitareawereupto70%morelikelytoendupbeingawardedasubprimeloanthanwerewhite
![Page 435: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/435.jpg)
borrowerswhohadapproachedamortgagebrokerinanalmostidenticalfinancialsituation.ThiswasrevealedthroughananalysiscontainedinthelawsuitbeingpresentedinaclassactionagainstthefinancecompanyNewCenturyloans.Thelawsuitwastorecoupdamagesfortheeffectofloansthatcompanyhadgivenout,high-costloansthatwentfarmoreoftentoAfrican-Americansthantowhitesbetween2004and2006.60Sothekeyquestionforthelawyerswaswhetherthecompanyhadtargetedblackfamiliesmorethanwhitefamilieswhenbothhadsimilarfinancialcharacteristics.Sohowdidthecaseproceed?It
wasfoundthatthe‘similarfinancialcharacteristics’mentionedbythe
![Page 436: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/436.jpg)
analysisweretobefoundinfarfewerwhiteborrowersinDetroitthanblack;andthatthewhitegroupwasfarlesslikelytobetargetedforsubprimelending.Perhapsthemortgagebrokerthoughtthatblackborrowerswereaninherentlyriskieroption,althoughsuchalineofthinkingbreaksAmericananti-discriminationlawsandsubjectsblackborrowerstomuchhigherthanaverageinterestratesbecauseofthisprejudice.Inasimilarway,itcouldbeargued,whiteLondonersarefarlesslikelytohavebeentargetedforacutintheirhousingbenefits.MorewhiteLondonersonbenefitsareolder;andpensionersescapethecutsoutright.61InLondonfewerwhitefamilieshavechildren,sowillhavelowerbenefitsbillstobecut.Many
![Page 437: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/437.jpg)
moreofLondon’schildrenarenon-whiteincomparisonwithLondon’sadults.62
Whenpoliciesaffectdifferentethnicgroupsdifferently,theycanexacerbatetheinequalitiesbetweendifferentgroupsofchildren.Whenlawsenshrinediscriminationbetweenparents,differentgroups’lifechancesaresystematicallyaltered.Forexample,intheUS,subprimeloansweresupposedtobegivenouttopeoplewhowouldnotnormallyqualifyforaloan.Oftentheybeganwithalowrateofinterest,buteventuallyrosewellabovetheaveragerateandbecamemoreandmoreunaffordable.Therehavebeenmanyrepercussions,withfamiliesthattookoutsubprimeloanssubsequentlybeingfarmorelikelyto
![Page 438: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/438.jpg)
seethemselvesandtheirchildrenmadehomeless.Alawyermightsaythatsubprime
loanstobuy(andinsomecasesbuild)housingwereintentionallydesignedtobecomeunaffordableif–asfrequentlyhappened–themortgagorcouldnotre-mortgagebeforetheinterestratestartedtoclimbskywards.Mortgagorswerenotabletore-mortgagewhenthemarketcrashedin2008.ProportionatelymanymoreAfrican-Americanthanwhitemortgagorshadtomoveintotrailerparksorbacktoolderghettosasaresult.Thisiswhythatclassactionlawsuitreferredtoabovebecamepossible:becausesomanypeoplefromoneethnicgroupwerehurtbycomparisonwithothers.Thesamerecoursetosimilar
![Page 439: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/439.jpg)
legislationisnotimpossibleintheUK.IntheUS,thememoryofslavery,
ofhavingnorighttoholdanywealth,liesnotfarbeneaththesurfaceofthecollectiveconsciousness.IntheUK,whenallthesehousingstoriesaremorefullyrevealed,whenpeopleinfuturetellofhowtheirfamiliesweresplitupbecauseofthecutsof2012–15,attitudestorace,toclassandservitude,andtolackofaccesstohousinginthepast,willberemembered.Oldermemoriesofbeinghoused
badlyoftenconcernhavingtoworkinservice,beingaservant.AcenturyagoinBritainalmostallservantscamefromthecountrysideandwerewhite.Itwasthemostcommon
![Page 440: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/440.jpg)
occupationforwomenin1911.63InLondonacenturylater,thenewservantsarenowmostlynon-whiteandcomefromfurtheraway.OftenthewomanpushingthepraminKnightsbridgecanbeidentifiedasthenanny,andnotasthemotherofthechildinthepram,bythecolourofherskin(althoughmoreandmorearenowfromEasternEurope).Servantsweredefinedbyhousing.Theywereemployedtoservethehousehold,didnotusuallyhaveahomeoftheirownandcouldnothavechildren.Workingasaservantstillcausesconcern;peoplewanttohavetheirownhome.IntheformercapitaloftheBritish
Empirerace,likethehistoryofworkinginservice,isalsoanespeciallysensitiveissue.This
![Page 441: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/441.jpg)
sensitivitywasstokedupbyBorisJohnson,whousedthepejorativeterm‘piccaninnies’atonepointwhenhewastryingtoingratiatehimselfwiththoseLondonvotersmostlikelytoswingtowardshimastheirfuturechoice.ThesemighthavebeenvoterswhosawLabourinLondonasfavouringpoorerLondoners,Londonerswhoareoftenblack.64Richerpeople,peoplewhotendtovoteConservative,canpayalotofmoneyfortheirhomes.Mostofthemoneythattherichinvestintheirhousingisnotforthebricksandmortarbutforthelocation,andthevalueofthelocationincreasesthefurtherawayitisfromthepoor,orblackpeople,oryoungpeople,andespeciallyfrompooryoungblackpeople,fromthoseBorismighthave
![Page 442: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/442.jpg)
beenthinkingofas‘piccaninnies’whenheusedthatword.Howyoutalkaboutpeopleand
housing,howyoubuildhomes,whereyoubuildhomes,andwhetheryoubuildhomes–allofthisdependsonthetypeofsocietyyouwantandhowyoubelievethatsocietyshouldbearranged.Whatyouthinkisfairwhenitcomestofinancinghousingdependsonwhatyoumoregenerallybelievetobefair.Forinstance,ifrentcontrolswerereintroduced,greaterincomeandwealthequalitywouldresult.Landlordscouldnotbecomesorich,tenantswouldgettokeepmoreoftheirincomes,thestatewouldnotlosesomuchhousingbenefitmoneytothoselandlords,andfarfewerethnicminorityfamiliesinLondonwouldface
![Page 443: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/443.jpg)
eviction.Youmightsaythatrentcontrolswouldresultinfewerhomesbeingbuilt,but,asitstands,atatimeofconsiderablederegulationoftherentalmarket,veryfewarebeingbuilttodayanyway.Anenhancedhome-building
programmewillbeneededifthedemographicsoftheUKcontinuealongthepatternsofrecentyears–ifmorepeoplecomeinfromabroadtoreplacethechildrenwhohavenotbeenbornsincefertilityslumpedbelowtwochildrenpercoupleinthe1970s.65Butsuchhighratesofimmigrationcontinueforlongperiodsonlyincountriesthatcontinuetobeworthcomingto,oratleastmoreworthcomingtothanthenearbyalternatives.Evenifmanymorehomesneedtobebuilt,for
![Page 444: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/444.jpg)
eachthatisbuiltweshouldatleasttrytofindonemorethroughbetteruseofwhatwealreadyhave.Convertonelargeoldhomeintotwoflatsforolderpeopleandyouleavefreethesecondlargehomethosetwoolderpeoplemayhaveoccupiedseparately.Thereisafiniteamountofspacetobuildin,andfinitefinancialandenvironmentalresourcestousetobuild,heatandalsomaintainournationalhousingstock.Whetheranyfuturebuilding
programmeshouldbeleftentirelytotheprivatemarket,modifiedtomakeitmoregreenorputlargelyinthehandsofthestate–thesearepoliticaldecisionsthatmustbetakenbythestate.Andbecausethestateboughtsomuchofourhousinginthe
![Page 445: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/445.jpg)
past,commissioningprivatebuilderstobuildit,manycallforanewcouncilhouse-buildingprogrammetoday.Butbackthenwedidnothavethesparecapacitywithinthehousingstockthatwehavenow.Howmanyhomeswillbeneededinfutureandhencehowmanywillbebuiltdependsmostlyonhowwellorbadlyweusewhatwealreadyhave.Asecondconsiderationforour
overallhousingneedishowmanymorepeoplecomeintothecountry,orhowmanyleaveit,ifthefutureisworse.Therewasnetemigrationaftertherecessionsoftheearly1970s,1980sand1990s.Athirdconsideration,andperhaps
themostimportantofall,ishowwemightbetterpayforthehousingwealreadyhave,itsupkeepand
![Page 446: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/446.jpg)
maintenance,andpayforanynewhomesthatwereallydoneed.Shouldwereallyallowafewtoprofitsomuchfromhousinginthefuture?
![Page 447: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/447.jpg)
![Page 448: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/448.jpg)
5
Buying
We’recondemningawholegenerationtopayingabsurdpricesforwhatisabasichumanneed–anditdoesn’thavetobethisway.
–FaisalIslam,authorofTheDefault
Line,20131
Forahometobebuiltandmaintainedsomeonehastopayforit.Mostpeoplebuyhousingbythemonth:bypayingrentoramortgageinstalment.Thosewhohaveaninterest-onlymortgageareineffectrenting(witharighttobuy),butwithsomesecurityoftenure.Similarly,
![Page 449: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/449.jpg)
peoplewhorentcouncil-ownedpropertyalsohavearighttobuyoutrightonthepropertyinwhichtheylive,andcannotbeevictedonawhim.Thereusedtobeacleardividinglinebetweenrentingandowning.Now,inonewayoranother,wearealmostallbuyingourmonthlyrighttohousing,butsomeofusendupricherasaresultofhowwepayforit,orhowtheymakeuspayforit.Mostofus,though,enduppoorer.Toseewhereweareheading,itis
worthstartingwiththosewhoarebuyingtheirrighttobehousedfromsociallandlords–fromcouncilsorfromhousingassociations.Examinethechangingfortunesofthisgroup,andyouquicklybegintoseehowfewerandfewerpeoplewillhavetheoptiontobuyinfutureandhowmore
![Page 450: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/450.jpg)
willbeforcedintotheprivaterentalsector.Landlordsareskimmingoffmoreandmoremoneyforthemselvesandthewaitinglistsandrentsgrowastheydothis.Attheheartofthecurrent
problemsthatthepooresthaveinbuyinghousingaretheimplicationsoftheBedroomTax.InSeptember2013theUNSpecialRapporteuronHousingsaidthatthistaxcompromisedtenants’humanrights.Onegroupthatclaimstobeverymuchinfavourofhumanrights–thecoalitionjuniorpartners,theLiberalDemocrats–cametodeclarethattheyhadnotunderstoodwhattheyweredoingwhentheyhelpedtheirConservativealliestointroducethatBedroomTax–or‘charge’,‘penalty’
![Page 451: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/451.jpg)
orevenexcess‘subsidy’,tousetheirterms.NotallLiberalDemocratsclaimed
thattheydidnotunderstandwhattheConservativesweredoing.OneMP,SarahTeather,saidshecouldnotstandagainasaLiberalDemocratMPbecauseherpartyhadbecomesocallous.Hopefullyshewasbeginningtoseethatagreatproblemarisesinthehousingmarketifasmallgroupgetsitselfintoapositioninwhichitisabletomakegreatprofitsfromthemajorityofhouse-buyers.Thegreatestprofits,sufficetosay,aremadebylendingmonies–atconsiderableinterest–toothersforhouse-buying.Themorehousingpricesrise,andthelongerthetermsforpayingbackthemortgage,thegreateristheprofittobemadeand
![Page 452: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/452.jpg)
themoreexpensivehousingbecomes.Thepricesrisenotbecausethecostofbuildingorofmaintaininghomeshassuddenlybecomegreater,butbecauseafewhavefoundbetterwaystomorefullyfeatherthenestsofthosewithmoneytolend:the‘investors’.Oftenlandlordsborrowmonies
fromseparateinvestorstobuypropertytorent.Theythenmustnotonlypassontheinterestcostsbutalsomakeaprofitontopofthat;and,inasocietythathasbeengrowingincreasinglyunequalandacquisitive,whenlandlordsseepeopledoingbetterthantheyareandmakingevenmoremoney,theincentivetochargemoreforrentincreasestoo.Asmallgroupbecomingveryrichatthetopof
![Page 453: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/453.jpg)
societyresultsinmanyothernotsosmallgroupsalsotryingtotakemoretojustaboutmanagetohangontothecoat-tailsofthoseabovethem.Rentsrise,pricesrise,andsoonanykindofpropertyisbeyondmostpeople’sgraspinmanyplaces.InBritain,thegovernmentreacts
toallofthisbytryingtocreateshelteredaffordablehousing–ineffectadmittingthatmosthousingisunaffordable.But,evenasitdoesthis,loomingovertheentirehousinglandscapeisthespectreofLondon:anoverheatedmarketinwhichhousingpricesappeartobespirallingoutofcontrol,onethathasthemakingsofaperfectstorm.
HOMEOWNERSHIP
![Page 454: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/454.jpg)
ThePerfectStormisasetofinterlockingcrises,and,whileparticularproblemshaveparticularsolutions,thereisaneedforjoined-upthinking,forexamplearoundhowrethinkingstatesupportforhousingcanhelptofreeupmoneytomaintainsocialprotectionforall.
–Oxfam,20122
Withinthenextsixteenyearsafurther1.5millionpeopleintheUKagedthirtyandunderwillbeforcedtorentprivatelyfromlandlordsbecauseofalackofplannedextraprovisioninsocialhousing.Ariseinthoseexperiencingdifficultyinaccessingmortgagesisalsoforecast.Thisisevenifmorehomesarebuiltforbuddingowner-occupiers,andevenifmoremortgagesbecomeavailabletohelpthemdothis.Suchdevelopmentsmightbeseenbyboth
![Page 455: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/455.jpg)
potentialandexistingprivatelandlordsasgoodnews.TheestimatesofhowmanymorewouldsoonbeforcedtorentwerecalculatedbytheJosephRowntreeFoundationinareportreleasedduringthesummerof2012.TheRowntreereport’sauthors
proposedwaystoavertwhattheydescribedasaworseningcrisis.Whattheywantedwasasustainedprogrammeofhome-building.Theyalsosuggestedthatmore‘stableprivaterentedtenanciesmightbeachievedthroughsmarterincentivesforlandlords’.3However,insayingthis,theysignalledthattherehasbeenasea-changeinpolicyadvocacy.Wehavenowenteredanewworld,onewheretheaimhasbecometotrytoincentivizeprivate
![Page 456: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/456.jpg)
landlordstobehavewell,ratherthanrequiringthemtodoso.TheRowntreereportproposedtaxbreaksforprivatelandlordstoencouragethemtoprovidelonger-termtenanciesortohousevulnerable,disabledorpoorertenants.Thismightincludethoseschemeswherecouncilsrentfromprivateownersandinturnrentoutthepropertiestofamiliesinneedonthewaitinglist.Significantly,areturntohousing
thatisprovidedbyhousingassociationsandbuiltbylocalcouncils,insteadoftheprivatesector,isnolongerenvisagedasevenaremotepossibilitybymanyhousing‘progressives’.Peopleforgetthatcouncilswereonceallowedtousetheirmoniestobuildhousing,moniesthatwerethenrepaidmany
![Page 457: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/457.jpg)
timesoverinrentandreinvestedinmorehousing.Theyforgetthattheprivatesectoruseshousingtomakemoneyforitself,nottomakesurethateveryoneissecurelyhousedinBritain.Onegenerationmaybesafelyhoused,buttheirchildrenwillnotbesafelyhousedoncetheprivatesectorhasbecomedominant.JustastheBBCexists‘tomake
goodprogrammespopular,andpopularprogrammesgood’,sothestateandlocalgovernmentcouldmakegoodhousingmorewidelyavailable,collectively,onourbehalf.Thestatedoesnotneedtobuildhousingforittohavebettercontrol,justastheBBCdoesnotneedtomakemanyofitsownprogrammes;buttheredoesneedtobeanorganizationatthecentrethatdoes
![Page 458: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/458.jpg)
nothavetheprofitmotiveatitsheart,astherestillisineducation,inhealthandintelevision.Thatorganizationcouldbelocalgovernment.Iflocalgovernmentweretobuyatthebottomendofthemarket,renovateandclearthenewslums,theycouldalsomakecheaperhousingbetter.Iflocalgovernmentwereallowedtotaxhousingmorebyintroducinghighercounciltaxbandswithhigherrates,theycouldalsomakepopularhousingmoreaffordable.TheRowntreereportincludedno
radicalsuggestions,suchasgivinglocalauthoritiesthepowertoincreasetaxation,monitorhousingsupplyorinterveneasnecessary.Whatitdidusefullydowastoprojectthatthenumberofpeoplein
![Page 459: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/459.jpg)
theirtwentiesholdingamortgagewouldalmosthalveby2020.Innotchallengingcurrenttrends,butsimplyrollingthemforward,thereport’sauthorswererightinsayingthatitmightbenobadthingiffeweryoungadultstookonthefinancialriskandresponsibilityofmaintainingthephysicalrepairofabuilding;buttheyaddedthattheyoungneededmoreofachoicethansimplerecoursetotheprivaterentedmarket.Theoneandahalfmillionpeople
thattheRowntreereportsayswillnotbeabletobuyinfutureareapotentiallypowerfulpoliticalforce.Thesewillbepeoplewhowouldhaveboughthousesinthepast,butwhohavenowbeendeprivedofthedecisionwhethertorentorbuy.Theyhavealsobeendeprivedofchoice
![Page 460: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/460.jpg)
whenitcomestosocialhousing,thereisn’taverywideorattractiverangeonoffer.Thesepeople,aswellasmostof
thefamiliesthattheywillform,willmostlyhavenochoicebuttorentprivatelyusingashort-holdtenancy–eveniftheyarereadytosettledowninoneplace,eveniftheyhavechildrenforwhomschoolandnurseryplacesmustbefound.Theycanbemovedoutatanytimeduringthattenure.Therulesremaindifferentincouncilhousing,whereonceyouarein,aslongasyouoccupyalltherooms,youcanstay,butthereissolittlenowavailable.Ifrentskeeprisingastheyare,soonthese1.5millionwillhavelessrealchoiceevenwithintheprivatesectorinfuture.Theywillbelimitedto
![Page 461: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/461.jpg)
whattheycanaffordforaslongasthelandlordallows.Social(not-for-profit)housingis
bothindeclineandunderthreatofgreaterprivatization.Therearevariouswaysinwhichsocialhousingcanbeprivatized.ThebiggestprivatizationinBritishhistorywastheintroductionofthe‘right-to-buy’inthe1980s.Notnecessarilyabadpolicy;lateronI’llsuggesthowitsimplylackeda‘right-to-sell’counter-weightforpeoplewithmortgages,oroutrightowners,whowantedtoonceagainbecometenantswithouthavingtomovehome.The‘right-to-buy’didgivepeopletherighttodoupproperty,todecorate,toextend.ButwhatBritainalsoneedsistherighttogiveupthatright:toreverttoatenancyif
![Page 462: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/462.jpg)
desired,withalandlordtakingoversuchresponsibilities.Large-scaleso-called‘voluntary’
transferofcouncilstocktohousingassociationswasanotherformofprivatizationthatbeganinthe1980s.Thisbecomesespeciallyclearviewedalongsideallthechangesthathaveoccurredtomakehousingassociationslessandlesssociallymotivatedandmoreandmoreprofit-driven.Suchchangesincludetheincreaseinsalariesnowpaidtotheirtopofficials.Thesehavebeensimilartotheincreasesenjoyedbybuildingsocietyexecutivesinthe1920sand1930s.Ifmutualityisnotcarefullyguardedandpreserved,whatwereoncemutualorganizationscangraduallybecomemuchlessmutual.
![Page 463: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/463.jpg)
IntheUK,bytherecentRowntreeestimates,thenumberofadultsagedunderthirtywhoareabletoaccesshousingassociationtenanciesandcouncilhousingissettofallbyalmostathirdby2020,ortojust780,000people.Thenumberprojectedtoendupsleepingonothers’sofasortobecomeactuallyrooflessasaresultoftherecentchangestothehousingsystemisforecastbythatsameorganizationtorisetoabout81,000bythesameyear,asimilarnumbertothosebeinghousedinprison.Farmoreadultswillhavetocontinuetolivewiththeirparentswellintotheirthirtiesorforties–perhapsbecomingparentsthemselveswhileneverhavinglefthome.So,aswemakelessandlessefficientuseofourexistinghousing,
![Page 464: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/464.jpg)
somefamilieswillhavetosqueezeintofewerandfewerroomsinfuture.TheRowntreereportsuggeststhat
whatunderliesalltheseproblemsare‘thelinksbetweenalong-runningshortageofnewhousingsupplyandaffordability.Thisshortageofhousingsupplyaffectsbothhousepricesandprivatesectorrents.’4But–andthisisofcourseoneofthekeyquestionsposedbythisbook–isitassimpleasthat?Wehavenotsuddenlylostalargepartofourhousingstock.Wehavenotrecentlyhadtodemolishhugenumbersofsubstandardbuildings–atleastnotasmanyaswhenslumswereclearedinthe1960sandbefore.Itisnotthebalancebetweensupplyanddemandthathaschangedmostinrecent
![Page 465: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/465.jpg)
times,buthowhousingisowned,managedandbought.Millionsofextensions–lofts,
basementsandsoforth–havebeenaddedtoexistingpropertyoverthecourseofthelastdecadeorso.Althoughhouse-buildingisatanhistoriclow,asmentionedearlierthesupplyofdwellingsandespeciallyroomsperpersonhasneverbeenhigher.Thisisbecausesomanymoreroomshavebeenaddedtoprivatesectorproperty.Butwhathasalsochangedmostrecentlyiswhoisabletoownsomuchofthisproperty:thelarge-scaleprivatelandlords.Earlyin2013oneprivateinsurer,
Prudential,announcedthatitwasbuyingmorethan500homestobecomealandlordinthesouthofEngland,as‘acalculatedbeton
![Page 466: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/466.jpg)
yearsofgoodreturnsfrom“GenerationRent”’.5TwodayslaterthatsamecompanyannouncedthatPrudential’sbosshadreceived£7.8millioninpayandbenefitsthepreviousyear.6Hadtheannouncementsbeenmadeintheoppositeorder,thepressmighthavebeenalittlemorecriticalofthePru’snewmoveintoprivaterenting.Imaginetheheadlinesifthenew(somewhatimprudent)paylevelhadbeenannouncedfirst,andthenthemoveintoprofitingfrommovingintorenting.Howmanyhundredsoffamilieswouldhavetopayrent,alltheirrent,allyear,justtopaythatoneman’shugesalary?WhatthePrudential’s
announcements,thecoalitiongovernment’sactionsandthe
![Page 467: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/467.jpg)
Rowntreereportrepresentwhenallviewedtogetheristheconsensusofestablishmentthinking:aplantomanagegrowingwealthinequalityasmademanifestinthehousingmarket,notaplantoreverseit.TheRowntreereporttriestofindawayofhousingpeoplebetterasincomesdiverge,andasalargeandgrowingsectionofsocietybeginstorealizethattheywillneverbeabletoowntheirownhomes.Furthermore,itisaplanthatdealswiththeshrinkingofthestate:itaimstoencourageprivatelandlordstotakeoverwithakindofrenewedVictorianpaternalisticcontrolassocialhousingisprivatized;toencouragemoreofthewealthyto‘invest’inhousingbyallowingthemtowriteoffanylossesagainsttheirothertaxliabilities;7to
![Page 468: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/468.jpg)
encourageold‘prudential’savingsbodiestobecomelandlords.Thesocialrentedsectoristobetargetedatthose‘mostinneed’–thosewhomnoprivatelandlordwouldotherwisecaretohouse.Socialhousing,inotherwords,istobecomeadumpinggroundforpeopleseenashopeless.ThepoliticalresponseinEngland
totheRowntreereportwasapublicspatbetweenthethencoalitiongovernmentHousingMinister,GrantShapps,andhisLabour‘shadow’counterpart,JackDromey.Theyarguedaboutwhetherthegovernmentwasactuallybuildingafewhundred‘affordablehomes’orwhetheritwasn’tevendoingthat.Therowalsoconcernedthedemolitionandclearingofolderhousing,someofwhichcould
![Page 469: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/469.jpg)
perhapshavebeenpreserved.Theminister‘accusedthepreviousLabourgovernmentofbeingsecondonlytotheLuftwaffeindestroyinghomes’.8InresponseDromey,forLabour,madenopledgetoreversethetrendtowardsmoreprivatelandlords,butlamentedtheadventof‘GenerationRent’.SomeConservativescounteredthe
Labourspokesmanbysayingtheywouldensurethesupplyofhousingfortheneedybyevictingpeoplefromsocialhousing:thatispeoplewhocouldaffordtorentprivately.TheLiberalDemocrats,intheformofLordKirkwoodandhislike(onwhommorebelow),simplygaveagoodimpressionofnotknowingwhatwasgoingon,sogoodinfactthatitreallyispossiblethatsomedid
![Page 470: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/470.jpg)
notknow.Likethechildaccompanyingtheschoolbullywhenhetakespocketmoneyoffaweakerchild,andwholaterclaimshedidnotknowwhatwasgoingon,theLiberalDemocratsappearedtobeverygulliblecoalitionpartners.
![Page 471: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/471.jpg)
![Page 472: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/472.jpg)
SolarpanelscanbeseennowcoveringtheroofofahomeintheGleadlessEstate,Sheffield.Oftenapairofhomeswillhavebeenbuilt
originallybythecouncil,but,bylookingathowthefencinghasbeenalteredaroundthehomes,athowtherenderingorthewindowshavebeenchanged,attheadditionofanextensionoraconservatory,youmightbeabletotellifone
homeisstillinthesocialsectorandanotherisnot–althoughyoucannotalwaystellsimplybylooking.Infuturesocialhousingwillbecomemoreobvious,asitwillalmostalwaysbethemostdenselyoccupiedformofhousing.Thisisbecausethetenantsinitaretobefinediftheydonotfillthehomeupcompletely.Meanwhiletheirneighboursarelivinginwhatwaspreviouslysocialhousing,whichnowoftenlookslessandlesslikesocialhousing,andtheycanliveintheirprivatepropertyatwhateverdensitytheywish
withimpunity.
Thewiderpointthatneedstobemadeisthatallthemajorpartieshavebeenfightingovercomparativelyminorissuesratherthanaddressingtheelephantinthe
![Page 473: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/473.jpg)
room:theoverallcrisis.Allhavebeensuggestingpoliciesthattinkeratthemargins.Sometinkertomakethingsalittleworse.Forinstance,inoneLondonborough,theConservativesannouncedplansto‘preventcoupleswhoearnmorethan£40,000livinginacouncilhome’.9
AcoupleinLondonearningthatamountfromtwowagesisnotwellpaid,butfuturecouncilhousingistobereservedforthelowestpaidandthoseoutofwork,oratleastthosewhoareluckyenoughnottohavebeendeportedfromthecapitalbytheironly‘offer’ofhousingbeingveryfaraway.Whilebickeringamong
themselves,thecoalitionpartnersinBritainhavealsobeentryingtoblurtheboundarybetweenprivateand
![Page 474: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/474.jpg)
sociallandlords.Theydothispartlytofurtherprivatizesocialhousing.Onewaytheyhaveencouragedfurther‘self-privatization’istoannouncethattheywillstoppayingtherentsofpeoplelivinginsocialhousingandrelyingonwelfarebenefitsdirectlytothelandlordfrom2013.Polledbeforethemove,some80%ofhousingassociationsthoughtthatdirectpaymentofhousingbenefittotenantswouldhaveaharmfuleffectontheirassociation;84%saidrentarrearswouldriseasaresult;22%saidthattenantsnolongerpayingtheirrentwouldmakeithardtopaybacktheloanstheassociationitselfowed;and10%suggestedthattheymightevengooutofbusinessasaresultofthisonepolicychange,or–inmodern
![Page 475: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/475.jpg)
managementspeak–theymightfindita‘greatdealhardertomeettheirdeliverycommitments’.10
ThereasongivenbytheUKgovernmentfortransferringrentpaymentstotenantsistotrytomakethembetter‘customers’andbetterabletoshoparoundfortheirhousing.Thepolicyisabouttryingtoencouragefamiliestoshoptheirwayoutofacouncilorhousingassociationhomeintoasupposedlycheaperprivaterentedhome.Theplanisforthemtomoveoutoftheirownvolition.Buttheprivatesectorisnotcheaper.Itisnothardtoseewhythe
coalitiongovernmentisactingasitis.AtpresentalmostoneinfivepeopleinGreatBritainreceivesacashallowancetohelpwithrental
![Page 476: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/476.jpg)
costs.ThisisthehighestproportioninalloftheOECDcountriesforwhichthereisdata.11Theproportionisthishighbecausewagesaresolowandrentsaresohigh.Rentsescalatedthroughacombinationofremovingrentcontrolsandintroducinggreaterhousingbenefitstocompensatefortherisesthatoccurredasaresult.ThiswasalldonewhenMrsThatcherwasPrimeMinister.Todayhersuccessorgovernmentthinksitcanreducethehousingbenefitbillbygettingthosewhoreceivetheseallowancestoshoparoundforcheaperhousing.Itthinksitcanencouragetenantstolookharderbyreducingthecashallowancesofmany.Butitignorespeople’sneedstoremainwheretheygrewup,wheretheirwiderfamiliesandsupport
![Page 477: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/477.jpg)
networksare,andwheretheirchildren’sfriendslive.Italsoignoreshowgoodlandlordsareatkeepingrentshigh,ifyouallowthattobelegal.Researchonmarketshasfound
thattheyoperatewellwhenthereismoreofalevelplayingfieldbetweenconsumers,notwhensomeareveryrichandothershaveverylittle.12
Whatwouldreallymakepeoplebetter‘customers’wouldbeiftheyhadincomesmoresimilartootherpeople,asisthecaseinmostoftheotherOECDcountries,apartfromtheUS.TheUShastrailerparksinsteadofamoreequitableincomeandwealthdistribution,andsomeofthehighesthomelessratesintherichworld.Atanyonetime,eveninwinter,morethan600,000people
![Page 478: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/478.jpg)
sleeproughintheUS.13ThethreatofmasshomelessnessintheUKisusedtojustifytransferringsomuchgovernmentmoneytolandlords.ThefigurebelowshowsjusthowgreatthesubsidytoprivatelandlordsintheUKis,andwhichothercountriesaremostsimilar.Whenitcomestohousing
ownership,landlordshavebeentakingagrowingshareofhousingfinance(throughrents),notjustintheprivatesectorbutinthestateandcharitablesectorstoo.Somesupposedlynot-for-profitprovidershavealreadybecomemoreliketheirprivatesectorcounterparts.Therearenowhundredsofverywell-paidchiefexecutivesofhousingassociations,thousandsofextremelywell-remuneratedfinanceofficers
![Page 479: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/479.jpg)
andother‘top’officialsonveryhighsalaries.
Figure8.Proportionofresidentsreceivingcashallowancesforrentalcosts,byOECD
country,2009.(Note:dataisforproportionofpeople,otherthaninAustralia,Austria,
NetherlandsandNewZealand,wherewhatisshownistheproportionofhouseholds.)
Onceuponatime,eachlocalauthorityemployedahandfulofpeopletobeinoverallchargeofcouncilhousing,or,asitwasreferredto,‘thestock’.Someof
![Page 480: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/480.jpg)
thesepeopleevenlivedinthatstock.Peoplecomplainedthattheyalsodidfavoursfortheirmatestogetthemacouncilhome.Nowhardlyanyhousingmanagersliveinthekindofhometheymanage.Foritsannualsummerconference
inJune2013,heldinManchester,theCharteredInstituteofHousingreportedthatitplannedtohostsome‘7,600seniorhousingprofessionals,keyproviders,partners,suppliersandleaders’.14Atwo-dayconferencepackagecost£705,or‘just’£450foratenantrepresentative.Thesewereonlythe‘early-bird’rates.Someofthefewtenantsthatturnedupmayhavehadtopaytheirownway,buttherestofthose‘packages’willhavebeenfinancedfromrents,fromtenantsagain.Evenifnotenantshad
![Page 481: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/481.jpg)
attended,ifeveryonehadpaidthat£705rateandall7,600‘senior’folkhadturnedup,thatamountstoa£5,358,000conferencebill.It’salotofmoneytohaveapartyinManchester.Mypointhereisthatthosewhousedtoprovideaservicecalledhousingnowincreasinglyseethemselvesasbeinginthe‘housingindustry’,needingto‘network’,tounderstand‘strategicandoperational’issues–butsomeonehastopayforthemtodoallthis.15
Bysqueezingpeopleintotheirpropertiesmoreefficiently,housingassociationsaspiretobecomingricher‘not-for-profit’businesses.Peoplewithanextraroomintheirpropertywillbegiventhe‘choice’ofleavingtheirhomeorofsomehowfindingthesparemoneytohandover
![Page 482: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/482.jpg)
totheassociation,maybebyworking‘ontheside’,orbeggingfromrelatives.Somewilljustfinditalltoomuch.Inautumn2012StuartHodkinson,ahousingresearcherandlecturerbasedintheUniversityofLeeds,explainedthatalready
quotasarebeingusedtolimitcertaintypesoftenantsfromaccessingnewsocialhousing…SincecomingtopowerinMay2010,thecoalitionhasgonetowaronsocialhousingandsocialtenants,especiallyinEnglandandWales…WhenIspokerecentlytoatenantinLeedsalreadysufferingfromdepressionandunabletoworkandnowfacedwiththisappallingchoice[ofhavingtoleaveherhome],shebrokedownintearsandsaidshewasthinkingaboutkillingherself
…16
Whatmakesthecurrentsituationsoinfuriatingisthatithasbeen
![Page 483: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/483.jpg)
createdbyrisinggreedandselfishness,notbysomenationalemergencyornaturaldisaster.Itisnotthatwehavehadmorechildrenandthattheynolongerfitintothehomeswehave,thatthebuildingandextendingofhousinghasnotkeptpacewithpopulationgrowth.Wehavenotjustlosthousinginawarorduetoahugeearthquake.Itisthatafewpeoplehavechosentomakewhatwasnotnecessarilyagreathousingsystemworse,andtheeffectsarefeltfarandwide.OnereadercommentingonStuart
Hodkinson’sresearchfindingsconcurred:‘Peoplehavetowaityearsonahousinglist,andaremadetofeellikescumiftheyneedtoapplyforhousingbenefittopayaprivatelandlord,iftheycaneven
![Page 484: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/484.jpg)
havehousingbenefitinthefirstplace.Thisgovernmentmakespeoplesuicidaljustfornotbeingabletoaffordtolive.’Thatiswhatacrisisturningintoadisasterfeelslike.Ultimatelythereasonforhavingsociallandlordsistopreventpeoplefromthinkingofkillingthemselves.
![Page 485: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/485.jpg)
![Page 486: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/486.jpg)
Thisphotograph,oftheentrancetoatowerblockintheSharrowareaofSheffield,couldhavebeentakenseveraldecadesagoandwouldhavelookedthesame,butforthenewkeypadonthedoor.Thoseluckyenoughtobeallowedsocialhousingnowadays,andsoavoidthe
bottomendoftheprivatesector,cannowstayinitonlyaslongastheyhaveenoughchildrentofilleveryroom,orhavewell-enough-paidworkorsomeextrasourceofincomeontheside.Socialhousinghascometobeseenmoreasatransitcampforfamilieswithchildrenmostinneed,andlessasapermanentbase.Ifaplaceishome,thereisnoneedforasignsaying‘Noballgames’.Peopleeitherknownottoplay,ortheygetglassfittedthatbreakslesseasily.Childrenneedexerciseandplay,aroundaplacethatishome,butnotaroundsomewheretheyarejust
passingthrough.
THEBEDROOMTAX
Athirdofthosehitbythe‘spareroom’taxaredisabled,withnoexemptionfordivorcedparentsorfosterparentswithvisitingchildren.FamiliesinHartlepoolandLiverpoolwhohavesufferedthedeathofachild
![Page 487: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/487.jpg)
nowfacecutsfortheiremptybedrooms.Nothingabouthousingpolicymakessense.Thegovernmentisrightthatspending£23billionayearonhousingbenefitisgrosslywasteful,butwhypunishtenantswhenmostofitgoesstraighttolandlords?Theyclaimedthesecutswouldmakerentsfall,butinsteadtheyrise.
–PollyToynbee,201317
TheBedroomTaxisaviletax.WorsethanthePollTax,ittargetsonlythosewithleast,thosewhoalreadyneedtorelyonthestatetohelppaytheirrent,butwhohappentobedeemedtohaveaspareroom.Maybearoomachilddoestheirhomeworkin,andthensleepsin,whentheirbrotherorsistersleepsnextdoor;ormaybearoomforanadultwhocoughsandwheezesallnight;ormaybeseparatebedrooms
![Page 488: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/488.jpg)
fortheparentsiftheyarejuststayingtogetherforthesakeofthechildren.Rememberthatwheneverpossibleallthechildrenarealreadyexpectedtohavedoubledup.Andalsorememberthatinmanyplacestherearefarmorethree-bedthantwo-bedorone-bedsocialhousingunits.Iftheyasktomove,thereisalmostalwaysnolocallyavailablesocialhousingappropriatetotheircircumstances.Thetaxiswrong.ButforthemajorityofpeoplewhohearoftheBedroomTax,andwhoarenotaffectedbyit,theideathatpeopleonbenefitsshouldnotbeabletohavea‘spareroom’canatfirstsoundseductivelysensible.Thewaywerunhousingalready
contributestosocialsegregationinBritain.InmanywaystheBedroom
![Page 489: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/489.jpg)
Taxissettoexacerbatethatsegregationbymovingthosewhocan’taffordtopayitawayfromareaswherethehomeshaveanextraroominthem,towardstwo-bedandone-bedflats.Alternativelyitcouldbearguedthatintheorynationalratesofethnicsegregationwillbereducedbyforcingpoorerminorityresidentsoutofthecapital.ButinpracticeethnicandreligioussegregationisalreadyquicklyfallingingeneralinBritain,andhasbeensinceatleast1991.18OutsideLondontheverylargemajorityofpeopleaffectedbythenewBedroomTaxwillbewhite.ThevastmajorityofhouseholdsaffectedbythetaxlivealongwayfromLondon,wheretherearemorespareroomsandoftenthereismoresparehousing.
![Page 490: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/490.jpg)
YoumighthavethoughtthatthegovernmentinBritain,facedwithanincreasinglyinefficientdistributionofhousinguse,wouldtrytointroducepoliciesthatwouldspreadbedroomsoutalittlemoreevenly,andhelppeopletostayinplaceswheretherearemoreroomsinordertoreduceindustrialdecline.Intheevent,itdidtheopposite,whilepurportingtobetaxingvacantbedrooms.WiththeintroductionofthenotoriousBedroomTaxinApril2013,thegovernmenthastargetedthegroupofhouseholdsthatisalreadyusinghousingmostefficiently:peoplelivinginsocialrentedhousingwhoarenotpensioners,thosetenantswhoarealreadymostcrowdedintosmallerhomes.Thegovernmentis
![Page 491: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/491.jpg)
demandingthatthisgroupcrowdevenmoretightlyintotheirmodesthomes.TheBedroomTax(ineffect,a
reductioninhousingbenefit)appliestoallsocialhousingtenantsinGreatBritainwhoreceivehousingbenefitandaredeemedtobeofworkingage.Itcanalsobeappliedtonewtenantswhoarepensioners.19Thenumberofbedroomsafamilyisallowedisoneforeachadultcoupleandoneforanyotherpersonoversixteenyears;however,anytwochildrenbelowsixteenmustshareabedroom,exceptwhenthiswouldinvolvetwochildrenoftheoppositesexovertheageoftenhavingtoshare.So,ifyouareafatherofafifteen-year-oldboyandaten-year-oldboy,youareallowedtohave
![Page 492: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/492.jpg)
onlyatwo-bedroomhomeorflat;foranyextrabedroomyouwillhaveyourbenefitreduced.Inthecaseofaseparatedordivorcedcouple,ifonechildalsohasabedroomattheirmother’shome,andtheirmotheristhemaincarer,anybedroomusedattheirfather’shomebecomessubjecttoBedroomTax.TheBedroomTaxrestrictions
wereinitiallyastightasitispossibletoimagine,otherthanthattheyexcludedpensioners.Atfirst,fosterchildrenwerenotacknowledgedaspartofthehouseholdforbenefitpurposes,sofosterparentswouldbetaxedforanyroomsinwhichtheymightsleep.Later,theregulationswererelaxedalittle,butrightuptothelastminutebeforethetax(or‘charge’)becamelawtheruleskept
![Page 493: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/493.jpg)
onbeingchanged.Forinstance,inMarch2013,amonthbeforetheimplementationofthetax,governmentministerssaidthatupto5,000fostercarerswouldbeexemptfromthebenefitsdeduction.Yetrepresentativesofhousingcharitiescounteredthattheexemptionwouldapplyonlytoasingleadditionalroom,andwouldnotapplytocarersinreceiptofhousingbenefitwholookedaftermorethanonefosterchild.20
![Page 494: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/494.jpg)
![Page 495: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/495.jpg)
TheGleadlessValleyishometoseveralhousingestatesinthesouthofSheffield.Thisimageshowsaviewofthemainroadupthevalley.TheBedroomTaxwillaffectmainly
peoplelivinginhousingsuchasthis,maisonetteswheretheremaynolongerbeachildorapairofchildrenoccupyingeverybedroom.Aspeople’sfamiliesage,astheirchildrenleavehome–orifachildgetsintouniversityforexample–theywillbecomeliableforthetax.Manyfamiliesintheseflatswillnow,ineffect,befinedifanyoftheseeventsoccurandforcedtotrytofind
cheaperaccommodationwhentheycannotpaythefine.Iftheycouldaffordtopaythefine,theywouldnotbeeligibleforbenefitsinthefirst
place.ThereisalmostnocheaperaccommodationinSheffield,andsotheywill
havetoeatless,orusethebuslessfrequently,orgetintomoredebtmore–justtogetby.
ThenewBedroomTaxalsomakesnoallowancefordisabledpeople,includingpeoplelivinginadaptedorspeciallydesignedproperties,unlesslocalauthoritieschoosetomakesuchallowancesavailable.Ifadisabled
![Page 496: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/496.jpg)
childneedshisorherownbedroom,21well,badluck:thechild’sfamilyisstillliableforthetax,thoughtheycanapplytoalocaldiscretionaryfundinthehopeofahandouttocoverit.Mostcallouslyifachilddiesandwastheonlyoccupantofabedroom,thefamilyistaxeduntiltheyvacatethehome(orhaveanotherchildtoreplacetheirdeadone).Evenifthedeadchildwassharing,ifanothersiblinghadabedroomoftheirown,then,dependingonthatsibling’sage,theirbrotherorsister’sdeathcouldmeanthatchildnowhastoshare,thethirdroomofthehomebecomesvacant,andthefamilyareliableforthetax.DickenswouldhavebeenabletodescribethismuchbetterthanIhave–notjustbecausehecouldwriteso
![Page 497: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/497.jpg)
well,butbecausehewouldhavebeenfamiliarwiththesentiment.TheBedroomTaxis14%oftotal
rent(notjustoftheeligiblehousingbenefitreceived)foroneextrabedroom,or25%ifafamilyisdeemedtohavetwosparerooms.Assumingarentof£100aweek,thehousehold,therefore,gets£14aweeklessinbenefitsthanitisdeemedtoneedbecauseofthedefinitionofoneroom.Theymustmakeuptheshortfall,probablyoutofbenefitsthattheyreceivetofeedthemselvesandtheirchildren.Housingassociationtenantsare,onaverage,losing£16aweekforhavinga‘spare’room.RecentamendmentsmeanthatwhenUniversalCreditcomesinthiswillincludeanyroomusedintermittently
![Page 498: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/498.jpg)
byachildwhoattendsuniversityformorethansixmonthsayear.AsIwrite,UniversalCreditiscurrentlybeingpilotedinafewareasandissettobespreadacrossallofthecountryby2014,beingfullyimplementedby2017.Itwillaffectmillionsoffamiliesandhowtheyarehoused.TheBedroomTaxisatasteof
whatistocomefromUniversalCredit.Thetaxisalreadyaffectinganestimated660,000working-agesocialtenants,or31%ofexistingworking-agehousingbenefitclaimantsacrosstheentiresocialhousingsector.Themajorityofthesepeoplehaveonlyoneextrabedroom,which,inmanycases–aspertheexamplesabove–itisnotreally‘spare’.22Ifanycomparisonismadewithlivingconditionsfortherestof
![Page 499: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/499.jpg)
thepopulation,itbecomesevenmoreobviousthattheseroomswouldnotnormallybeconsideredspare.Peoplenowoftenhavemoreneedofmoreroomthantheyusedto.ChildrenaremadetodomorehomeworkthanwhenIwasachild.Peopleoftennowhavetoworkpartofthetimefromhome.Withsocialhousingbeingturned
intodormitoryhousing,thelinebetweenthesocialrentedsectorandtheprivatemarketisbecomingstarker,despitealltheattemptstoblurit.Youmighthavetherighttobuy,butyounolongerhavetherighttostayput.AnotthathighlypaiduniversitylecturerlivinginsocialhousinginLondonwrotetomerecentlyaboutthisissue,sayingthatevenhecouldnotunderstandwhat
![Page 500: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/500.jpg)
wasgoingon.Hesaid‘evenhe’becausehedidresearchinthisarea,wassupposedtobeabletoworkoutthedetails,butcouldn’t,despitethepossibilityofbeingadverselyaffectedbyit:
IliveinaflatblockthatismanagedbyMetropolitanHousingsogettheirnewsletter.Therecentonetriedtoexplainwhether,basically,youwereabouttoloseyourhomeduetothenumberofchildren,theirages,sexes,rooms,etc.Intheendtheyjustsaid,it’scomplicated,there’snowayyoucouldfigureitout,socallusifyouwant.Lookingatthecriteriareallydidinduceinmeoneofthose‘outofplaceandtime’feelings,likeawormholesomewhereinWhitehallhadallowedtheChadwickReportto
slipontosomeone’sBlackBerry.23
Whenhetalksofawormhole,thisuniversitylecturerisreferringtoEdwinChadwick,anineteenth-
![Page 501: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/501.jpg)
centurylawyerwhosereporthelpedtousherinthenotoriousPoorLawAmendmentActof1834.UnderthisAct,theaggregateofPoorLawsestablishedoverthecenturieswasabolishedinanefforttocutcosts;outsidereliefwasended;andthepoorcouldreceivehelponlythroughacentralizedsystemofworkhouseunions,madedeliberatelyharshinordertodiscouragethemfromseekingaid.OnehundredandeightyyearslaterinLondon,theparallelsseemfairlyobvious.AminoritywouldliketoturntheclockbacktotheimmoralityofearlyVictorianEngland,wheretheweakestwerethemostpenalized.InOctober2012,sixmonths
beforetheBedroomTax’sannouncement,itwasrevealedthat
![Page 502: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/502.jpg)
almosttwothirdsofallthetenantswhowouldbeaffectedbythetaxhadadisability;manyofthemweredisabledchildren.Inthepast,itwaspreciselythesehouseholdsthathadbeendeliberatelyallocatedextraspace.OnhearingtheannouncementofthisfactintheHouseofLords,oneLiberalDemocratmemberofthegovernmentthathadintroducedthesedraconianmeasures,LordArchyKirkwood,claimed:‘Iwastakenabackbytheextenttowhichtheclientgroup[disabledpeople]willbeaffectedbythispolicychange.IwishthatIhadknownitduringthepassageofthebill.’24
Uponcloserexamination,LordKirkwood’scommentappearstohavebeennothingmorethananattempttowashhishandsofthe
![Page 503: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/503.jpg)
responsibility.In2011DerekLong,headoftheNationalHousingFederation’sNorthernRegions,hadexplainedquiteclearlythat‘thispolicywillhitdisabledpeople,fostercarersandcaresharers.Thesocialsectorisalreadyfourtimesmoreefficientthanthemarketatmatchingpeopletohomes.’25OnerespondenttoLong’snews,writingunderapseudonym,26explainedthatevenearlier,in2010,‘whenanalystsunderstoodtheconsequencesofwelfarereformsandraisedtheseissueswithGrantShapps[theHousingMinister],heconfirmedthatnoneofthesereformswouldaffectexistingtenants:thishasprovedtobealie.’Itisverypossiblethata
Conservativeministerwhomight
![Page 504: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/504.jpg)
havebeendeceivingtenantswasalsoperhapsnottellingthewholetruthtohiscoalitionpartnersingovernment,butapoliticianwithLordKirkwood’sexperienceoughttohavebeenabletoseparatefactfromfiction.Hisandothers’failuretodothatwillhaveconsiderablerepercussions.Housingassociationsareconcernedthat,withtheintroductionoftheBedroomTax,rentarrearswillskyrocketashouseholdsfallbehind,havingnowaytofindtheextrarent.Theonlyotheroption,movingout,willprovefinanciallyprohibitive:movinghomealwayscomesatacost.Todaytherearefarfewercheaperhomestomovetothaneverbefore.Thereisanotherpotentialside-
effectoftheBedroomTax,one
![Page 505: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/505.jpg)
presumablyunforeseenbypolicymakers,butspottedbyaffectedtenants.LornaHolden,wholivedinHartlepool,saidofthetax:‘MypersonalopinionisthatifyoustartaddingBedroomTaxesonandsaying,“You’reunderoccupying”,peoplearejustgoingtooccupythatspacebyhavingmorekids.Andthentheygetmorebenefitfromthegovernmentbecausethey’vegotmorekids.Sowhatthey’rereallydoingispunishingpeoplewhoaretryingtowork,andbringupafamily,andwhoneedthatextrabitofsupporttomakeendsmeet.Ijustdon’tseehowit’sgoingtowork.’27
AlthoughhousingcharitiessaidthatfromApril2013around670,000so-calledunderoccupyingtenantswouldhavetopaybetween£11and
![Page 506: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/506.jpg)
£20aweekextrafortheirapparentoveruseofsocialhousing,thesefigureswereknownfarearlierthanthat.InJune2012theBBChadtriedtoexplainwhytheBedroomTaxwasdoomedtofailure,revealingNationalHousingFederationestimatesthatonly68,000one-bedroomtenanciesbecomeavailableeachyear,whilealmostthreetimesasmanytenantswouldbeofficiallyoveroccupyingtwo-bedroompropertiesaccordingtotheApril2013regulations.TheBBCthenreportedthegovernmentWelfareMinister,LordFreud,sayingthattheextrabedroomswerea‘luxury’.28
Thiswasdespitethealmosttotalnon-existenceofsmallerpropertiesforthesetenants.Thefewthatdoexisthavealreadybeenallocatedto
![Page 507: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/507.jpg)
smallernewlyhomelesshouseholds.Andthere’salongwaitinglisttoboot.It’stimetotakestock.Therearesparebedroomsin
England,buttheyarealmostallinprivatelyownedhomesthatarenotbeingrented.PerhapsifMPsweredeprivedoftheirtaxpayer-subsidizedLondonpropertywheneverthatpropertyhasasparebedroom(perhapstheonethattheyuseasastudy),theymightunderstandtheissuesbetter.Takingaway14%ofthesubsidywouldn’twork:MPs’salariesaresuchthattheywouldhardlynoticethedifference.Youwouldhavetomakethetaxproportionaltotheirdisposableincomes,orincludeallthesparebedroomsinalltheirproperties.Eventhentheywouldprobablyjust
![Page 508: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/508.jpg)
feelangry,notveryfrightened,likethetenantsaffectedbytheBedroomTax.Similarly,ifLordFreud(whosepersonalwealthmakestheaverageMPlooklikeapauper29)believesthathavingasinglesparebedroomisaluxury,presumablyhewouldbewillingtolivewithoutanyspareonesinanyhomeshemightown?Ormaybejustkeeptwoorthreespareonesandgiveuptherest?Tosomeonewhoneedsabed?Itwouldbeworthwhileaskinghim:hehaseightbedroomsinhisLondonhome.LordFreudisrememberedforrecommendingthatmoregroupsonbenefits,suchassomesinglemums,shouldberequiredtoseekpaidemployment.Itistruethat‘thedayswhen
havingababygotyouacouncil
![Page 509: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/509.jpg)
propertystraightawayarelonggone’30(Iquotethisbecauseitwasneveruniversallytrue).But,sadly,thedayswhenyoumighthavetohaveababyifyouwanttostayinyourhomemaywellnowbearrivinginEngland.UrbanlegendhasitthatinMiltonKeynesinthe1970syoucouldgetacouncilhousetomoveintoonthedayofyourmarriage,nochildrequired.Wesoquicklyforgetthosefarmoreequitabletimes,assomeofusreturntoolder,outdatedmoralities.Theissueofpeoplehavingbabies
tobeabletosecurewelfarepaymentshasapedigreeatleast180yearsold.The1832RoyalCommissionthatexaminedthereformofthePoorLaws,priortotheintroductionofthePoorLaw
![Page 510: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/510.jpg)
AmendmentAct,was‘haunted[by]theimageofwomenproducingmultiplebastardsforprofit’.31Whenparliamentbroughtinthe1834Actandreducedwelfare,therewasnoreductioninwhatwasthencalledbastardy,whichhadbeenanaimofthelegislation,buttherewasagreatriseinpoverty.AsaresulttheBritisheventuallygotsociallandlords–butitwasalong,torturousandtortuousprocessfromlosingrightsin1834togainingthemslowlyoverthecourseofthecenturythatfollowed.Then,withdevolutioninScotlandandWalesin1999,peopleinthesecountriesgainedevenmorecontrolovertheirownhousing.ItseemsthatnowitismostlytheEnglishwhoaregettingridofmuchthatremainsoftheoriginalethosoftheirsocial
![Page 511: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/511.jpg)
housingsystemandtryingtoturnit,attheextremes,intotemporary,dormitory,skid-rowhousing.ButitisonlysomeoftheEnglish,andsofartheyhavenotbeencompletelysuccessful.
SKIMMINGPROFITS
Thenumberoffamiliesrentingtheirhomehasdoubledoverthepasttenyears,asmoreandmorepeoplearepricedoutofhomeownership.
–Shelter,201332
Whattenantscomplainaboutmostisnotthebadtreatmentmetedoutbylandlords,butthesensethattheyareslowlybeingbleddryofanypotentialsmallamountofwealth,andsavingsfortheiroldage.33Mosttenantscannotsaveastheypaysomuchrent.Andbecausetheycannot
![Page 512: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/512.jpg)
save,theycannotbuildupadeposit,whichinturnmeanstheycannottakeoutamortgage.Inthepast,whenpriceswerelower,mortgageswerecheaper.Backthenbuildingsocietiesdominated.Thesewereorganizationsthatexistedtohelptenantsbecomebuyers,andwhichdidsowithouttakingaprofit;butmostbecamebanksinthe1980sand1990s.BarclaysBank,throughits
subsidiarytheWoolwich–onceabuildingsociety–triedtodrumupmortgagebusinessinsummer2012byreleasingfiguressuggestingthatowningyourhome,ratherthanrentingit,wouldsaveyou£194,000overfiftyyears.Itadded,‘thisdoesn’tevenincludethevalueofthehomeyou’llownattheendofit.Whilethetotalcostofmortgage
![Page 513: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/513.jpg)
repayments,maintenanceandothercostsofowningtheaveragehomewouldcometo£429,000overfiftyyears,rentingasimilarhomeoverthesameperiodwouldcost£623,000.’34Iftenantsintheprivaterentedmarketfeelbleddry,theyhavecause.Whatthebankdidnotpointoutis
whomakesthemostmoneyoutoflendingthefundsneededtoraiseamortgage.Thebankalsoomittedtohighlighttheflexibilityofrenting,andhowmuchyouloseifyoufailtopaythemortgageofahomeyouaretryingtobuy.Itwillhavebeeninthesmallprintoftheirpressrelease,forlegalreasons,butitwasnotaprominentpartofthestory.Whenyourbanksuddenlyraises
itsinterestrate,yourbestopt-out
![Page 514: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/514.jpg)
maybetotrytosellyourhome.Youcouldtrytoshoparoundforabettermortgage,butthereareusuallypenaltyfeestopayandnothingmuchbetteronoffer.Ifyourlandlordraisestherent,youcanquittheplacefarmoreeasilyandyoudon’tneedtofindabuyer,butyoumayhavetroublelocatinganewhome.IntheUK,tenantsreallydon’thavethatmanyadvantages–yes,theremaybeflexibility,butthere’sverylittleprotectioninanassuredshortholdtenancy–nottomentionthefactthatrentsarenowgoingthroughtheroof,whilemortgageinterestratesare,currently,flat-lining.Ifbeingaprivatetenantwerenot
soinsecure,peoplemightlookalittlemorescepticallyattheideaofbecomingamortgage-holder.
![Page 515: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/515.jpg)
Alreadymanyhavelostwhatfaiththeyoncehadinhousingtosecurethemalittlewealth,alittlesecurity,inlaterlife.Accordingtotheworld’smostpowerfulcentralbank,theUSFederalReserve,thehousingmarketcrashhad,by2010,wipedouttwowholedecadesofsupposedwealthaccumulationamassedbyAmericanfamilies.Adjustingforinflation,by2007
themedianfamilyintheUShadamassedanetwealthof$126,400,accordingtotheUSFederalReserve.Butby2010thathadalmosthalvedto$77,300fortheAmericanfamilythatwaspositionedcentre-stagewheneveryfamilywasputinorderaccordingtowealth.Inshort,themedianaverageAmericanhadbecomemuchlesswealthyinthe
![Page 516: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/516.jpg)
courseofaverybriefperiodoftime.TheNewYorkTimesreportedthatthehousingmarketcrashdirectlyaccountedforthreequartersofthatlossofapparentlyamassedwealth.35
Itisnotthateveryadultwantstobeahomeowner.Infactprivatelyrentingtenantsareoftenamongthehappieroftenuregroupssurveyed–buttheyalsotendtobeyoungandoptimistic;afteralltherearealmosttwomillionuniversitystudentsinBritainandmostofthemrentprivately.Rentingalsomakesiteasiertobemobileforemploymentopportunities,butithasitsdrawbackswhenandwhereinequalityishigh.36ThefactisthatinveryunequalcountriessuchastheUKorUStherearemanyreasonswhypeoplewanttobeinthetop
![Page 517: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/517.jpg)
tenthofsocietyasdefinedbyincomeandwealth,andthetoptenthtendtoownproperty.Inmoreequitableaffluentcountriestheadvantagesofbeingricharelessobviousandthedisadvantagesofhavinglessaregreatlyreduced.Itisfareasiertorentandlivewell
inamoreequitableaffluentnation.ThesameNewYorkTimesreportfoundthat,evendespitethecrash,‘RankingAmericanfamiliesbyincome,thetop10%ofhouseholdsstillearnedanaverageof$349,000in2010.Theaveragenetworthofthesamefamilieswas$2.9million.’Althoughitisonlyanaveragewithintherichesttenth,itishardlysurprisingtheywouldwishtotrytoprotecttheirposition,havinggotsofaraheadoftherest.However,when
![Page 518: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/518.jpg)
averagewagesandwealthfall,therestmaycometorealizethattherichcanonlybecomericherattheexpenseoftheother90%ofUSsociety.TheaveragemedianAmericanfamilynowearnnearlyaneighthofwhatthebest-offtenthearnayear;medianUSfamilyincomefellto$45,800in2010from$49,600in2007.Insterling$45,800wasthenaround£28,600ayear.ThatisMiddleAmerica.Halfthepopulationarepoorerthanthat,manyverymuchpoorer.Partofthereasontherichesttenth
becamesoextraordinarilywealthyintheUSisbecauseotherstherearesopoor.Bydefinitionall‘successful’richlandlordsareinthetop10%.Theyrelyfortheirincomeonotherpeoplehavingtopaythemrents,
![Page 519: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/519.jpg)
highrents,moremoneythanthoselandlordsneedtoliveagoodlife.Othersworkinthefinanceindustrygivingoutloans,aslawyersforbanks,orasrealtors(estateagents)whocandoverywellwhenthemarketisbuoyant.InBritainmoreandmoreestate
agentswerehiredduring2012;theyaccountedforoneinfourofallnewjobscreatedthatyear.37By2013oneineverythreenewjobsintheUKwasnew(oftentemporary)employmentasanestateagent.38
Increasinglyestateagentsalsoworkforlandlords,managingpropertiesontheirbehalf.Manylandlordsarerichenoughnottoneedtointeractwiththeirtenantsthemselves.InboththeUKandtheUS,ifthistrendcarrieson,wewillreachapoint
![Page 520: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/520.jpg)
wherewesee‘thewholeuppertenthofanationlivingwiththeinsoucianceofgranddukesandthecasualnessofchorusgirls’.ThiswashowF.ScottFitzgerald,authorofTheGreatGatsby,succinctlydescribedtheinequitiesof1920sAmericainTalesoftheJazzAge.39
ThisiswhattheUSisreturningto,accordingtothestatisticsoninequalitiesinincomeandwealthjustquotedabove,anditisalsowhattheUKisheadingtowardsifitdoesnotchangecourse.AlmostacenturyagoFitzgerald
wroteofthecasualnessoftheRoaringTwenties.TodayaverageincomesareagainfallingintheUS,justastheydidbackthen.Butnationalincomethen,GrossDomesticProduct(GDP),wason
![Page 521: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/521.jpg)
averagealmostalwaysrising.ItisrisingagainnowinboththeUKandUS.Afewpeopleareagaingettingverywealthy,sothereportedmeantake-homeincomeofpeopleintheStatesrisestodayasthemedianincomefalls.Meanaverageincomeofeveryonecanrisewhenjustonerichperson’sincomerises;butthemedianincomerisesonlyifmostincomesrise.SomethingverysimilarisalsohappeninginBritain:meanincomesarebeingrecordedasrisingevenasthemediannationalincomefallsandinequalitiesgrow.40
Thisriseinincomeandwealthinequalityissoimportantwhenitcomestohousingthathowitaffectsbehaviourneedstobethoughtaboutcarefully.Thinkagainofthatboyinthehypotheticalschoolclass
![Page 522: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/522.jpg)
mentionedrightatthestartofthisbook,butnowlet’smakehimBritish,sotheboyisreceiving£20adaypocketmoneywhileallhisclassmatesintheyear,allninety-nineoftheminthosethreeclasses,receive,onaverage,80penceeachaday.Themeanaveragepocketmoneyofthatyeargroupisthenalmost£1aday.Ifalltherestoftheyeargroupseetheirpocketmoneydrop,onaverageby5pence,butthatoneboyreceivesanextra£5aday,meanaveragepocketmoneyissaidtohaverisen,eventhoughalmosteveryoneisworseoff.IntheUK,asmoreandmore
peoplerentedbetween2001and2011,andasmedianincomesbegantofallinrealterms,theincomesofthoseatthetopofsocietyrose.A
![Page 523: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/523.jpg)
partofthatrisewasduetoincreasingrentalincomes.Furthermore,theUKgovernmentalsoactivelyhelpedsomeofthebest-offlandlordsinBritaintobecomewealthier.Thinkagainaboutthatboyintheclass.Wheredidhisextrapocketmoneycomefrom?Well,supposethathisparentshaveboughtsome‘buy-to-let’flatsandarerentingthemouttotheparentsoftheotherchildreninhisschool.Thoseparentswillbealittleworseoffwhentherentrises,andunabletogiveasmuchpocketmoneytotheirchildren,buthisparentswillhavegainedmore.Peopledon’trentoutpropertybecausetheyaremagnanimous.ButgovernmentintheUKwantstoencouragemoreindividualsandcorporationstobecomelandlords,as
![Page 524: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/524.jpg)
wellasthesameoldlandlordstorentoutmoreproperty.On1February2013theUK
coalitiongovernmentsetoutaplaninwhichupto£10billionwouldbehandedouttoprivatelandlords.Theygaveanexample,and,again,thinkofthathypotheticalrichboy’sparentsas‘investors’tovisualizehowthiswillplayout:‘Aninvestorwantstobuildablockof100flats,whichtheywillthenofferforprivaterent[and]thevalueofthebuiltflatswillbe£20million.Theycanapplytotheguaranteeschemeforupto£16million,or80%oftheendvalue.’41
Nownote,thisisaguarantee,notagift,butitisaguaranteetopreventthelandlordfromincurringanyrealrisktohisinvestment.Thegovernmentis,ineffect,
![Page 525: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/525.jpg)
guaranteeingthat,intheeventthattheflatscan’tbelet,theycanbesold,andsoldatalossthatwewillallbecoveringbecauseitisgovernmentmoney.Governmentappearstobelievethatthemoneywillalwaysberepaiduponfuturesale–thatis,thattherewillbenofuturepricedropsonthebuildinvestment.Nordoesitbelievethattherewillbefuturerentreductions.ThisisworryinglyGatsby-esque.Ifthathypotheticalboy’sparentsweretobuildanother100flatstorentouttootherchildren’sparents,theymightgetevenricher;butiftheschemeweretofail,alltheotherchildren’sparentswouldhavetomakeuptheirlossthroughtheirtaxes;andtheirchildrenmighthavetosharesomeofthecoststooin
![Page 526: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/526.jpg)
futuretaxpayments,asnationaldebtwouldrise,raisinginterestpaymentsfarintothefuture.Allthiscouldresultfromthegovernment’sencouragementofthebest-offboy’sparents’effortstobecomeevenricher.Thegovernment’sunderwritingof
theinvestmentsofprivatelandlordsenablesthemtomakesignificantprofitsintheUK’sverylightlyregulatedrentalmarket.Fromthepointofviewoftenants,theregulationsintheUKmarketareweightedinfavouroflandlords.Thegovernmentisguaranteeingtherisksonthelandlords’investments;thecourtswillhelpthoselandlordsevicttheirtenantswithjustsixtydays’notice.Ifeverythinggoespear-shapedandthelandlord’sscheme
![Page 527: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/527.jpg)
goesbust,taxpayers’moneywouldcover80%ofanylosses.Thechancesofgovernmenthavingpitcheditspolicy‘justright’inordertogivetheprivatemarketexactlytheright‘nudge’itneedsareverylow.Bytheendof2013,MarkCarney,thenewGovernoroftheBankofEngland,wassignallingthathethoughttherewereproblemswiththeseschemes,butthiswastoolateforallthosethathadalreadybeenapprovedinthatyear.Privaterentingcomeswithmany
otherproblems.Thisisbecauseindividuallandlordsare,unsurprisingly,lookingaftertheirowninterests.Clustersofprivatelyrentedproperty–forinstancesinuniversitytowns–canmakeanareaunattractivetofamilieswhocan
![Page 528: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/528.jpg)
affordtomakegenuinechoices.Regulationshavebeenintroducedforhousinginmultipleoccupationtotrytocontroltheclusteringofmassesofbedsitsandverydenselyoccupiedhomeswithmultipletenants,buttheyareoftenignoredandlocalgovernmentenforcementofficersarebeingsackedascutsbite.Theregulationsalsodonotpreventthegardensofstudenthousesbecomingabitofatip.Itsoonbecomesclearwhenandwherethestudentsand‘youngprofessionals’aretakingover.Meanwhile,despiteincomesfalling,rentsarerising.Inlate2012theNationalHousing
Federationstatedthat‘Thecostofprivatelyrentingahomehasrisenby37%inthepastfiveyears,andissettosoarafurther35%overthenext
![Page 529: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/529.jpg)
sixyears.’42InBritain,by2010rentswerealreadythehighestinEurope.43
Veryrecentlytheyhaverisenevenfaster.Alargepropertyservicesfirm,LSL,regularlyreleasesa‘buy-to-let’indexofrentalvalues.ByOctober2012itshowedthattheaveragemonthlyrentacrossEnglandandWaleshadhitanall-timehighof£744,whichwastheseventhmonthinarowofrentincreases.ItalsorevealedthataveragerentsinLondonhadrisenintheyearby7%tonowstandat£1,102amonth,risingbymuchmorethantwicetherateofinflation.44TheyroseagainintheyeartoOctober2013,bywhichtime‘Onamonthlybasis,tenantfinancesfeelimpact,withtotallaterentupby£31million.’45Asrentscarriedonbeingraised,moreand
![Page 530: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/530.jpg)
moretenantsfoundithardertokeepuptheirpayments.Atthispointitmightagainbe
worthrememberingthatsuchpricebubblesneverlastforever,buttheycangetverylargebeforetheyburst.AsIwrite(duringlate2013)moreandmoreoutlyingareasarebeingsuckedintotheorbitoftheLondonbubble.Ifnewjobsand‘wealthcreation’arebecomingmoreconcentratedintothisparticularpartofthecountry,therecanappeartobesomerationaleforhousepricesandrentsalsorisingcorrespondingly.PartofwhatmayhavebeenstokingupthebubbleinLondonisausterityandlackofopportunityelsewhereinEurope,drivingincreasingnumbersofyoungpeopletotrytheirluckinEurope’sonlymegacity.46
![Page 531: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/531.jpg)
Beforeeveryfallinpropertyvalues,beforeeveryfallinrents,comesarapidrise.IntheUS,intheyearsfollowingtheendofwarin1918,itbecameevidentthattherewastoolittlespaceforthereturningtroopsandthechildrenofthebabyboomthatfollowedtheirreturn.AveragerentsacrossthewholeoftheUSwentupby10%in1918–19,thenby20%in1920alone,thenbyafurther10%in1921,increasingtheneachyearbyafurther8%in1922,in1923andin1924;sothatintheperioddirectlybeforethe1929crashtheyhadreached168%ofthepre-war,affordable,level.47ThegeographerDavidHarveyrecentlyassignedtohousingaverylargepartoftheblamefortheeconomiccrashesbothin1929andin2008,
![Page 532: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/532.jpg)
andbelievesthecurrenthousingsystemislargelytoblameforwhatunderliessomuchofourinequitableallocationofproperty.48
InEnglandandWalestheshareofhouseholdsrentingprivatelyroseto18%ofallhouseholdsby2011,asharpclimbfrom12%tenyearsbefore.Mostoftherisewasduetofewerpeoplebeingabletogetamortgageandmoresmallprivateapartmentsbeingbuilt.Homeownershipandbuying(combined)fellfrom69%to64%ofallhouseholdsoverthatsamedecade.Thisleftthereportednationalproportionsofsocialrentedhouseholdsfallingslightlyfrom19%to18%ofallhouseholds.49
Bythefinancialyear2011/12theaveragetenantofasocialhousing
![Page 533: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/533.jpg)
propertyinBritainhadamedianincomeofjust£8,996ayeartoliveoff.Thatmoney,£24.63aday,mightnotbejustforoneperson’sneeds:itcouldbeanelderlycouple,oraparent(ortwo)andchildren.Inrealtermsthatpittanceisabout10%lessthanthesamefigurefor2005/6.Todayfewerpeoplehavewell-paidfull-timeworkthantheydidthen;ithasbeenpart-timeworkthathasbeenincreasingthemost,asbenefitsarebeingcut,soevenifunemploymentfalls,manypeoplearenotatallwelloff.50
Unsurprisingly,giventheirverylowincomes,sometwothirdsofallsocialhousingtenantshavenosavings.51
Ofthosefewsocialhousingtenantswhodohavesavings,half
![Page 534: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/534.jpg)
havelessthan£1,000.Thecutstolocal‘social’fundstohelppeoplebuycookersandtheotheressentialitemstheyneedtolive,andthecutstothemoniesthatcouncilsonceusedtohousehomelessolderteenagers,nottomentiontheintroductionoftheBedroomTax,areallbitinghard.ThesechangesarecurrentlyaddingtotheimpoverishmentofbetweenaquarterandathirdofallsocialhousingtenantsofworkingageintheUK–anothersliceoftheknifeofcutsontopofalreadyfallingstandardsofliving.52However,whenRaquelRolnik,theUNSpecialRapporteuronHousing,highlightedfactslikethis,shewasaccusedofsimplybeingunreliable,someonewho,theDailyMailclaimed(bytalkingtohersister),hadparticipated
![Page 535: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/535.jpg)
inwitchcraft,someonewhowas,ineffect,unhinged.53Campaignersagainstwhatisoccurringareroutinelyeitherdiscreditedorignored,butrarelyaretheyvilifiedtothisextent.Fortunatelytherearemanycampaigners.
![Page 536: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/536.jpg)
![Page 537: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/537.jpg)
VelocityTower,privateapartments,locatednexttotheinnerringroadinSheffield.
Apartmentssuchasthesecanbehardtoletinthecurrentclimate:Sheffieldhasaglutofone-andtwo-bedroomprivateapartmentsbuiltwithinitsinnerringroad,alltargetedataffluentyoung
professionalsandthebest-offstudents,whohave,asyet,notarrivedinthenumbersneededtofillalltherooms.Rentsremaintoohighforthose
olderpeoplewhoarebeingdecantedoutofsocialrentingbecausetheyhavetoomanyroomsintheirhomes.Andsomoreandmoreofthebedroomswithinthecityremainorbecomeunoccupied,whilethewaitinglistforhousingcontinuestogrowinSheffield.Thecityalreadyhasthelongestwaitinglistofanylocalauthority
inEngland.
InJune2012OxfamdeclaredthattheUKwasincrisis.54Asignificantpartofthereasonitgaveformakingsuchadeclarationwastheongoinghousingcrisis.ThecharitycitedevidencethatthenumberofhousingbenefitclaimantsinworkhadmorethandoubledbetweenNovember
![Page 538: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/538.jpg)
2008andFebruary2012.Itpointedoutthat,evenbeforetherecessionhit,therehadbeenanacutehousingshortage.Itsresearchersexplainedthatby2008therewerealready1.77millionhouseholdsinEnglandlanguishingonsocialhousingwaitinglistsandthattherewereafurther489,400householdslivinginwhatwereofficiallyrecognizedasovercrowdedhomes.Theythenexplainedthatgovernmenttargetsforthebuildingofnewhomeshadrepeatedlybeenmissed,andthathousingconstructionhadslowedtoacrawlsincetherecession.Theyshowedhowthecostofhousinghadcontinuedtorise;thatthishadoccurredinspiteoftherecession;andthattherisesinrentsandpricescouldbeseeninboththeprivateand
![Page 539: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/539.jpg)
socialrentedsectors.Theydemonstratedthataveragerentswere,byJune2012,atrecordhighs(theyhaverisenagainquicklyintheyearandahalfsince)andthathomeswerealreadyunaffordableinmorethanhalfofEnglishlocalauthoritiesby2012(again,beforepriceshadrisenevenhigherbywinter2013).Theyprovidedevidencethatthenumbersofnewlyhomelesshouseholdshadincreasedby18%inEnglandbetween2010and2011.Whatresponsedidtheyreceive
fromgovernment?Nothing.Oxfamdrewthegraphicbelowto
illustratethedirectionofrecentchange.Sincethatgraphicwasdrawn,newevidencehasemergedsuggestingthat,justbelowthelevelofdirectorsandchiefexecutives,
![Page 540: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/540.jpg)
peopleintherestofthetopfifthofincomeearnersinBritainhavereceivedacutintheirdisposableincomeaswellasmostpeopleatthebottomoftheheap,andthatthuswhatisknownastheUK’squintileincomeinequalityratiohasfinallybeguntofall,asmostpeopleatthebottomstartedoffwithlesstolose.55
Buttherichestattheverytop,thebest-offtenthofthetoptenth,the1%,arestillseeingtheirrichesgrow.AyearafterOxfam’sreportwasreleased,anothermajorcharity,theNationalChildren’sBureau,producedyetanotherreportshowingthatovercrowdingandpovertyamongchildrenwasontheriseagain,andthatBritainfacedagrowingsocialapartheidbetweenrichandpoorwhenitcametowhere
![Page 541: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/541.jpg)
andhowchildrenweretobehousedinfuture.56TheNationalChildren’sBureauwasalsoignored.
![Page 542: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/542.jpg)
Figure9.IncomechangesintheUK,2011–12,accordingtooccupationofemployees,inpounds
sterlingandpercentages.
![Page 543: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/543.jpg)
AFFORDABLEHOUSING
Housingiscentraltohealth,well-being,prosperityandaspirations.Therearesignificanteconomic,socialandpoliticalreturnstoexpandingandimprovinghousingstock.Conversely,thehousingmarketcanplayadestabilizingroleinthewidereconomyanddisruptpublicpolicyintentions.Recognitionofthis,andagrowingsenseofcrisis,hasseenhousingreturnasakeyissueagain…
–BenMarshall,ResearchDirectorof
IpsosMORI,201257
Asthemajorityofpeoplebecomepoorerinrealterms,evergrowingnumbersarefindinghousinglessandlessaffordable,eveninareaswhererentsarenotrisingandwherepricesarestaticorevenfalling.Inthiscontext,‘affordablehousing’isastrangeterm.Butitisakeyplankofcurrentgovernmentpolicy,onethat
![Page 544: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/544.jpg)
originatedinthedaysofNewLabour.InFebruary2013athree-bedflat
inIslington,northLondon,wasputonthemarketat£705,000.Itwasstatedthat,ifyouhadahouseholdincomeoflessthan£77,200,andwereafirst-timebuyerwholivedoutsidetheborough,youmightbeeligibletopurchaseaquarterofthispropertyandpayareducedrentontherestof‘only’£2,425amonth.Whydoesthisarrangementbenefitonlypeopleoutsidetheborough,ratherthanthoseinit?Thereasonisthattheprovisionof
socialhousinginBritainisnowbeingmixedupwithpropertyspeculation.Therulesthatapplytothese‘affordableoffers’arethatifyouareabletopay£3,472amonth,
![Page 545: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/545.jpg)
youcouldendupowning75%oftheapartmentaftertwenty-fiveyears.Theofferappliesonlytopeoplelivingoutsidetheborough,becausethoselivingwithinithavealreadymanagedtofindawaytolivethere.Shouldthosepotentialtenants/ownersmovinginfromoutsidelaterfindthemselvesabletopayanadditional£1,047amonth,theycouldtakepartfullyinthegreatpropertycasino.58Asitis,theycannowhaveasmallstakeinit.Butwhatreallyunderliesthemaximumincomelimitof£77,200?Thereasonwhythereisamaximumincomelimitisbecausethispropertywasbeingletbyahousingassociation,whichreceivesgovernmentsubsidiesifitengageswithsuchschemes.
![Page 546: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/546.jpg)
AsIwasdownloadingthesefiguresfromthewebsiteofthisparticularhousingassociation,Icameacrossthefollowingnewsitem,whichatfirstglancesoundslikeNewYork,nottheUK:‘1February2013.News:EastVillagebiddingopensforsocialrenthomes…’59Evengettingintosocialhousingcannowinvolveenteringanauction.Allocationisnolongerbasedontheoriginalprinciplesofsocialhousing:prioritizingthoseingreatestneedorthosewhohadwaitedthelongest.Privatizationhasbeenstretchedsofarthat‘bidding’isrequiredeveninsocialhousing.Thisisadeliberateblurringoftheboundariesbetweenthestateandtheprivatesector.
![Page 547: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/547.jpg)
Therearewaysinwhichtheapartheid-likedistinctionbetweenbuyingandrentingcanandshouldbereduced.Peopleshouldbeabletomovefarmoreeasilybetweenthetwotenures,butnotinordertosecureaprofit.Theyshouldbuywhenitsuitsthemtobecometheirownlandlordandtoundertaketheupkeepofthebuilding.Theprivaterentedsectordoesnothavetobesynonymouswiththeprofit-makingsector,inthewaythatschoolinginprivateschoolsismostlynotsynonymouswithprofit-making(mostareaformofcharity).However,togettothatpointwilltakequiteafewchanges,manyofwhicharesuggestedlateroninthisbook.Firstweneedtoagreewhyweneedchange.
![Page 548: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/548.jpg)
Intheprivatesector,allocationcurrentlyhasnothingwhatsoevertodowithneed.Ifyouwantit,andcanaffordit,youcanhaveit.Thatissimilartomostprivateschooling,evenwhen,ostensibly,thereareentranceexams(manyarenotashardastheymakeout).Theprivatizationprincipleisthatapurchasecanoccurregardlessoftheneedyoumighthaveforthatproperty.Afewregulatorymeasuresmight
beinplacetotrytodeterpeoplefrombeingtoogreedy–capitalgainstaxationonsecond,thirdandfourthpropertiesandsoon–butthesecanoftenbecircumventedbytheknowledgeable.60Muchmorethanthatisneeded,includingaculturechange–butaculturechangeis
![Page 549: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/549.jpg)
possible.Theaffluentdonotsendtheirchildrentoprivateschoolsownedbyshareholders.Whyinthefuturedowethinkourchildrenandgrandchildrenwillbewillingtopurchasepropertyfromthosewhohaveboughtitforsomuchless?Peoplelearntoavoidbeingrippedoffafterfirsthavingbeenstung.Anotherwayispossible.
Affordableprivaterentingispossible,butforittobeaffordablerentcontrolsareneeded.Statisticsreleasedduring2012haveshownthatwelloveraquarterofthepopulationofcountriesaslargeasGermany,asincomeequitableasDenmark,theNetherlandsandSweden,andasaffluentasLuxembourgandAustrialiveinprivatelyrenteddwellingswithno
![Page 550: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/550.jpg)
subsidyfromthestate.Rentingcanbeverypleasurable;inSwitzerlandalmosthalf(49.9%)ofallhouseholdsrentprivately.Thetop1%ofSwissearners(includingmanybankers)takehalfasmuchasintheUK,sothosewithlesshaveproportionatelymoreandcanthereforepaymarketpricerent.61
Housingsystemsarefarfromperfectinthesecountries,andthepoorareoftenstilllivinginsubstandardhousing,butthegapsinlivingstandardsbetweendifferentgroupsinBritainarefarwiderthaninplaceslikeSwitzerland,GermanyorDenmark.
![Page 551: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/551.jpg)
![Page 552: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/552.jpg)
TakealookatawiderviewoftheGleadlessValleyinSheffield.SomuchthatisnewandinnovativeinhousingfinanceishappeninginLondonthatitiseasytoforgetthatthereason
whyhousingissoexpensiveinthecapitalisthatoverrecentdecadesmoreandmorepeoplehavebeenencouragedtomovetothesouth.ThereisnowlesshousinginSheffieldthanthereusedtobe.Muchhousingwasdemolishedadecadeagotopropuptheprivatemarket.Iusedtotakemyeldestson,whenhewasatoddler,towatchtowerblocksinSheffieldbeingblownupintheearlynoughties,oftenquitenearthisspot.Istopped
doingitwhenhestartedtosay‘towergoesboom’whenwepassedthosethatwereleft.SchemestobuildaffordablehousinginLondonarepartlyschemestosqueezemoreandmorepeopleintothatcity,whiletherearecitieswithhugeamountsofgreenspaceandbuildingsrequiringrenovationnotmorethanacoupleofhundredmilesaway.
Itiswhereincomeinequalitiesarehigherandprivatelandlordsaremostunregulated,suchasintheUKandtheUS,thatprivaterentingbecomesunaffordable;andthatiswhen
![Page 553: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/553.jpg)
peoplebecomedesperatetobuy.Averytightlyregulatedprivatemarket,weightedmoreinfavourofthetenant,canbealargepartoftheidealsolution.Regulationisveryhardforindividuallandlordstoopposeafteritbegins.Whatcantheydo:demolishtheirpropertyinafitofpiqueifdecentregulationsareintroduced?Incomeinequalitiestendtobehigherincountrieswithlessregulationovertheallocationofhousing.Itishardtoknowwhatcamefirst:thetolerationofrisinginequalitiesorthederegulationthatallowedinequalitiestorise.Insuchcountrieswhatregulationremainstendstobeaone-wayprocess,limitingthecontributionofthestatetosubsidizingjustthoseoninsufficient
![Page 554: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/554.jpg)
incomes,butnotlimitingthescopeoftherichtoprofitfromthehousingmarket.Themapbelowshowsthemaximumthatthestate,in2013,cancontributetorentsacrossEnglandandWales.62Theselimitscanbeimposed,andyetthereislittlecontroloverwhatrentslandlordscandemand,oroverhowmanypropertiesonepersoncanbuy,andleaveempty,shouldtheywish.63
Why,though,doweneedmuchofaprivaterentalmarketatall?Whynotthelarger‘property-owningdemocracy’thatweweremovingtowardsbeforethecrashandthehugeriseinprivaterenting?Intheshortterm,whatmakesbuyinghousingmoreaffordableisalowinterestrate.Byautumn2012interestratesweresolowinthe
![Page 555: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/555.jpg)
UnitedStatesthatthe‘averageonthefifteen-yearfixedmortgage,apopularrefinancingoption,dippedto2.69%,downfromlastweek’srecordlowof2.73%’.64Thiswasthelowestrateonrecord,atthattime,ofallreliablerecordsgoingbacktoatleastthe1950s.Why,then,arewenotseeingmorebuyingandlessrenting?Interestrateswereforceddownby
centralbankstodroptohistoriclowsin2008.AcrossmuchoftheperipheryofmainlandEurope,andbothintheUKandintheUS,hugenumbersofpeoplehadbeencoercedintoborrowingextremelylargesumsofmoney.However,thefinancesofthenextpotentialcohortofhome-buyerswereonaverage(bythen)insuchapoorstate,andtheirabilitytoputdownadeposithadbeenso
![Page 556: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/556.jpg)
diminishedbytheslump,thatlendersbecamedesperate,andtheBankofEngland,theEuropeanCentralBank,theFederalReserveBankandalltheothercentralbanksofrich(andnotsorich)nationsstartedtodowhateverittooktokeepbaserateslow.Foratime,intheUK,thiscameclosetogivingmoneyawaytothecommercialbanksthatdidthelending(at0.5%orless),and,althoughthemoneystillhastoberepaid,atthatinterestratethereisnotsomuchurgencytorepay.
![Page 557: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/557.jpg)
Figure10.MaximumweeklylocalhousingallowancepermittedafterApril2013,England
andWales.
Becausenoalternativetofree-marketmayhemisimagined,interestratesintheUKhavetostaylowtodaytopreventthehousingcrisisturningintoaUS-styledisaster.Tenyearsagoadeposittobuyahomein
![Page 558: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/558.jpg)
theUKwasaboutninemonths’averagesalary;nowitisthreeyears’.65Banksrequirefarhigherdeposits,andaveragesalarieshavefalleninrealterms.Withhousepricescontinuingtosoar,somethinghadtogive,andthatsomethingwasinterestrates.Unlessoffersofverylowrateswerecontinuallymadetonew‘marketentrants’,thehigh-pricedhousingmarketcouldnotbekeptlimpingalong.Recentlyakindofdesperationhasbeenslippingintothelanguageusedtodescribehousingprices:theyarejustabouttofall;arefalling;arerapidlyrising;orjustabouttoriseevenfurther.Thereisnostability.Nocertainty.Asanexample,hereisjustoneofthethousandsofearly2013reportsonthestateoftheUShousingmarket.It
![Page 559: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/559.jpg)
isworthreadingeachsentencetwicetotrytoworkoutwhatisactuallybeingsaidhere:
Single-familyhomepricesintheUnitedStatesslippedinNovemberfromamonthearlier,butwereup5.5%comparedwithayearago,accordingtotheS&P/Case-ShillerhousingpriceindexreleasedTuesday.Theannualincreasebuildsona
stringofgainsthatpointtoahousingmarketthatisonthemend.‘Housingisclearlyrecovering,’
DavidBlitzer,ChairmanoftheindexcommitteeatS&PDowJonesIndexes,saidinastatement.Pricesonanon-adjustedbasis
slipped0.1%fromOctober.Pricesfellinabouthalfofthetwentymetropolitanareascoveredbythesurvey…AseparatereportonTuesdaysaidconsumerconfidenceintheUnitedStatesdroppedinJanuarytoitslowestlevelinmorethana
year.66
![Page 560: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/560.jpg)
Describinghousingpricesas‘recovering’whiletheyarestillfallingshowshowfamiliarfinanciershavebecomewithpricesfalling.But,atthesametime,inotherpartsoftheUnitedStates,financierstalkedofarapidrecoverybeingunderwayinlate2013.InBritain,housepricesaredeeplydivided.InKingstonuponHullthepriceofanaveragethree-bedhomewasunder£70,000andfallingrapidlyearlyonin2013.Duringthatsameyear,inKensingtonandChelseainLondon,averagepricesofflatsroseabovethe£1millionbarrier,oftenforjusttwo-bedflats.Inoneyearpriceshadrisenby13.4%.In2008theaveragepricehadbeen£750,000.67ItisinLondonwherethehousingmarketisoverheatedtothepointofmeltdown,
![Page 561: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/561.jpg)
but,asifdefyingthephysics,itcontinuestogethotterandhotter.Asitdoesso,thereisnosenseofsuretyoverthecurrentdirectionoftravel.On16September2013somefiftynewsstoriesweregeneratedbyonepressreleaseissuedbythepropertyfirmRightmove.PartsofthatpressreleasereportedfallsincentralLondonprices;otherpartsreportedariseinoverallLondonprices;fallsinpricesawayfromLondon;andarisenationally.Nobodyreallyknewwhattothink.
![Page 562: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/562.jpg)
![Page 563: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/563.jpg)
ViewofSheffieldcitycentre,withStPaul’sTower,nowthecity’stallestbuilding,totheleft.Thetowerconsistsofprivateapartmentswithretailonthegroundfloor.OutsideofLondon,developmenthasbeenfarmoremodest,butthefutureisstillfarfromcertain,despitethelackofboom.Heretheproblemisnotimpossiblyhighprices,buttoofewbuyers.Thisisdespiteahugeinfluxofnewstudentstothisareaofthecityinthelastdecade.TheVictoriantownhall,builtinthelastdecadeoftheoldQueen’sreign,canbeseenjusttotheright.SheffieldHallamUniversity
inthecentre,alongwiththerestofhighereducationinthecity,nowbringsinmoremoney
totheSouthYorkshireregionthanallthecombinedmetaltrades.Newhousingreflectschangingtimesandabeliefthatpeoplewillcrowdintocitycentresagain,but,forthattohappen,thecentreswillhavetobecomemoreaffordableandremainaffordable;andyoung
peoplewillhavetokeeponcomingtothesecitiesinthenorth.Thecostofhousingcannotcontinue
toriseasincomesandbenefitsfall.
Tothinkabouthowhousingpricesmightalterinthenearfuture,takeastepbackandlookatthenational
![Page 564: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/564.jpg)
trendsinUKhousingpricesoverthecourseofthelastthirtyyears(inthegraphbelow).IntheUKthe1980sboomlastedfromSeptember1983toSeptember1989;thefallbottomedoutinDecember1992andpricesrosefromthenonwards,moreofteninlateryears,untilapeakwasreachedinNovember2002.Theperiodsincethenhasbeenvolatile,nowpossiblyenteringitsseconddecadeofvolatility.After2002,pricesstillroseinthe
wakeoffalls,butusuallybylessthantheyearbefore,althoughthedegreeofoscillationintheannualandmonthlyswingsisfarhigherthanbefore2002,giventhegrowingpricevolatility.Itakethefinaldottedlinefurtherdownthanothersmight,suggestingitcould,infuture,drop
![Page 565: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/565.jpg)
belowthemostrecent2008minimum.Idothisbecause,asin1989,Idonotthinkweareyetatthelowpointtowhichhousingpricescouldorshouldfall.If,in1989,youhadsaidthattherewouldnotbeasgreatafallagaininhouseprices,youwouldhavebeenwrong.Theyear2008sawamuchgreaterfall.Icouldbewrong.Pricesmaynot
dropagaininthenexttwodecades,atleastnotinLondon.BothyouandIhavenowayofknowingwhatthelong-,ormedium-,orevenshort-termtrendwillbe.Thatisthenatureofmarkets.Thehousingmarketmayhaveturnedin2008andnowbeonthewayup,butwithsomeverydramaticfitsandstarts.However,ifitis,someofthefundamentalrelationshipsbetweenaverageprices
![Page 566: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/566.jpg)
andaverageincomeswillhavechangedforever.Onepersonwhocloselyfollows
theUKratioofhousepricestoearningsisDavid(Danny)Blanchflower,nowProfessorofEconomicsatDartmouthCollegeintheUnitedStates.InSeptember2013hearguedthatthatratio,stillatahighof4.5to1,remainedwellaboveitslong-termtrend.68Predictinghousepricescanonlybeaveryinexactscience.ButIplacemostfaithinDavidBlanchflower’sassessmentthatthehousingpricetrendisstilldownwardsin2013.HeissupportedbytheIMF,whichsayshousingpricesintheUKremaintoohighandcouldeasilydropbyafurther10%–15%relativetoBritain’scurrentaveragesalaries,
![Page 567: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/567.jpg)
whichthemselvescontinuedtofallduring2013.69Thegraphbelowshowstheaveragechangeinhousingprice,nottheoverallprice,andincorporatestheBlanchflowerandIMFassessmentsindetermininghowtoplacethemostrecent(dashed)trendline.Becauseinmostyearsthebarsin
thegraphbelowhavebeenabovethezerohorizontalaxis,meaningthatpriceswererisingduringthosequartersofthoseyears,property-ownersinBritaintendonpapertobefarbetteroffthanthosewhodonotown.Ofcourse,thisvariesverymuchbetweendifferentareas.Insomepartsofthecountry(wherepriceshavenotrisenmuch)property-ownershavenotseensuchincreasesintheirwealth.Inother
![Page 568: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/568.jpg)
partsthegraphisjustamildechoofthehugeincreasestheyhaveexperiencedinthenominalvalueoftheirhomes,especiallyinthemostrecentyears.Whatmakesanarearichorpoor
canvary.Inthepast,beinglocatedinthesouth-westquadrantofacityoftenmadehousingmoreexpensive,astheprevailingwindbroughtcleanairmorefrequentlyintothoseneighbourhoods.Today,beinglocatednearatransporthubcanhavejustasgreatanimpactonanarea’saffluence.Anotherdeterminantoflocalvariationsinurbanhousingpricesisahouse’spositionrelativetopoorareas.Thefurtherawayitis,thehigheritsvaluetendstohavegrown.InmoreequalcountriessuchasFrance,JapanorSweden,where
![Page 569: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/569.jpg)
fewerpeopleareeitherverypoororveryrich,livingawayfromthepoorattractsalowerpricepremium.Housingpriceinflationtendstobelowertoo.Volatilitysuchasthatshownaboveisrarer.Analystswhodonotfindgrowingwealthpolarization(intheperiodfrom2000upto2006,justbeforethecrash)tobethemajorproblemconsidervolatilityasthekeyunusualaspectoftheUKhousingmarket.AsresearchersfromGlasgowUniversity’sDepartmentofUrbanStudiesconcludedinworkpublishedin2010,usingdatafrombeforeeventhemostrecentandmostvolatiletimes:‘Perhapsthemostimportantaspectofourfindings,however,isnotthetrend(orlackofit)inhousingwealthinequality,norits
![Page 570: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/570.jpg)
cyclicalnature,buttheenormousamplitudeofthecycle.’70
Figure11.Three-monthonthree-monthhousingpricechange,1983–2012,UK,andtrend
lines.
Inmoreunequalcountriestherearefewerareasofmixedhousingtenure:fewerpeoplerentnexttowhereothersown.EveninLondon,therichtrytoliveawayfromthepoor–thoughthatmightmeana
![Page 571: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/571.jpg)
distanceofonlytwostreetsaway,ratherthanthetwomilesthatarepossibleinanorthernEnglishcity.However,attheverydensestpointwithinLondon,wherepopulationismostcrowded,inequalitiesaremoreoftenfoundalongjustasinglestreet.ForinstanceinPimlico,themostdenselypopulatedpartofcentralLondon,thattwo-streetgeographicalgapcannotbemaintained,andstoriessuchastheonetoldimmediatelybelow(atthestartofthenextsection),oftherichlivingcheekbyjowlwiththepoor,aremorecommon.71Itreallycan’tbestressedenoughthatinmoreequitablerichcountriesthesocialgapbetweenrichandpoorisnarrower,notjustintermsofmoneybutalsoineducationalopportunities,inhealth
![Page 572: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/572.jpg)
statusandinsharedsocialspaceandrecreationaltastes.Theperceivedneedtoseparateoneselfgeographicallyfromanyonepoorerisfarless.Therearefarfewerpeoplewhoareveryrichtocomplainaboutpeoplewhoareverypoorlivingnextdoortothem,ofwhom,ofcourse,therearefewertoo.Britainisoneofthosecountries
where‘location’determineshousingpricemorethananyotherfactor.InBritain,thelocationofahouseawayfromthepoorandnear‘good’schoolshasrecentlygrowninimportance.Whenestimatedstatisticallytherelativeeffectsofthesefactorsarefoundtobegreatestinnorth-westEngland,buttheabsolutegapsaregreatestwithinLondon,where,in2012,research
![Page 573: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/573.jpg)
conducted(attaxpayers’expense)byLloydsTSBPrivateBankingfoundthatafifthoftopstateschoolswithinthecapitalappearedtocommandahousingpremiumofover£100,000.Thebank’sresearchersconcludedpropertywithinthepostaldistrictofHenriettaBarnettSchoolinnorthLondonhadthelargestpremium,of91%(£394,282),incomparisonwiththeaveragehousepriceinneighbouringareasinthatpartofLondon.72
![Page 574: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/574.jpg)
![Page 575: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/575.jpg)
OriginalGeorgianceilinglathscanbeseeninahomesetforrefurbishmentinNetherEdge,
Sheffield.Youhavenowayofknowingit,unlessyouknowSheffield,butNetherEdgeisanareawherepreciselocationisparticularlykeyindeterminingpropertyprices.Peoplewilltalk
aboutthedécorofhomes,thewonderful‘originalfeatures’oftheproperty,butwhereexactlyahouseislocatedwithinthissuburbofthecity,nearertoNickClegg’sconstituency,ornearertothecentralSheffieldend,willbewhatdeterminesthepriceyoumightpayortherentyouwillhavetopaytolivethere.Theolderuniversity(ofthetwoinSheffield)andthesteepRivelinValley
marktheotherboundariesofposhSheffieldmoreclearly.RecentlythesecondaryschoolnearestmuchofNetherEdge,wherethisceilingis,AbbeydaleGrange,closedbecausetoofew
childrenfromthisareawenttoitandsoithadentered‘specialmeasures’.Becausetheydidnotgo,itsreputationsuffered,butthereputationof
theneighbourhoodwasmaintained.MostchildreninNetherEdgegotohigher-rankingcomprehensiveschools,awayfromthecity
centre,furtherfromthepoor.Homesinthisareaarethenrefurbishedratherthandemolished.
Everythingisrelatedtoeverythingelse:schoolstohomes,homestopolitics,politicstoschools,
![Page 576: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/576.jpg)
but,asthegreatUSgeographerWaldoToblerput
![Page 577: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/577.jpg)
it,mostsimply,nearthingsaremorerelatedthanfar.
WhathappensinLondonismirroredinmicrocosmelsewhere.ThroughoutBritainthereisalocalschoolpremiumonthepriceofhousing.Thepremiumcanbenegative,ineffectadiscount,inthecatchmentareaofschoolsdeemedtobeverypoor.Itispositivewhenschoolsaredeemedverygood,andparticularlyinareaswithinwalkingdistanceofsomeofthemostexpensiveprivateday-schools–schoolsthatonly1%or2%ofallchildrenattend,andthatarealmostalwaysfoundinLondonandthesouth-east.Thuslocalschoolsalsomanagetoaffecttheinflationofpricesinthecapital.Itisnotjustthatthehighestpaidjobsaretheretoo.
![Page 578: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/578.jpg)
LONDON
Everycityhasitsrichandpoorareas,butLondoncancombineextremesofbothinthesamestreets.Whenpropertypricesarehighenough,onlytwogroupscanaffordtomovein:therich,andmigrantswhoarepreparedtocramseveralpeopleintoeachroom.InonehouseonthestreetwhereIusedtoliveinPimlico,migrantworkerssleptsixtoaroominbunkbeds.Intheotherwiseidenticalhousenextdoor,asinglefamilyrattledaboutinagorgeousmansion.
–NeilO’Brien,DirectorofPolicy
Exchange,201273
Whenitcomestohousing,thereisnowhereintheworldquitelikeLondon.Sure,thereareotherexpensivecities,butnoothercityinthedevelopedworldcontainssuchadeep–andgrowing–chasmbetweenrichandpoor,andsuchcomparativelyexpensivehousingfor
![Page 579: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/579.jpg)
bothgroups.TheextraordinarilyhighcostofallkindsofhousinginLondonrubssaltintothewoundsmadebyinequality.Eventhedirectorofaright-wingfree-marketthinktank(PolicyExchange)complains(asquoteddirectlyabove)ofnolongerbeingabletoliveinthecentreofthecitybecauseheisneitherrichenoughnorpoorenough.Othershaveacclimatizedtowhat
Londonhasbecome.TheyknowthereisthestrangeworldofZone1,wheremultimillionpricetagsarenowthenormforanythingwiththreeormorebedrooms.TheyknowofthehorrorsofshedsandovercrowdingininnereastLondon.ButmanyLondonersfindthattheseextremesmakewheretheylive–makeplaceslikeHaringey,orBrent,orEpping
![Page 580: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/580.jpg)
Forest–appearmorenormal.ManyLondonerssaythatpeopleappeartobeableto‘muddleon’atleastforthetimebeing.Buttoanoutsider,especiallytosomeonelookingtorentorbuyinLondonforthefirsttime,itdoesnotlooklikethat.Rightnowthereisgrowing
divisionwithinLondon,divisionthatisreflectedacrosstheUKmoregenerallybutlessacutely.ByFebruary2013itwasreportedthattheaveragepriceofallpropertyinthecapital,ofanydwellinganywhereinLondon,hadreached£398,000.Thatisafortune;and,bythatpoint,itwasmorethan6%higherthantheaveragethathadbeenreportedforFebruary2012.Remarkably,however,itwasafterthatpointwhentheacceleration
![Page 581: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/581.jpg)
reallysetin.Bytheearlyautumnof2013therisesfortheentiresouth-eastweresaidtobemorethan6%ayear.Somesuggestedthatthesehighpriceshad‘moretodowiththeallureofKensingtonandChelseaaddressessuchasEgertonCrescent–wheretheaverageis£8,136,000–thanthefortunesofBarkingandDagenham’.74However,pricesinWestminsterfellby7.4%inAugust2013.Initiallythatmini-slumpwasblamedonthesummerheatwave.75
OutsideofthecoreofZone1,pricescontinuedtorise,atleastthen.EveninthecheapesteastLondonboroughthecostofanaveragehomebyearly2013hadalreadyreached£210,944.Theentiresouth-eastEnglandaveragehadbythenclimbedto£211,092.
![Page 582: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/582.jpg)
Londonisnotthemostexpensivecityintheworldtolivein–thatisTokyo.But,asincomesaremoreequitablydistributedinTokyothantheyareintheUK,asthetransportsystemworkssowellthere,ascrimeissolow,andasmedianwagesarehigher,livinginTokyoislessstressful.Lessstresshappenswhenyouworrylessaboutcrime,aboutcompetingatworkinasystemthatrewardsageingandcollegialityovernakedambition,andwhenpeoplehavehigheraveragelevelsofmentalhealth.TokyoisthemostexpensivecitybecausetheJapanesepeopleremainamongthemostprosperous.ThereisverylittlepovertyinJapan,76andbecauseofthat,andbecausetherichtakesomuchlessinJapan,thereismuchgreaterchoice
![Page 583: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/583.jpg)
formostpeopleaboutwhere,withineachJapanesecity,theycanlive.Wherevertheylive,however,spaceisatapremium,asitisinanymegacity.Therearefifteencitiesinthe
worldthataremoreexpensivetoliveinthanLondon,but(otherthanTokyo)mostofthemaresmaller,allhavefewerpeoplelivinginpoverty,andallhavecheaperaccommodationneartheircentres,ifnotintheircentres.Notoneissurroundedbyanentireregionwheretheaveragehousepriceexceeds£200,000,andnotonehashousinginitscheapestenclavethatisasexpensiveasthehousinginNewhamorDagenham(twoofLondon’slowest-pricedboroughs).Londonisalsoveryoddinotherways.Ithasthegreatest
![Page 584: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/584.jpg)
concentration,andthelargestnumber,ofpeoplelivinginpovertywithinWesternEurope.Andthiscityinwhichsomanypoorpeopleliveisalsobecomingmoreexpensive,bothonitsowntermsandinrelationtootherplaceswithexpensivehousingandahighgeneralcostofliving.AllthisisalsooccurringatatimewhenmedianincomesintheUKarefalling.77
ItisthetopendoftheLondonmarketthatreceivesthemostattention,butthoseincreaseshaveaprofoundeffectonhousingpricesacrossthecapitalandacrossthesouth-eastofEngland.PricerisesinEgertonCrescentrippleouttoNewhamandDagenham.TypethatKensingtonstreetnameintothepropertysaleswebsiteZoopla,and
![Page 585: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/585.jpg)
thefirsthityougotinSeptember2013wasFlat1ofNos.26–7,whichsoldfor£610,000inMarch2002andwhichthewebsitenowestimatestobeworthover£1.5million.Recently,London’smostexpensivehousewassoldfor£300million,whilethemostexpensiveflatfetched£65million.78
Whensuchexcessesaretobefoundnearby,oronlyafewmilesaway,asking‘just’£0.2millionforamodestthree-bedhomeintheEastEndbeginstoappearreasonable.ThetopLondonpricemaywellbe
higherthannearlyathirdofabillionpounds,becausenotallsalesarerecordedthroughtheLandRegistry.Whenindividualsmasqueradeascompanies,theirpropertyisofficiallytransferredfromonecompanytoanother,ratherthansold.
![Page 586: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/586.jpg)
Clearlyitisnotacompanythatwishestoliveinaflat,butapersonorfamily;butifacompanyownsitandsomeonebuysthecompany,theflathasnotbeensold.Itmayappearthatthepointbeingmadehere–thatafewveryrichpeoplehidetheirpurchasesofpropertythroughcompanies–isapurelyacademiconeandcannothavethatmucheffectuntilsuchbehaviourbeginstotemptawiderrangeofpeople.Wearegettingclosertosuchextremes.Thepricesinthesouth-eastofthe
UKarealsobolsteredbyfactorsotherthanconvenienceoflocation.Forsomeoftheworld’srichestpeople,Londonhousingoftencomeswithanextraincentivetobuy.ItisalittlelikethoseshopsinthetouristareasoftheBritishcapitalthat
![Page 587: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/587.jpg)
advertise‘tax-freeshopping’forforeignnationals.TheLondonpropertymarketsellsitselfasabargaintothosewhoarenotBritish,butareintheverytopglobal-wealthbracket.ButLondonisfarfromabargainforpoorerimmigrants,whoareoftenfleecedofthemajorityoftheirincomestoliveintheworsthousinginthecapital.ToppricesinLondoncanriseso
highbecausetheycomeataspecialdiscounttopurchasersfromoutsideBritain.OverseassaleshavesoaredduetointerestfromAsia.Itisnotjustthetaxbreaks,butalsosterlingthatisattractive.In2013theNewYorkTimesexplainedtoitsworldwidereadershipthatthecurrentweaknessoftheBritishcurrencyhasonlyreinforcedpricerises,asthe
![Page 588: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/588.jpg)
poundslumpedduring2008,andby2013wasstillworthabout20%lessagainstboththeUSdollarandaseriesofotherAsiancurrencies,‘givingAsianpurchasersmoreleverage’.79Inaddition,withnon-domiciledstatus,youcanbuyinawaythatavoidsagreatdealoftaxonyourpropertyandonyourincome.Inhis2013autumnstatementtheChancellorproposedtoendthisloopholebymakingnon-residentownersofpropertyliablefortaxontheircapitalgainsmadeafterApril2015;buthedidnotsayhowheproposedtocollectthetaxfrompeoplewhomightnothaveanyaddressintheUKaftertheyhadsoldtheirsparehomeshere.80
Thereisaconcurrenteffectofthepoundbeinglowerthatalso
![Page 589: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/589.jpg)
influencesLondonandthesouth-east.Britishpeoplewhoownpropertyoverseasarefindingitcoststhemmoreandmoretomaintainit,totraveltoitandtoliveabroadwhentheyareinit.Overseasproperty-ownersarepredominatelybasedinLondonandthesouth.However,iftheirpensions,paidinsterling,donotsoonriseinvalue,manyfromtheUKlivinginSpainmaysoonhavetoreturn.TheywillneedhomestoreturntoandthenevenmorepropertyinSpainwillbeempty,whilemorepropertywillbeneededintheUK,especiallyinthesouthofEngland.Buildingformigrants,includingreturningmigrants,iseasiertojustifythanbuildingformoresecondhomeowners.ElsewhereinsouthernEurope,in
![Page 590: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/590.jpg)
Cyprus,inGreece(especiallyinCrete)andinMalta,therearemanyBritishpensionersnowfindingithardertogetbyontheirdevaluedsterlingpension.81On25June2013,whenthegovernmentcutthewinterfuelallowancefor100,000pensionerslivinginwarmeroverseascountriesonthegroundsthattheydidnotneedit,theymaynothaveenvisagedthatthismightcauseafewextrapensionerstothinkofreturningtotheUK,pensionerswhowouldbequitelikelytorentandperhapsqualifyforhousingbenefit.Attheverystartofthisbookgreat
storewasmadeofthefactthatthevalueofallresidentialpropertyinBritain,includingallthatwhichisbeingrented,isestimatedat£5.5trillion,butitwasnotthenpointed
![Page 591: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/591.jpg)
outthatnowalmostaquarterofallthismoneyistiedupinLondon,andthatmuchoftherestofthatnationalwealthishoused(literally)nottoofarfromLondon.Thegraphicbelowmakesthisclear.TheLondoneffectissogreatthatresidentialpropertyinthenearbycommutertownofReadingisworthmorethanallofthatinthemuchlargercityofNewcastle-upon-Tyne.TheDirectorofResearchatthe
companythatproducedthe£5.5trillionfigure,Hometrack,explains:‘Thehousingmarket’stotalvalueisonascalethatdwarfsthecommercialpropertymarketandistwicethesizeoftheFTSEAll-Shareequitymarket.Thisiswhyhousingissoimportanteconomicallyandasastoreofwealth.Withthevalueof
![Page 592: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/592.jpg)
outstandingmortgagedebtatjustover£1trillion,theanalysisshowsjusthowmuchequitythereisinthemarket.’82Thisimbalanceisonereasonwhythereissuchanobsessionwithkeepingthehousingmarketoverinflated.Some£4.5trillionofthewealthofpeopleinBritain,mostlythewealthofarichminority,reliesonpropertyvaluesstayinghigh,andespeciallyontheirstayinghighinLondon.
![Page 593: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/593.jpg)
Figure12.ThevalueofpropertyinBritainbyurbanarea,2012,totalequity(£billion).
InSeptember2013theRoyalInstituteofCharteredSurveyors(RICS)calledontheBankofEnglandandthegovernmenttoactifhousepriceinflationexceeded5%annuallytopreventanotherbubbleforming,perhapsthrough
![Page 594: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/594.jpg)
encouragingtherationingofmortgages.Thisparticularsuggestionwasgreetedwithoutragefromsomeofitsownmembers,businessleadersandTheTimesnewspaper,representingpeoplewhowishtoprofitmoreandmorefromtheincreasesinLondon,theareabeingtargetedbytheRICS.83
However,wheneventhisorganizationtriestoslowdownthemadness,youbegintosensethatsomethingisseriouslygoingamiss.Surveyorsdobetterthefasterthemarketmoves,whentherearemorehomesthatneedtobesurveyed;buttheyalsoknowthattheywilldoverybadlyifthebubblegrows,burstsandslumps.Someofthemoneythathascome
intoLondonfromoverseasbuyers
![Page 595: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/595.jpg)
hasbeenspreadaroundthesouth-eastofEngland(and,despitethefallsinthevalueofthepound,alsooverquitealargeareaofFrance),asolderownerssellup,moveoutandcashin.Oftenfewquestionsareaskedaboutwherethatoverseasmoneywasmade.AmanwhoprofitsbysettingupasweatshopinChinaorIndiamight,yearslater,wishtobuyhisdaughteraflatinKnightsbridge.Shedidnotreallymakethatmoneyandneitherdidhe.Itwasmadebythosewholabouredinthatsweatshop.However,ifworkersinIndiaandChinasecuregreaterrightsandaslightlylargershareofincomeinfuture,asworkersinEuropeandNorthAmericadidbeforethem,therewillbelessmoneyflowingintoLondon.The
![Page 596: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/596.jpg)
capital’stop-endestateagentsrarelyseemtopausetowonderwhetherthenumbersortastesoftheveryrichareasrobustastheythink.Seenasasafehaven,London
remainsafavouredlocationfortheworld’srichestpeople.Buthowsafeaninvestmentisthisformercapitalofanoldimperialempirethatnowfunctionsmorelikeanoffshoretaxhaven?Ifyouhadalargeamountofmoneytospend,whatwouldittaketomakeyouworryaboutbuyingasingleflatatahighlyelevatedpriceinaLondonstreet,whenspreadingitoutindiverseinvestmentsmightbethebetteroption?Whatconditionswouldhavetoprevail,whatstorieswouldyouhavetohear,beforeyouthoughttwiceaboutalltheseso-called‘nottobemissed’
![Page 597: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/597.jpg)
opportunitiestobuybecausepriceswereduetoriseevenfurther?Whatif,inlateautumn2013,
followingthenewsthatnon-residentswouldsoonbeliableforcapitalgainstax,theworld’ssuper-richweretolookmorecarefullyatwhatthetruevaluepersquaremetreofLondonpropertyactuallywasandthencompareitwithotherplaces?OrwhatiftheyweretolookatlivingconditionsnotthatfarawayfromthemostexpensiveplacesandwonderjustwhatLondonmaybebecoming,givenhowpeoplearecurrentlyhousedtheretoday?Dotheworld’ssuper-richreallyneedtolivenearwhereallthecentralLondonofficeworkersalsowanttocongregate,andnotthatfarawayfromveryabject
![Page 598: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/598.jpg)
poverty?Thereareotherplacestobuy.Housingconditionsinpoorerparts
ofthecapitalhaverecentlybeencomparedunfavourablywiththoseinHyderabadinIndiaincommentsmadetoinvestigativejournalistsexamininghowpeoplehavebeenlivinginthepoorerpartsofNewhaminLondoninthelasttwoyears.Oneexamplegivenwasthat,during2012,afamilyoffourwithababywasfoundinLondonillegallyrentingasingleroominanunlicensedhousecurrentlyinmultiple-familyoccupation.84Theconditionsinthesehomes–problemswiththesewage,rubbish,rats,bedbugs,cockroaches,butabovealltheacuteovercrowding–aresimilartotherookeries(slums)
![Page 599: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/599.jpg)
ofthecapitalthatweremostlydemolishedbetweenfiftyyearsandahundredyearsago.
![Page 600: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/600.jpg)
![Page 601: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/601.jpg)
ItmightlooklikeLondon,butitisnotLondon.Instead,thisimageshowsanewmixed-usecommercialandresidentialdevelopment
overlookingaformerindustrialareatothenorthofSheffieldcitycentre.ThisparticularstyleofLondonpropertydevelopmentisnowapedaroundtheworld,includingwithinBritain.It
wouldnotbehardtoimaginebanksofcomputerscreenssurroundingtheconcretepillarswithintheseopen-planoffices,werethisblocktobelocatedwithintheSquareMileandnotatwo-
hourtrainjourneyduenorthofit.Becauseofthatdistance,anddespitethesupposedlynear-
frictionlessspeedwithwhichinformationcanflow,thisentirebuildingcannowberentedforfarlessthanwhatafractionofasinglefloor
wouldcostintheheartoftheBritishcapital.But,despitethelowcommercialrent,thesefloors
remainempty.Volatilityincommercialpropertyprices,letsandoccupancyisevengreaterthanintheresidentialsector.Whenfirmsaredoingwell,theycanjustifymovingtoswankynewoffices,butwhentheyaredoingbadly,itisbettertosackspacethansackpeople.Farmorearethenaskedtoworkfromhomeformoreoftheworkingweek,ortobecomeself-employedandthenbecontractedbackin.Workingfromhomeimpactsonwhatspaceahomeneeds.Everythingis
![Page 602: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/602.jpg)
related.
TheLondonrentalmarketisnotoriouslyexpensive.Eachroominamultiple-occupancydwellinginLondoncanearnthelandlord£400amonth.Potentialtenantsmightfinditslightlycheapertorent(illegally)ashedinabackgarden,ataround£350amonth–althoughsuchanarrangementusuallyinvolvesnohotwater,barelyanyheatingandmattressesonthefloor.IfaroomisinapartofLondonthatisbothpoorandhardtogetto,itcanberentedfromaslittleas£240amonthinafour-room(twoup,twodown)terrace.Ifyouwishtoinvestigatethisworldyourself,simplyspendadaylookinginshopwindowsinpoorerbutquitecentralpartsof
![Page 603: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/603.jpg)
Londonatthelittlecardsadvertisingspacesinthecheapestofformerhomes.ItisnotjustininnerLondonwherethousandsofshedsarenowusedforhousing;thepracticehasspreadasfaroutasSlough.Boththemostexpensiveflatsin
Knightsbridgeandtheshedsatthebottomofthe‘housingladder’aremassivelyovervaluedasplacestosleep.NooneknowshowmanyshedsinLondonarecurrentlybeingletillegally.However,onedatacompanyclaimsithasmapped,inwhatitclaimsisauniquenewdatabase,allthosethatcouldbeusedforsleepingthroughoutthewholeofGreaterLondonandfurtherout.ThisdatabaseisavailableforpurchasefromtheGeoInformationGroup,whichsellsitselfasaleading
![Page 604: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/604.jpg)
supplierofgeospatialdataandservices.Thecompanyexplainedthatthereleaseofitsnew2013product,theUKMap®ShedsBaseMap,wastimedtocoincidewitharecentinitiativesetupbythegovernmenttotackletheproblemof‘BedsinSheds’.Quitewhatthatinitiativeisremainsunclear.However,itsuggestsitis‘offeringtheidealmappingsolutionforthosewhoneedtoaccuratelyidentifyandactonillegaldwellings’.85Wherethereisaprofittobemade,eveninstoppingothersmakingaprofit,nostoneisleftunturned,andnoshedneedbeoverlookedshouldyourlocalLondonboroughbuythissoftware.Thelandlordswhorentoutthe
shedssaythattheyarenotforcing
![Page 605: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/605.jpg)
anyonetotaketheiraccommodation.Theyarejustplacingtheshedsontheopenmarket.Whatthey’redoingisillegal,86buttheymightsimplyrefertothatas‘toomuchredtape’.Thisisoneoftheproblemswithhavingsuchanopenmarketinhousing.Ifitwerebettercontrolled,andifthepenaltyforhousingpeopleinshedswaspossibleimprisonment,Iverymuchsuspectlandlordswouldstarttobehavebetterandwould,forinstance,alsoensuretheyalwayspaidtheirtaxesonrentalincome.Whenlettingisillegal,notaxispaidonthatrentalincome.Encouragepeopletoprofitgreatlyandthen,forsome,‘bendingtherules’isjustaboutbeingmoreentrepreneurial.Anadequatenumberofinspectors
withadequatepowersareneeded.
![Page 606: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/606.jpg)
Otherwiselandlordswillnotjustletoutsheds,butwillbuildsubstantialillegaltwo-storeystructuresthewidthoftheirproperties’backgardensandrenttheseoutbytheroomtoseveralfamilies.Atpresentmostoutbuildingsarerentedouttosingleadultsorchildlesscouples,butinthedistrictofSlough,somewayoutsideofLondon,injustonesmallpartofthatdistrict,some211outbuildingswererecentlyfoundtohavebeenrentedout–andallbutoneillegally.Thelocalcouncilhaveestimatedthatupto3,000shedsmaybeoccupiedinthedistrictasawhole.Intheorythelandlordscouldbefined£200aday,butsofarhardlyanyhave.87Clearlytheyarenotafraid.Theselandlordsmaynotbethatrich,buttheyareapingthe
![Page 607: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/607.jpg)
attitudesofthosemuchricherthanthemselvesintryingtomakeaquickbuckoutofthosewhoarevulnerabletoexploitation.Theymayevenfeelthattheybothdeserveandneedthemoney,perhapstohelpthempaytheiroverinflatedmortgage.Whenpeoplearegivenafreepassongreed,thatgreedcantrickledown.Therich–whoareconcentratedin
London–oftenclaimthatitisonlybecauseofthemthatthepoorcanliveatall,havejobscreatedforthem,andreceivebenefitsmostlyfromtheirtaxesandcharityfromtheirlargesse.OneTimesjournalistrecentlycalculatedthat‘Londonpaysaquarterofallincometax,threetimesasmuchasScotlandandmorethanthenorth-east,thenorth-westandYorkshireandHumberside
![Page 608: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/608.jpg)
puttogether.AquarterofallcorporationtaxcomesfromLondon,morethantwiceasmuchasanyotherregion.AquarterofallbusinessratesareraisedinLondon,asisathirdofallstampduty.Whenalltaxreceiptsareaddedup,Londoncontributesafifthofthetotalandthesouth-eastprovidesthesameagain.Despitetheregularpoliticalpronouncementsthattheeconomywillhavetobe“rebalanced”,Londonisthriving.’88CommentatorsfromthenorthretortthatLondonisthrivingattheexpenseofpropertiesbeingemptyjustafewhours’trainridefromthecapital,property(andpeople)justasshinyandnew,andnearertoopengreenspaces,butnotlocatedquitesoneartheheartofthemoney.
![Page 609: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/609.jpg)
The(southern)Timesjournalist’sargumentcouldbewrittenanotherway,andinawaythatmighthelptomakethelogicalfallacyinhiscaseclearer.Itistruethattherichest1%ofpeoplepayoveraquarterofallincometax,anditisbecausemostofthemliveandworkinLondonthatLondondoestoo.Thiswillbeatleastthreetimesasmuchasthegroupjustbelowthem,thenext1%.Fromthis,doweconcludethattheveryrichestareveryworthy–areworththreetimesmorethanthesecond1%?Ordoweconcludethattheypaythemselvessomuch(andchargesuchhighrents)thatnotenoughremainsforotherstobepaidsufficientlyandforthoseotherstopayalittletaxintheirturn?Thissortofthinkinggivesrisetocoalition
![Page 610: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/610.jpg)
governmentthatactuallycelebratestakingpeopleoutoftaxbecausetheirincomesaresolowthattheycannotaffordtocontributetothecommongood.Thejournalist’sargumentis
scuttlednotsimplybyinequalitiesbetweenrichandpoor,butbyinequalitiesallupanddowntheincomeandhousingscales.Itisbecausethereissomuchinequalityattheapexthatmostpeopleinthetop10%intheUKdonotseethemselvesasrich.Ownathree-bedhouseinSloughandyouandyourfamilymightwellbeinthetoptenthofthecountrybyincome,shouldyoucollectivelybringin,say,£60,000ayear.Butthatmightnotquitecoveryourmortgagepayments.You,yourpartnerandyourgrown-upchild
![Page 611: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/611.jpg)
mightallbeworking.Youmaybeinthetop5%ofpeoplebywealth,giventherisingvalueofyourhome,butyoumaystillbestrugglingtogetbyeachmonth.Sowhatoptionsdoyouhave?Yourentouttheshed.Butwhatifweweretoevictall
thepeoplesleepinginalltheshedsinandaroundthecapital?Allthepeoplewhonowcanaffordtosleeponlyinsheds?Couldtheproblemsbesolvedbymakingthepoorestgoaway,byclearingouttheshedslikesomeLatinAmericangovernmentmightclearoutitsfavelas?What,ingeneral,willhappen,if
Londoncontinuesonitscurrenttrajectoryandeventually‘relocates’(forwhichread‘evict’)everyonelivinginnormalhousingwhoreliesonbenefitsandwhodoesnotpay
![Page 612: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/612.jpg)
tax,isthatthecity’snaturewillchange.IbelievethatLondonwillbecomesoullessandcruelasaresult.89Thedesperate(thosebelowtheradarandnotreceivingwelfarebenefits)willstillrentsheds;they’lljustneedtoensuretheyhavenoheateratallsotheinfra-redcamerascan’tspotthem.Whatisneededisacultural
changeawayfromgreed.Weneedareturntoatimewhenifyouwantedalodgeryouwouldputtheminyourthirdbedroom,notintheshed.Weneedanewfuturetoo,notjustthebestofthepast.Weneedfewerpeopleneedinglodgersandfewerpeopledesperatelywantingtolodgewithincommutingdistanceofthemostoverheatedquarteroftheeconomy.Thealternativeisa
![Page 613: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/613.jpg)
dystopiathatwouldquicklycometobeseenasnormal.WhatifLondonweretocontinue
toboomeconomicallyandtherestofthecountrycontinuetoslump?Withevenmorehigher-ratetaxpayers,LondonerscouldsoonbepayinghalfofallthetaxintheUK.SomeonejokedtomerecentlythattheymighthavetobuildanelectricfencearoundtheM25.PeopleinLondonwhowerenotamongtheveryrichestwouldfinditevenmoredifficulttoacquirehousingwithenoughspaceforchildren;therewouldbelessaccesstochildcare,soitwouldbehardertomaintaintwofull-timeincomes(thecarersthemselveswouldbepricedout).Whatitmeanstobea‘Londoner’wouldfundamentallychange.
![Page 614: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/614.jpg)
Thecoalitiongovernmentopposeslimitsbeingputonbankers’bonusesbytheEuropeanUniononthegroundsthatthismightleadtosomeoftherichestleavingLondon;theywantthepoortoleaveinstead.Theywantthosetheyseeas‘unproductive’,becausetheyarepaidsolittleforwhattheydo,tomakewayformoreoftherichestpeopleintheworld.Theywantthechildrenoftherichtobegivenmorespaceinthecity;andtheywantthechildrenofthepoortogo.Butrecentlybankers’bonuseshavefallen,so,again,wehavenocertaintyastowhatdirectionthetrajectoryofthecapitalanditssurrounds,andbyimplicationamajorityoftheUKhousingmarketbyvalue,istakingatanyparticular
![Page 615: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/615.jpg)
time.Butwedoknowthatiftheirbonusesriseagain,givenhowmanythousandsofhighlypaidbankersthereareinLondon,morejokeswillbemadeabouttheapparentneedforthatelectricfence.Weknowthatmoreareas,currentlyhomestothepoor,willbetakenoverbytherich.Butwecanalsohopethatthistrendiscomingtoanend.In2013Bloombergreportedthat
fewerthanhalfoftheluxuryhomesboughtinLondonduringallof2012werepurchasedwithcash.Thiswasarapidfall,downfromabouttwothirdsofallluxurypropertybeingpurchasedthatwayin2011.(Cashtransactionsarenotjustunder-the-radarmoney-launderingexercisesororganizedcrimepurchases;theyarehowtheveryrich,aswellas
![Page 616: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/616.jpg)
landlordsanddevelopers,oftenbuyproperty.)Thatfallinveryrichpeoplebuyingveryexpensivepropertywithwhatwas,ineffect,sparecashwasshowntobedirectlyattributabletothebanksreininginbonuses.90However,despitethisfall,in2012,£3billionofbankers’bonusmoneywasstillspentonhousinginLondonandthewidersouth-east.91
Thatisahugeannualinjectionofincomebeingturnedintowealth.Someofthebonusmoneyisusedtobuyhomesforotherstorent,andtenantswillsoonmakeupthemajorityofLondonersasaresultofsomanymorenowatthetopchoosingsorecentlytotrytheirhandatbeingalandlord,althoughoftenusingalettingagencytodoallthehands-onworkinvolved.92
![Page 617: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/617.jpg)
Whatmightbedonetocurbtheapparentworthofpropertyinthesouth-eastofEnglandrisinghigherandhigher,outofthereachofmostexceptthosewhowillthenchargeotherssky-highrent?Earlierchaptershavementionedintroducingrentcontrolsandbuildingmorehomesfornewarrivals.YoucannotjustbuildinthenorthandinWalesandScotlandandhopethatpeoplewillmovethere.YouneedtomovekeyactivitiesoutofLondon,jobsthatdonotneedtobeinLondon.Whycontinuetosqueezegovernmentandsomuchofthecivilserviceintothatcity,somanymajorhospitals,andsomanyuniversities?Muchwasmovedoutinthepast,albeittemporarily,duringwar-time,andtheBBChasrecentlyshownwhatispossibleby
![Page 618: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/618.jpg)
establishinglargepartsoftheiroperationsinSalford.Currentlythereisnovisionofan
alternativetogrowingsocialandspatialpolarizationintheUK.Toturnaroundthehousingcrisis,farmorethanjustafewhalf-bakedpoliciesareneeded,especiallythecoalitionpoliciesaimedatunderwritinglandlordsandpushingpoorerpeopleoutofthesouth-east.Illegalactionsbylandlordsthatdeprivepeopleoftheirhomesbyevictingthemwithtoolittlenotice,orhousingpeopleinshedsthatareunfittolivein,needtobecomeseriouscriminaloffences.Actionsbylandlordssuchastheimmoralcontinuouspushingoutoftenantstobringinnew,higher-payingreplacementscandamagerenters’
![Page 619: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/619.jpg)
mentalandphysicalhealth(onwhichmorebelow,inChapter7).Furthermore,sparebedroomsneednotbetaxedinsocialhousing,astheresimplyisnotenoughsmallerpropertytoaccommodatethosewhoneedit.Somewillendupinsheds.Justaswestillbelieve(Ihope)thatnooneshouldhavetosleepinashed,sotooweshouldhaveotherrealandrealizableaspirations.Thereisnogoodreasonwhywe
shouldnothavethelong-termaimofeveryfamilybeingabletoliveinahomewithaspareroomforaplayroom,orforastudy,orforvisitors.WealreadyhaveenoughbedroomsinBritainforthistobepossible(onwhichmoreinlaterchapters).Everysinglepersonshouldbeabletohaveatleastan
![Page 620: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/620.jpg)
apartmentoftheirown,andnotbeforcedtosharewithotherswhomtheydonotknow.RearrangingpeopletofitbetterintothestockwealreadyhavecannotbedonewellbyauthoritariandiktatsliketheBedroomTax;buteventheHomeBuildersFederationoftheUK,representingprivatehome-buildingfirms,recognizesthatpensionerslivinginlargepropertieswithmanyemptyroomsarecurrentlysittingon(andin)propertyworth£400billion.Movefamiliesintothoselargehomes,andthepensionersintotheflatstheyvacate,havingbroughtthequalityofthoseflatsuptoscratch(includinginsulationandsoundproofing),andbothhouseholdshavejustonesparebedroom,ratherthanonehavingmanyandtheother
![Page 621: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/621.jpg)
havingnosparespaceatall.InSeptember2013thethink-tankDemospublishedtheresultsofasurveythatfoundthat:‘Themajorityofolderpeopleinthree-,four-andfive-bedroomhomeswanttodownsize.’93
Ourproblemsinhousingaresogreatthatmanydifferentpoliciesareneededtohelpustofitbetterintowhatwehave;torenovatethestock;tobuildwhatextraweneed;andtofinancethechangesinawaythatdoesnotstokeupfear.Peopleneedmorerightstobeabletostayintheirhome:tobecometenantsiftheycannotpaythemortgage,butnottohavetomoveiftheyfallonhardtimes.Thataspirationmightcreatenewproblems,butalimitedversionoftherighttostayalreadyexistsand
![Page 622: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/622.jpg)
so,lateroninthisvolume,considerationisgiventolookingatwhatextendingthatrightmightimply,andhowitmighthavemanyothercurrentlyunforeseenbenefits.However,itmaytakeafurtherslumpbeforeaculturalchangecantakeplace–beforehousingcanbemadesolidagain,dependable,notaspeculationforacquiringwealth,butaplaceofcertaintytosleepin,andtosleepsafelyin.Askingforhousingthatwon’timpoverishyouthroughyourmonthlyrentormortgagecostsisnotaskingformuch;butwithoutafurtherslumpitmightbeaskingforthemoon.
![Page 623: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/623.jpg)
![Page 624: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/624.jpg)
6
Slump
Humanbeingshavenochoicebuttooccupyaplaceintheworld,andmoreoftenthannotdevelopstrongemotionaltiestothatplace,sobeingdisplacedbyexternalforces–havingthatplacetakenaway,giventosomeoneelse,orevenbulldozed–isamongthemostappallingofsocialinjustices.Displacementinvolvestheremovalofabasichumanneed(shelter)uponwhichpeopledependabsolutely–practically,socially,emotionallyandpsychologically.
–TomSlater,Geographer,Universityof
Edinburgh1
![Page 625: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/625.jpg)
WehavemorehousinginBritain–morehomesandmoreroomsinthosehomes–thanwehaveeverhadbefore.Thisisnotjustinabsoluteterms,butperfamily,perperson.Itisnotthatwehavebeen
buildingthatmanymorenewhomes.Wehavebeenbuildinglessthanhalfthenumberitisoftenclaimedthatweneed.2Whatwehavemainlybeenbuildingisnewroomsinoronexistinghomes.Wehavebeenopeningupatticsandinsertingskylightsandstairs.Wehavebeenputtingnewroomsontopofgaragesorbuildingentirenewwings.Wehavebeenextendinghomesbackwards,sideways,downwards,addinganensuite,asecondorthirdbathroomand,aboveallelse,addingmorebedrooms.Wehavebeendoing
![Page 626: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/626.jpg)
thispartlybecausewethoughtweneededtheroom,andpartlybecauseweweretoldthatwewouldeasilyrecoupthecostoftheseadditionsintherisingfuturevalueofourproperty–thoseofuswhoownedorwerebuying,thatis.Wemaywellhavebeenwrong
abouttherecoupingofthecostsofrecentextensions.Whenpeoplelookupthesupposedvalueoftheirproperty,theyassumethatiswhattheywillget,butonlythosewhohavesoldhaveactuallyrecouped.3
However,whatwehavedoneistoensurethatthereisenoughpropertyforallwhoneedit,becausewehavebeenquietlybuildingallthoseextensionsandloftconversions,andsoenlargingwhatwehave,evenif
![Page 627: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/627.jpg)
wehavenotbeenbuildingsomanyseparatenewdwellings.Inquietlyaddingontoexisting
property,wehavealsohelpedtostokeasysteminwhichpeopletryharderandhardertomovetowherethepropertyismostexpensive–wherethereistheleastspareproperty,butwheretherearethemostjobopportunities.However,wearenotavailingourselvesofeverysquaremetreofextraspaceweown,ofallthoseloftconversionsandbedroomsoverthegarage.Weareatthepointwebuildthem,butshortlyafterwards,whentheteenagerforwhomthebedroomwasbuiltturnseighteen,theroomisemptybecausetheteenagerisoff.HalfofallyoungwomeninEnglandnowgotouniversityeitheratageeighteenorat
![Page 628: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/628.jpg)
agenineteen.Somestayathomebutmanymoveout.Ifwithinourmeans,wehaveextendedourpropertiestofitthemaximumsizeofourfamily,butwhenthatsizedwindleswetendnottomoveon,partlybecauseoffspringkeepboomerangingbackwhentheycan’taffordahomeoftheirown,andpartlybecausethelongerwewait,themore,wethink,we’llmake.Wecouldshareoutthedwellings
wehavebetter,andshareoutpeopleamongregionsbetter.Pricesrisinghigherinthesouthandfallinginthenorthhavecoincidedwithworselivingconditionsinallpartsofthecountry:moreovercrowdinginthesouthandmoredestitutioninthenorth.Ifcurrenttrendscontinue,wemaywellstartdemolishingproperty
![Page 629: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/629.jpg)
againwheredemandislowest.Theperceived‘national’housingshortageis,infact,aregionalshortage,partofthegrowingnorth/southdivide.Everywherethereisvacanthousingthatneedstobeusedbetter.Butincertainareasthereisagrowthofemptyhousingstockthatispartiallydisguisedbyveryhighratesofunderoccupancy,ratesmadepossiblebyhowcheaphousingawayfromjobshasbecome.Or,toputitbetter,cheapasfaraspeoplewith‘good’jobsareconcerned.
![Page 630: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/630.jpg)
![Page 631: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/631.jpg)
Animagefrominsideacouncilflatthatisbeingrepaintedbythenewtenant.TheflatisinBatemoor,asuburbofSheffield.Three-bedex-councilhousesinBatemoorwereonthemarketfor£65,000in2013;other(non-ex-council)
three-bedterracesweregoingfor£75,000;two-bedsemisinthemoresalubriouscorners,
£85,000;andathree-beddetached,£100,000–allthisinanaveragepartofanaveragenorthern
city.Rentsherearemuchlowerthanthenationalaveragetoo,buthowthepropertyismaintainedreflectsthat.Ifyouwantsomethingdoing,oftenenoughitisbesttogetonanddoityourself.Yourlandlordmightchuckinthepaint,butunlessthedécorisreallybeyondthepale,theywillnotthrowinthepainterstoo.Similarly,ifyouaredismayedbythewayhousingingeneralis
allocatedatthewhimofothers,youneedtotakeactionyourself.Politicalparties,pressuregroupsandcampaigningorganizationscangiveyou
ideas,evenslogansandwebsites,butonlywhenpeoplehavedoneitthemselves,havetakenmore
control,hasbetterhousingbeenwon.Nopaternalisticpatroneverwillinglyhandsoverthekeys.Whenthingshavegotbetterinthepast,ithasbeenbecausetheyhavebeenmadebetter.Whenwetoleratewhatisbad,whatwegetis
bad.
![Page 632: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/632.jpg)
Inasocietythatisgrowingevermoreunequal,agoodjobhascometobesynonymouswithonethatpayswell.Thisispartlytheresultofhowwefinancehousing,butthewaywefinancehousing,inmanyareas,isresponsibleforthecurrenteconomicslump.ThereisalsoagreatriskofcurrenteventscausinganewslumpinfutureinthenewlyoverheatedmarketsinandaroundLondon.Thisisaconcernaboveandbeyondtheissueoftheextenttowhichtheworld’ssuper-richmightbepartlytoblamefordrivinguppropertypricesincentralLondon.Ultimatelythequestionbeing
askedhereiswhetherhousinginBritainisreallyworththepricewearepayingforit.Thisappliesbothtonewlybuilthousingandtoall
![Page 633: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/633.jpg)
existinghousing.Itisalsoworthaskingwhether,asawhole,somehousinghasbecomesoexpensivebecauseinotherplacesithasbecomesoverycheap–intheplaceswherepeopledonotwanttobe.Theproblemisthatwehavelittlechoiceinthematter.Ifwewanttobewherethejobsare,wehavetopaytheprice.Thatpriceisnotjustqualifiedinmonetaryterms.Italsoincludesqualityoflife,asincreasinglymoreandmorepeoplehavetoliveinaverysmallspaceofverylowquality.
SMALLROOMS
Britain’snew-buildhomesarethesmallestinWesternEuropeandmanyaretoosmallforfamilylife…
–RoyalInstituteofBritishArchitects,
20114
![Page 634: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/634.jpg)
TheprobleminaplacelikeLondon,youmightthink,isthelackofrooms,butyou’dbewrong.EveninLondonthereare,asthe2011censusrevealed,moreroomsthanpeople,manymoreroomsthanpeople.Infact,thoughyoumayfindithardtobelieve,therearesomanyroomsinLondonthattherearemoreroomsthataredesignatedasbedroomsthantherearepeoplelivinginthecity.Roomsinnew-builtpropertytendtobetoosmall,butroomsinolderpropertiesaregenerallylargeenough,andmostLondonpropertyisstillold.LuckilytheVictoriansbelievedthatlotsofairinourhomeswasgoodforus.Unfortunatelytheyalsobequeathedusfree-marketeconomictheory.However,asdiscussedabove,thefreemarket
![Page 635: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/635.jpg)
doesnotbalancesupplyanddemandwellwhenitcomestohousing;itusuallyincreasestheimbalancesthatalreadyexist.Notallroomsareequal.Itisnot
justthatsomearelargerthanothers;somedon’tevencountasroomsatall.In1911theUKcensusenumeratorswereinstructedto‘countthekitchenasaroom,butdonotcountscullery,landing,lobby,closet,bathroom,norwarehouse,office,shop’.5Acenturylaterthe2011censuswordingproposedaratherlessgenerousdefinition:‘Donotcountbathrooms,toilets,hallsorlandingsorroomsthatcanonlybeusedforstoragesuchascupboards.Countallotherrooms,forexamplekitchens,livingrooms,utilityrooms,bedrooms,studiesand
![Page 636: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/636.jpg)
conservatories.Iftworoomshavebeenconvertedintoonecountthemasoneroom.’Whatconstitutesaroommayhavechanged–but,thankstothedecennialcensuses,wearestillabletoputanumberonhowmanyroomsexist.PartofthereasonwhytheBritish
havesomeofthesmallestnewhousingbeingbuiltisthenationalobsessionwithrooms–inparticular,withacquiringathree-bedorfour-bedhouse.Inthepast,Britishhousingwassoovercrowdedthattheideaofahouseofyourownbecametheidyll,theidealtobeacquired.Todayroomsaresometimesmadesmallertoaccommodatetheprizedlittlestripofgardenaroundahome.6
Furthermore,becausetheBritishpricehousingbasedonthenumber
![Page 637: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/637.jpg)
ofrooms,ratherthanthetotalfloorspace,alittleextraprofitcanalwaysbemadebymakingroomsinanewpropertyjustafractionsmaller.Yetpeoplearegettingbothfatterandtaller,andmostofushavemuchmorestuff,atleastmuchmorethanourparentshad.Wearealsogettingbetteratlookingatthetotalfloor-spacefigureonthefloorplansweareconsideringandnotbeingdistractedbytheglossyphotographstakenwithspecialcameralensesthatcouldmaketheinsideofagoldfishtankappearpalatial.Whilethenumberofroomsinexistencehasbeenincreasinginrecentyears,theamountoffloorspaceandtotalhousingvolumehasnotbeenkeepingpace.
![Page 638: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/638.jpg)
The2011censusintheUKwasthefirsttocountbedrooms;previouscensusesdidnotmakeseparatebedroomcounts.Bedroomsweredefinedasanyroomintendedforuseasabedroomwhenthepropertywasbuilt,whateveritscurrentuse,andanyroomthathadbeenpermanentlyconvertedforuseasabedroom,includinganyroomconstitutingabedsit.Ahousewithaplayroomandastudycouldeasilybecomeahousewithtwomorebedrooms,shouldtheneedarise,buttheyarenotcountedasbedroomsinthecensus.Neverthelessitisinstructivetolookat,howmanyroomsweusetodayasbedroomsinBritain.
![Page 639: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/639.jpg)
Figure13.RoomsperpersoninhousinginBritain:censuscountturnedintoaratio,1911–
2011.
The2011censustellsusthattherearesome66millionbedroomsinEnglandandWalesforaround55
![Page 640: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/640.jpg)
millionpeople.7Justover21millionpeopleinEnglandandWalesaremarriedorinacivilpartnership,andpresumablyoftenshareabedroom.So,evenifnooneelsewassharingabedroom,eveniftherewerenobunk-bedsandnocohabitingcouples,ofthese66millionbedrooms,atleastathird(22million)areemptyonanygivennight.Thisestimateofemptyroomsofcoursedoesn’ttakeintoaccountthoseroomsthatcouldbebedrooms,butthatarenotdefinedassuchbecausetheyareputtootheruses.Thevastmajorityoftheseemptybedroomsarefoundintheprivatesector,mostlyinhomesownedoutright,orinpropertyonwhichpeoplearecurrentlypayinga
![Page 641: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/641.jpg)
mortgagethathasnearlybeenredeemed.Thecensusallowsustoknowhow
manybedroomsareemptyineachsmallarea,withineachtenuregroup.Forexampleinowned-outrightpropertyinBatemoor,Sheffield,wecouldfindouthowmanysparebedroomsthereareandcomparethosewithhowmanysparebedroomsthereareincouncilhouses.But,forallthecensus’sdetail,itisthesimplesttruthsonhousingthatarethemostimportant.Notably,thenearerhousingallocationgetstoapuremarket,thelessefficientlyroomsareallocatedamongfamiliesandthehouseholdstheyconstitute.In2011,inWales,theaverage
numberofroomsperhouseholdrose
![Page 642: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/642.jpg)
to5.7;andthenumberofbedrooms,countedforthefirsttime,wasfoundtobe2.8.Thecensuscounted,forthe3millionpeopleinWales,some7.4millionroomsand3.5millionbedrooms–or2.5roomsperpersonand1.2bedroomseach.IfnoonesharedabedroominWales,thatstillleftatleasthalfamillionspare;8infact,giventhatsomanycouplesdosleeptogetherinthesamebed,letalonebedroom,atnight,thenumberofspareemptyWelshbedroomsisprobablysignificantlyhigher.InEnglandtheaverageswereonlyalittlelower,at5.4roomsand2.7bedroomsperhousehold.Thattranslatedintosome2.4roomsperpersonbasedonarecordedpopulationof52millionhouseholdresidentsinEnglandhaving(if
![Page 643: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/643.jpg)
evenlyspread)1.2bedroomseach,withover11millionsparebedroomsifnoonesharedabedroomandprobably,inreality,significantlymorespareatanyonetime.InEngland,in2011,therewere126millionrooms,ofwhich63millionwerebedroomsforapopulationof52millionresidents.9
EveninLondon–justinresidentialhousing,wheretheaveragehouseholdhadaccessto4.7roomsand2.5bedrooms–therewere1.9roomsperpersonand1.01bedroomseach,whichistosaysome92,000morebedroomsthanpeople.Allthesefiguresarepubliclyavailablefromtheonlinecensusrecords,foreverytown,city,districtandvillageinthecountry.Thenumberofroomsandbedroomsper
![Page 644: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/644.jpg)
personinBritainhasnotjustbeenrising,butthatrise–asthegraphaboveshows–hasrecentlyaccelerated.SowhydotheBritishhaveahousingcrisis?WhyarerentsandpricesskyrocketinginLondon?Whatisgoingon?Theansweristhat,sincethe
censusof1981,thedistributionofbothhousingspaceandroomshasbeenbecomingprogressivelymoreunequal.10Sincethatdate,ahigherpercentageoftheextraroomsinhousesandflatsinBritainhasbeenannexedbyfamiliesorindividualswhoalreadyhadthemostextraroomstobeginwith.Afamilywiththreeorfourbedroomsappearedtobemorelikelytoaddanextraroomtotheirpropertythandidafamilyinasmallerhome.11Whatismore,
![Page 645: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/645.jpg)
smallerhouseholdsweremovingintolargerproperties;andhouseholdsthatbecamesmalleraftertheirchildrenflewthenestweremorelikelytostayputinthoseproperties.ProfessorRebeccaTunstallhas
donemoreworkonthegrowingmismatchbetweenpeopleandrooms,andtherisinginequalitiesinhousingthatresult,thananyotherhousingexpert.HeranalysisshowsthatthelastincreaseintheunequaldistributionofroomsinBritainoccurredalmostacenturyago,betweenthecensusesof1911and1921inBritain.Atthatpointthebest-offtenthofhouseholdshadaccesstofourtimesasmanyroomsperperson,incomparisonwiththeworst-offtenth.After1921thisinequalityfellconstantlyoverthe
![Page 646: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/646.jpg)
nextsixtyyears,untilthecensusof1981,whichrecordedthegreatest-everlevelofhousingequality.Then,thebest-offtenthstillhadaccesstothreetimesasmanyroomseach,incomparisonwiththeworst-offtenth,buthousinghadneverbeenasequallydistributedsincecensusesfirstrecordednumbersofroomsaswellaspeople.ProfessorTunstallhasgone
further,suggestingacauseforthetrendshehasrevealed.Shenotedthatthedistributionofroomscorrespondedverycloselywiththefallandriseinincomeinequalities.AstheeconomicgapsbetweenthepoorestandrichestfamiliesinBritainnarrowedfrom1921tojustbeforethe1981census,familiesinBritainwereabletohouse
![Page 647: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/647.jpg)
themselvesmoreandmoreequitablywitheachdecadethatpassed.Itwasnotjustthatmorehouseswerebuilt.Thetrendoccurredevenasseveralwavesofimmigrationresultedinmanypoorerfamiliesturningupatthebottomendofthehousingspectrum.Whathappenedwasthatthenewhousingthatwasbuiltwassharedoutbetterineachsucceedingdecadeuntil1981.Yearafteryearwebecamebetterhoused–butthen,intheearly1980s,everythingchanged.Atthatpoint,somethingaltered
abouthowmoneywassharedoutinBritainand,fromthenuntilnow,wehavebecomeanincreasinglyunequalsociety.Therewerehousing-specificfactors,suchasthe1980‘right-to-buy’schemethatallowedformerlymoreefficientlyusedcouncil
![Page 648: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/648.jpg)
housingtobesoldatgreatlydiscountedpricestocounciltenants.Beforeprivatization,ifafamilyleftthehouseitusuallybecamehometothenextnot-too-well-off(andnotthatsmall)family.However,afterprivatization,thenewownersofanex-councilhousetendedtounderoccupyortoreselltoevensmallerhouseholds.Thegentrificationofformercouncilhousinghasbeenwidelyreportedandispartlyresponsibleforthecurrentshortageofaccessiblehousingtomanyfamilies.
![Page 649: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/649.jpg)
![Page 650: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/650.jpg)
ThisimageisofaformerplaygroundattheParkHillEstateandshowsthepartofthe
buildingyettoberedeveloped.TheParkHillFlatsappearintheopeningscenesofthefilmTheFullMonty.TheyriseaboveSheffieldCitytrainstationandarenowGradeIIlisted.Mostareempty,awaitingredevelopment.Thewalkwaysbetweentheflatswerebuiltwideenoughforamilkfloattobedrivenalongthem,butnowtheroomsareviewedastoosmall.Partofthe
redevelopmentconsistsofbuildingoutintothatwalkway,tomaketheroomsjustalittlelarger.Butthenthereisstoragespacetothinkof.Theliftsmaystillbelargeenoughtotakeamilkfloat
uptothetopfloor,butwheredoyoustorewhateveryouliftuptoyoursmallcastleinthesky?Theseflatswerebuiltforfamilies.Today
theenlargedversionofthemisbeingmarketedtosinglepeopleandyoungcouples.Whatwethinkofasadecentamountofspaceincreasesover
time.However,itcouldcometodecreasetoo,forinstance,iftheseflatswerefoundintheheartof
London,andnotinSheffield.
However,theintroductionof‘right-to-buy’cannotbesaidtobethetriggerfortheincreasing
![Page 651: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/651.jpg)
inefficiencyinouruseofhousinginBritain;ProfessorTunstallmeasuredonlyagradualincreasebetween1981and1991.Theincreasewasfastesttwentyyearslater,between2001and2011,whentherewerethefewestspaciouscouncilhomesremainingtobeprivatized.Itwasnotthehousingpolicythatwasatfault,butratherthenewincomedistributionthathadbeencreated.Incomeinequalitiesrosequicklyafter1979,reducingflexibility,andrisingwealthinequalitiesfollowedthatupwardtrendaroundadecadelater,growingfromaround1989.Wealth-inequalitytrendsalwayslagbehindincometrends.12
Thetablebelowshowsthepercentageshareofthetotalsumofmoneyreceivedannuallybythe
![Page 652: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/652.jpg)
richestelementsofsocietyintheUK:thevery,very,veryrichest(0.01%);thevery,veryrichest(0.1%);theveryrichest(1%);andtherichest(10%)duringthecourseofthelastcentury.13IfyouwantasingleunderlyingexplanationofwhyBritainnowhasahousingcrisis,youneedlooknofurtherthanthistable.Ifincomeweretobeevenlydistributedamongthepopulationunderasituationofcompleteequality,0.01%ofthepopulationwouldalwaysgetonly0.01%oftheincome.Asitis,by2009,thatbest-offfractionofthepopulationwasreceiving122timesthatamount,ahugeproportionandonethattheylastexceededoverseventyyearsago.Whatiskeyishowthe
percentagesofincomeaccruingto
![Page 653: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/653.jpg)
thepeopleintheserichestpercentilesfallovertime,until1981,andthenriseagain.Thattrendingrowingequalitybetween1921and1981followsandperhapshelpedtoinfluencemanyothersimilarlytimedtrends.Forexample,itwaswhenwebecamemostequalinincome–inthenowmuchmaligned1970s–thatwebegantocaremostforthehomeless;anditisinthepresent-day,whenwehaveagainbecomemuchmoreunequalinincome,thatweagainfindhomelessnessrising.
%ofall
0.01% 0.10% 1% 10%
1911 4.19 11.1 24.4 47.0
1921 2.90 8.1 20.3 42.0
1931 2.44 7.2 18.3 38.0
![Page 654: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/654.jpg)
1941 1.57 5.0 13.1 35.0
1951 0.85 3.2 10.9 33.0
1961 0.60 2.4 8.6 30.0
1971 0.40 1.7 7.0 29.0
1981 0.36 1.5 6.7 31.0
1991 0.73 3.1 10.3 38.0
2001 1.08 4.5 12.7 39.0
2009 1.22 5.1 13.9 40.0
Latein2013ProfessorTunstallupdatedherfigures:sheincorporated2011censusresultsforthefirsttime.Whatshefoundalmostperfectlymirroredtheriseinincomeinequalityshowninthetableofincomeinequalitiesabove.In1981thebest-offtenthofhouseholdshad3timesasmanyroomsintheirhomes,incomparisonwiththe
![Page 655: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/655.jpg)
worst-offtenth,risingtoabout3.7timesasmanyby2001.By2011thathousing-inequalityratiohadrisen,atamorerapidratethaneverbefore,tomorethan5timesasmanyroomsperpersoninthehomeofeachhousing-richperson,incomparisonwiththeworst-offtenth.Thiswasnowahigherratioofhousinginequalitythananythathadbeenmeasuredatanypointsinceatleast1901.14
WhathadNewLabourdonetoacceleratehousinginequalitysogreatlybetween2001and2011,beforethecurrentcoalitiongovernmenthadhadachancetoincreaseitevenfurther?Itcouldhavebeenthatthetrajectorywasalreadyinplaceandthegrowinginequalitywasnotsimplythefaultof
![Page 656: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/656.jpg)
thatgovernment,butNewLabourdidlittletoslowitsgrowth.Twoissuesshouldnowbelooked
ataspossiblymoreimportantthanwasfirstthought.First,theintroductionoftheLocalHousingAllowancehasmeantthathousingbenefitfrom2009onwardswasnotpaidonthefullrentifanybedroomsweredeemedspareforaprivatesectorrentingfamily.15Sothiswas,ineffect,aprivaterenter’sBedroomTax.Familiesinprivatelyrentedaccommodation,therefore,didnotmovetoevenslightlylargeraccommodation,evenifthataccommodationwascheaperoronofferatthesamerent,becausetheirbenefitswouldbedockediftheydid.Secondly,itisworthconsidering
theimpactofthevastnumberof
![Page 657: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/657.jpg)
one-andtwo-bedurbanflatsthatwerebuiltbydevelopersduringthisperiod.Therewasprobablyneverreallythedemandforallofthem,giventheirsmallsize,butfamilieswhoreallywantedorneededathree-bedplacewerebuyingorrentingthesesmallerflats,asthatwasalltheycouldaffordontheprivaterentalmarket.Nowthatwehaveseentherisinginequalityfigures,wehavesomeideaofhowmuchofaneffectthismighthavehad.16Theflatswereoriginallyaimedataffluentindividuals,orespeciallyaffluentstudents,butwerenotalleasilyfilled.The2011censusresultssuggestthattheyoftencametobefilledbysqueezinginpoorerfamilies.
![Page 658: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/658.jpg)
Itis,ultimately,the2011censusthatshowsusthatwecannotbuildourwayoutofthedisasterofourcurrenthousingsystem.Wefirsthavetodealwithgrowinginequality,withhowtobettershareoutandlookafterwhatwehavealreadygot.
![Page 659: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/659.jpg)
![Page 660: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/660.jpg)
AterracedhouseduringrefurbishmentheldunderprivateownershipinNetherEdge,
Sheffield.Housingatmanylevelsissimple.Youneedrooms:theyneedtobeinsulated.Youneedlight:itisbetterifthewindowisdouble-glazed.Youneedheating:radiatorsarenownearly
ubiquitous,butthereisawidevarietyofwaysinwhichthewaterinthemcanbeheated.Weusedtocounthowmanyhomeslackedhotrunningwater,oraninsidetoilet,orhadnocentralheating,butwehavenowgotmostofthose
necessitiesinalmostallofourhomes.Whatwemostoftenlacktodayisspace,butonlybecauseithasbecomenormaltohavealittlemorespacethaninthepast.Younoticethenoisefromnextdoormoretoo.Inmanywayswehaveneverbeenbetterhousedthantoday.Wehaveneverhadbetteraccesstotoiletsandthemeanstowash
withinourhomes,notjustourselvesbutalsoourclothes.Wehaveneverhadbetter-heatedhomes,althoughmoreofusarefindingithardertopaytoheatthem.Wehaveneverhadaswellinsulatedandroofedhomes,neverhadaslittledampaswehavetoday,norasmuchelectriclight;andyetwehavealsoneverhadasmuchtovalidlycomplainabouthowexpensivelywearehousedaswehave
today.
![Page 661: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/661.jpg)
HOUSINGFINANCE
PropertytaxeshavebecometheUK’slatestbattlegroundoverwhoshouldpay–andhowmuch–asthecountryfacesarecordbudgetdeficitandthegovernment’sausterityprogrammeisforcingcutsinsocialprogramssuchasdisabilitybenefitsandaidtofamilieswithchildren.InLondoninparticular,whereaffluentforeignbuyershavekepthomepricesrisingeveninthefaceofthecountry’sfirstdouble-diprecessionsincethe1970s,limitsoncounciltaxeshaveleftmanylower-andmiddle-incomerentersandhomeownerspayingalmostasmuchasthewealthy,andsometimesmore.
–BloombergNews,25October,201217
ThenewsprogrammeonBloomberg,theUSbusinessTVchannelbegunbythemanwhobecameNewYorkMayor,MichaelR.Bloomberg,reportedwithshockthateventheSultanofBruneihadappliedfora
![Page 662: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/662.jpg)
10%discountonhiscounciltaxandsosavesabout£200ayearbecausethehomeheownsinLondon,on‘billionaires’row,ishissecondorthird(orthirty-third)home.Oftentheveryrichobjecttotaxesinprinciple,andobjectsostronglythattheywillapplytobeletoffanamountthattheywouldnevernotice.Perhapsitisjustsoitcanbenoticedthattheyhavedonethis?Perhapstheythinktheypaytoomuchtaxoverall?Housingandtaxationhavealong
andvexedhistory.Therearegroups,liketheUSTeaParty,whichbelievewithsemi-religiousfervourthatpropertyisinsomewaysacredandtaxingitisasin.18TheUK’scurrentsystemoflocaltaxation,thecounciltax,wasintroducedtwodecadesago,in1993,afterawidespreadseriesof
![Page 663: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/663.jpg)
riotsagainstitspredecessor,thePollTax,whichwasafixedamounttobepaidbyeveryadult.Thecounciltaxislargelybasedonproperty,notpeople:thegreaterthevalueofyourhouse,themoreyoupay,butonlyuptoamaximumlimit.Ifyourhouseisveryvaluable,then–howevergreatthevalue–youpaynothingabovethecap,aspecialconcessiontotheveryrich.Thecounciltaxonaproperty
worth£1millionor£10millionisidentical.Furthermore,thetaxonapropertyworth£320,000whenitwasvaluedin1991isnotfourtimesgreaterthanthetaxonan£80,000property;butisonlytwiceasmuch.Youpayproportionatelymorecounciltaxtheloweryourtaxband.Itissimplyanunfairtax.
![Page 664: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/664.jpg)
Proportionatelythecounciltaxisahigherproportionofyourwealthperyearthelesswealththatyouhave.Recentlychangeshavebeenmade
totheUKcounciltaxtomakeitevenmoredisproportional,thustakingevenmorefromtheverypoor.Thesechangeshavebeendubbedthe‘EricPickles’sPollTax’,aftertheMinisterforCommunitiesandLocalGovernment,whointroducedthem.Beforethechangeswereintroduced,verylow-paidworkerswereexemptfrompayinganycounciltaxbecausethiswasasumtheysimplycouldnotaffordtopay.But,asaresultofEricPicklesmakingthatrebatediscretionarysinceApril2013,localcouncils,undergovernmentpressurenottoraiseanyoneelse’scounciltaxbill,cannowchargesomeofthe
![Page 665: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/665.jpg)
pooresthouseholdsinEngland,thoughpoorerpensionersremainexempt.TheschemeisexpectedtosavetheTreasury£500millionayear,andabouttwomillionlow-incomefamilieswillbeaffected.19
ThelegalsituationisgraduallybecominglikeareturntothePoorLaws,withlocalworthieslisteningtoyourcaseanddecidingyourfateatawhim.Inlateautumn2012areporton
thesecounciltaxincreasesforthepoorest,carriedoutfortheConservativeLondonboroughcouncilthatcontrolstheCityofWestminster,explainedthat‘Thesizeoftheseamountsinrespectofcounciltaxwouldinmanycasesbeuneconomictorecover,withthecostsofcollection,includinglegal
![Page 666: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/666.jpg)
recoverycostswhichfalltothecouncilbeinghigherthanthebill,andwouldinalllikelihoodhavetobewrittenoffwhenthedebtisuncollectible.’20Inotherwords,localcouncillorsinPickles’sownpartybelievethatthecurrentsituationhasbeenmadeworsebythearrangementsthatheintroduced.ThisriseinbillswillbepiledontopofthenewBedroomTaxdiscussedearlier.Atexactlythesametimethatthe
Britishgovernmentwastryingtoforcepeopleinsocialhousingtomoveiftheyhadoneormore‘spare’bedrooms,italsobegantodoallitcouldtohelpthewealthyownhousingwithasmanysparebedroomsaspossible.InFebruary2013thegovernmentannounced
![Page 667: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/667.jpg)
planstolimitthecostsoflong-termpublicorprivatecareinoldageto£75,000,inordertoprotectwealthyindividuals’wealth,mostlytheirhousingwealth.Thestatewillpayfortheircarecostsinaresidentialhome,andtheirpropertycanremainemptyatnocosttotheindividual–includingexemptionfromcounciltax–untiltheydie,providedthattheycanstillpaytheaccommodationcostsofaround£10,000ayear.The£75,000spendingcapwas
proposedasanimprovementonthepresentsituation,wherebyyoudon’thavetosellyourhomeifarelativeoversixty(orunderifdisabled),oryourspouseorpartner,stilllivesinyourhome.Thenewsystemalsoincludesahome-carepackage,butonlyifyourneedsareclassedas
![Page 668: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/668.jpg)
severeorsubstantial.21Thepotentialfinancialbenefitsoftheproposedchangesarerevealing.If,forexample,yourassets,afterpayingallaccommodationcosts,are£100,000,itispossiblethatcarecostswilltake75%ofthat,butifyouareworth£200,000theywilltakeonly37.5%ofthetotal–andprogressivelylessthemoreyouhave.Youmaybeabletoavoidsomeofthesecostsaltogetherbytakingoutinsurancewithaprivatecompany.Thepushforthiscomes,therefore,fromownersofmoreexpensiveproperty,fromtheprivatecompaniesthatwillprofitfromprovidingtheinsurance,andfromtheprivatecompaniesthatwillprofitfromprovidingthecare.Privatecompaniesspecializingin
risktendtobeownedbyvery
![Page 669: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/669.jpg)
wealthyindividualswhoaimtoprofitfromourignoranceaboutwhatforusarepossiblyone-offevents,suchasbeingtooilltocarryonlivingasweare.Theamountyoumightloseisfixedbygovernmenttomakeitpossibleforinsurancecompaniestoofferattractive-lookingpoliciesthatareasafebetforthem,becausetheyknowtherealrisksinvolved.Essentiallythesearepoliciesthatlookreasonabletomanyverylow-riskpeople.Ifyourpoliticsareontheleftyoumightcallthisascam;ontherightandyoucouldsayitallowed‘entrepreneurialzeal’.Buthopefullyyoucanseethatthesituationisbothcomplexandconfusing,andhenceripeforprofit.Themixingupofhousingwith
insuranceandinheritance,coupled
![Page 670: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/670.jpg)
withrisingincomeinequality,hasbecomesociallytoxic.Peopleholdontohousingtheydonotneedtoliveinbecausetheywanttoretainassetstohandontotheirchildreninaworldthatisclearlybecomingmoreprecarious–aworldinwhichitlooksmoreandmoreasifyouneedtolookoutjustforyourselfandforthoseyoudirectlycareabout,ultimatelyattheexpenseofothers.Itwouldbebetteriffairproperty
taxeswerepaidbytheliving,beforeinheritancetaxkicksinatdeath,sothatnotsomuchwealthishoarded,butoftenthelivingworkhardtoavoidtax.Someofthelivingworksohard,andaresoopposedtosharingwhattheyseeastheirpersonalwealth,thattheywillbehaveinwaysthatarecriminal.
![Page 671: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/671.jpg)
Manyotherwiselaw-abidingfolkwillbepreparedtocommitfraudtotrytoavoidtaxes,especiallyoninheritedproperty.
Atthelowerendofthespectrumofpropertyandinheritancefraudsittheborrowerswhoarefoundnottoactuallyexist,oratleastnottoexistasdescribedtothelender.Belowthisarenumeroussmallerfrauds,anditisthesethatthepresstendstoconcentrateon,suchashousingbenefitscams.Attheverylowestlevelofhousingfraudissomeonebeggingformoneyforabedforthenightorjustforacupoftea,onlytousethemoneytheyaregiventobuyacanofbeer.However,ifIwereonthestreets,Iwouldaskformoneyfor‘acupoftea’too,butI’dlookfor
![Page 672: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/672.jpg)
somethingalittlestrongertobuywiththatmoneytohelpmeforgetmysituation.Higherupthespectrumis
claiminghousingbenefitonyourprivatelyrentedflatwhenyourrealincomeishigherthandeclared.Abovethatisillegallysublettingyourcouncilhome.Abovethatcomesavoidingcapitalgainstax,say,switchingtheownershipofapropertywitharelative.Abovethatcomesusingcompaniesandnon-domstatustoavoidtax.Attheveryhighestendofthehousing-fraudspectrumaremultibillion-dollarbusinessesthatmakeverysmalladjustmentstoratesthatinfluencetrillionsofpounds’worthofmortgages.
![Page 673: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/673.jpg)
Bysummer2012ithadbecomeevidentthatthetopbanksthemselveswereillegallymanipulatingthereportedaverageinter-banklendingrate,orLibor,andthatatleasttransactionsworth$500trillionhadbeenadverselyaffectedaccordingtotheBritishregulators.22ThisfraudwascommittedbybankersbasedinLondon.Whattheyhavedonemaynothavebeenstrictlyhousingfraud,buttheratestheywereillegallyinfluencingaffectedmoneyprincipallyinvestedinhousing.
![Page 674: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/674.jpg)
![Page 675: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/675.jpg)
AformerlyhomelessgirltakesdownthephonenumberofhernewkeyworkerinSheffield.Werarelyconnectthegrowingnumberofyoung
peoplelivingonBritain’sstreets,orthosebeinghousedinhostelsandlivinginsquats,with
currenteconomicandfinancepolicy.Wedon’tseetheconnectionswithanincreaseinthe
numberofelderlypeopletryingashardastheycantohangoninthere,livingintheoldfamilyproperty,rattlingaroundinitandnotgoingintoacarehomeorjustintoasmallerflat,sothattheycanmaximizetheinheritancefortheirchildren.However,astheyandmillionsofotherolderpeoplestayinhomesbuiltforlargerfamilies,
manyotherpeople’schildrencannotsettledownasyoungadultswithsomeonetheymeetbecausetherearenohomestheycanaffordtorentasaresultoftheshortagecreatedbytheelderly.Theelderly,inthemain,arenotlivingwithsomuchspacebecausetheywantto,butbecausethey
wanttobenefitthegenerationthatwillcomeafterthem.Underlyingallthisisthefarmurkier
manipulationoffinanceandhousingmarkets.Manipulatinginterestratesmakesitmore
expensivetoborrow,soinheritancesbecomemorevital.Seeingthelinksallthewaydownthechain–fromthemanwhofixedtheLiborrateyesterdaytothegirlwhohasnohometoday–is
![Page 676: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/676.jpg)
farfromsimple;whichiswhytheyhavegot
![Page 677: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/677.jpg)
awaywithitforsolong,andwhytheywillcontinuetodosountilweallbecomelesspliant.
Whetherit’s£20ofunwarrantedhousingbenefitclaimed,£2,000cash-in-handtoabuilderora£200,000bonussecuredbecauseyourLiborguesseswerecorrect(afterhavingmanipulatedthemwithyourmates),itisstillfraud.Itis,however,fraudthatincreasesbyseveralordersofmagnitudeasyoumoveupthespectrum.Itwouldtakemillionsofactsofhomelesspeopleallutteringthesamelietoequatetoasinglelieofasinglebankerawardedabonus.Intheendsomeofthemoniesfraudulentlyraisedmightbespentonthesamethingalthoughindifferentform:cocaineintheboardrooms,SpecialBrewonthestreets.Inthiswayweareallthe
![Page 678: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/678.jpg)
same,butwhenitcomestohousingtherearebarriersbetweenusthatareoftensimplyinsurmountable.Thehomelessarenotequal.Just
givingeveryonetheopportunitytobehoused,sayingthattheyhavetheright,shouldtheyworkhardenough,doesnotmeanthatwereallyareequalinopportunity.Ifyouarenotwellhousedyoucannoteasilypresentyourselfasavailableforwork.Youlookamess.Yousmell.Thisisanequalityofopportunitythat,inthewordsofJeremyWaldron,ProfessorofLaw,JurisprudenceandSocialPolicy(inalandmarkpaperpublishedin1991),saidwasanequalitythathadnorealisticprospectofeverhappening.23Similarly,ifyouhavetoliveinthepoorestpartoftown,
![Page 679: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/679.jpg)
youarenotequallyabletocompeteforwork,foreducation,forachance.Whatisreducingthechancesof
thehomeless,andthebadlyhoused,mostisnotgovernment’sfailuretoensurethathousesarebuilt,butratherotherpeople’sover-consumptionofhousing.‘Second’homesshouldbepartofthehomelessnessdebate.Emptyroomsarenotaloneinbeingresponsibleforothershavinglessaccesstohousing.Themorehomesthatareusedassparehomes,thefewerfirsthomestherewillbe,andthelessspacetherewillbeforothers.Space,however,isnottheonly
issue.Skyscrapersuseupverylittlegroundspace,buttheytoopotentiallyincreasehomelessness,becausetheresourcesusedupin
![Page 680: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/680.jpg)
buildingthemcouldbeputtobetteruse.Itisfarmoreexpensivetobuildaskyscraperthanitistoconstructtheequivalentfloorspaceofnormalofficesorapartments.Sosecondhomes,emptyandunder-occupiedpropertyandskyscrapersareallpartofthepresenthousingandbuildingwaste.Therehasneverbeensomuchscopetohouseourselvesbothfarbetterandfarcheaperthanwecurrentlydo.
![Page 681: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/681.jpg)
![Page 682: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/682.jpg)
ViewoverBrookHillinSheffield,showingsocialhousingatthefrontandsmallerprivateapartmentstotheright.Inthedistance,ona
formerslagheap,aski-slopehasbeenbuilt,butitisnotagreatsuccess.Whenitcomestoskiing,SheffieldisaboutasfarfromDavosasitis
possibletoget.ThekeydecisionsthataffecthowpeoplearehousedinSheffieldarenowmadenowherenearthatcity.Mostofthepeoplewhogettoinfluencehousingpolicydonotliveinthekindsofhousingthattheirdecisionsinfluenceeachday.Housingministersandcommentators,chiefexecutivesofhousingorganizationsandthe
mainfinanciersofhousing,aswellasthosedesigningnewhousingbenefitrules,tendtoliveinveryexpensiveproperties.Canyouimaginehavingeducationpolicydesignedbypeoplewhodonotusestateeducationfortheirchildrenandhavenotgonethroughitthemselves?OrtrytoimaginetheNationalHealthServicebeingrunwellbypeoplewhodonotrelyonit,peoplewhoknowthatiftheyareilltheycanaffordthemostexpensiveofprivatetreatmentsthatalmostno
oneelsecanbuy.Allthesebasicservicesbecomebadlymanagedwhenrunanddiscussedby
peoplewithlittleknowledgeofthemandwithnopersonalstakeinthoseservicesworkingwell.
![Page 683: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/683.jpg)
Earlyin2013thethenUKPlanningMinister,NickBoles,andtheChairmanoftheNationalTrust,SimonJenkins,debatedhousingonnationalTV.24Jenkinssuggestedthatthehousingcrisiscouldbesolvedbybuildingmorehigh-riseflatsincities.BolesretortedthathehadbeentoatleasttwoofJenkins’shomes,andthatanyonewhohadaccesstomorethanonehomewasinnopositiontotellothersthattheyshouldlivewithoutagarden.ThenextdayBolesgaveaspeechattheofficesoftheright-wingthinktankPolicyExchange,inwhichheclaimedthattheonlywayforwardonhousing,forConservatives,wastoderegulatebuildingongreenland.TheNationalTrustisaconservationbody,soitislittlewonderthat
![Page 684: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/684.jpg)
JenkinswasangryaboutwhatBoleswassuggesting.TheConservativepoliticalpartyusedtobelieveinconservation,butasithasmovedfurtherandfurthertowardsfree-marketideology,obstaclestomakingaprofit,suchaspreservinggreenbelts,havecomeunderthreat.ThiscreatestensionwithinConservativecircles,asgreenbeltsalsoprotectthehighpropertypricesofthericherpeoplewhotendtolivewithinthebeltsorhaveviewsouttowardsthem.Oftenwhatisbeingprotectedarethevaluesofsecondhomes–countryretreats.Theacquisitionofsecondhomes
ispositivelyencouragedbytheUKtaxationsystem.Secondhomesoftenattractacounciltaxdiscountofupto50%,dependingonthepolicyofthe
![Page 685: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/685.jpg)
localcouncil.25Bycontrast,aswehaveseen,counciltaxbillsfortheverypooraresoonsettorise.WearecurrentlyfindingoutmoreandmoreofwhatthecoalitiongovernmentreallydesiresforBritain;butonlyindribsanddrabs,asjournalistsandhousinganalystswithapersonalinterestdiscoverwhatUK,oratleastEnglish,housingpolicyreallyis.Ithasbeendisguisedbecauseclearlyamajorityofpotentialvotersdonotbenefitfromit.Thehousingpolicythatemerged
during2013encouragedafurtherfree-for-all–akindofsurvival-of-the-fittestfutureforhousing,inwhichafewproperty-owners,includinglandlords,willbecomeevenricher,butmostpeoplewillenduppayingevenmoreforthe
![Page 686: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/686.jpg)
privilegeofbuyinginthelongrun,whilethinkingtheyareenjoyinglowinterestratesintheshortterm.Thelegislationputinplacebythecurrentgovernmenttoderegulatetheplanningprocess,toguaranteemorebanklendingandtopenalizepoorerhouseholdswasnotevenhintedatinanypoliticalparty’smanifesto,norintheMay2010coalitionagreementdocument.OutsideofEnglandthereare
alreadyplansunderwaytoreversepoliciesthathavebeenbroughtinwithoutvotersgettingtohaveasay.InScotland,itwasannouncedinautumn2013thattheBedroomTaxwouldbescrapped.26Theseplanswerebolsteredbythefindingthatsome50,000peoplefacedevictionbecauseofthetax,andthathundreds
![Page 687: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/687.jpg)
ofthousandsmorewerefallingintoarrears,especiallyinlow-incomeareasofScotland.27Earlier–asifthefalloutfromtheBedroomTaxbeingimplementedwerenotenough–inJanuary2013,itwasrevealedbyanalystsworkingfortheResolutionFoundationthinktankthatthediscretionarycounciltaxrebatereferredtoabove,theonedubbed‘EricPickles’sPollTax’,wasveryunlikelytobegiventothoseinneed,aslocalcouncilsfacedsuchgreatcutsinotherpartsoftheirbudgets.InSeptember2013itwassaidthat
thegovernment’s‘decisiontoreducethebudgetforcounciltaxsupportby10%meanslow-incomehouseholdsfaceataxincreaseofupto£600’ayear.28Numerouscutsstartedtokickinduring2013.Theexamplethe
![Page 688: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/688.jpg)
ResolutionFoundationgavewasthatasingleparentwhoisinemploymentcouldseetheirannualcounciltaxbillrisebyover£10aweekafterApril2013.Subsequently,iftheiremploymentislowpaid–andmostsingleparentswhoworkarenotwellpaid–itmaybenearlyimpossibletofindthatadditional£600ayear.Enforcedpaymentofthismoney,saidWestminsterCouncil(referredtoabove),wouldbeuneconomical.HopefullyWestminsterwon’tevenaskforit,butlegallytheyareentitledtotry,andothercouncilsappeartobetrying.BySeptember2013oneinthreecounciltenantswasalreadyinarrearsontheirrent,afarhighernumberthaneverrecordedbefore,andrising,becauseofallthesecutsandcharges.29
![Page 689: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/689.jpg)
Meanwhile,attheluxuryendofthehousingmarket,aboomiscurrentlyunderwayintheUK,mimickingtrendsseenfirstontheothersideoftheAtlantic.ThelargestUSluxuryhomeandluxurysecond-homebuilder,TollBrothers,acompanythatfocusesonaffluentcustomerswhotypicallymakeatleast$100,000ayearand(itclaims)whohavespotlesscreditrecords,reportedagreatincreaseinordersandforecasthigherrevenuefortheyearstocome.Youoftenseeadvertsforthiscompanyontheinternet,andtheyarenotdoingbadly:‘Weareenjoyingthemostsustaineddemandwehaveexperiencedinoverfiveyears,’Toll’sChiefExecutive,DouglasC.YearleyJr,said,wheninterviewedin2012.30
![Page 690: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/690.jpg)
DouglasC.YearleyJunior’ssalaryin2011hadbeen$1million,plusafurther$4.5millionofstockawards,optionsandotherformsof‘compensation’,accordingtocompanyrecords.31Suchimmenselyhighsalariesandaboominluxurybuilding,coupledwiththecontinuedimmiserizationofthepoorestinsociety,tendtocomebeforeafall.Financialanalystsareincreasinglyonthelookoutforfalls,andwhentheamountofwhatiscalled‘quantitativeeasing’–theprintingofvirtualmoneyinLondonandNewYork–slows,afallmightverywellbeonthecards.IntheUS,theFederalReserve
decidedtocarryonwithitsployofquantitativeeasingthroughtoatleastwinter2013becauseofsuchfears.32
![Page 691: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/691.jpg)
Whatisunpredictableishowthehousingmarketwillpolarizebeforethenextfall.Ifafallisprolonged,itiscalledaslump.Buthowcanwetellifaslumpiscomingorisalreadyuponus?Onewayistolookupintothesky.Slumps,overthecourseofthelastcentury,havetendedtobeaccompaniedbytheconcreteresultsofmassiveover-exuberance.Oneformofover-exuberanceistheconstructionofverytallbuildings.
![Page 692: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/692.jpg)
Figure14.Numberofbuildingsover256metreshighbuiltperyear,worldwide,1930–
2012.
Verytallskyscrapersareagoodmeasureofexcess:objectswebuildnotnecessarilywhenweneedthem,butwhenwearefeelingflushenoughtoaffordthem.Itturnsoutthat,worldwide,asmanyverytallbuildingshavebeenerectedinthelastthreeyears,2010to2012,asin
![Page 693: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/693.jpg)
thepreviouseighteen.Inthosetwenty-oneyearscombinedsome152buildingsover256metrestallwerebuiltaroundtheglobe.Twobuiltearlierweredestroyedon11September2001andarenotincludedinthegraphabove.TheideatodrawthisgraphcamefromhavingrecentlyseenonelikeitthatdetailedallnewbuildingsinNewYorkover70metreshigh.NewYork’speakbuildingperiod
camenotin2012butintheearly1930s,justafterthe1929economiccrash.AcopyofthatNewYorkdiagramisshownbelow.Itillustrateshow,aftertheexcessesof1930sbuilding–financedandplannedforoftenlongbefore1929–camealongperiodofbuildingcalminNewYork.Aperiodofcalmcouldbe
![Page 694: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/694.jpg)
returningagaintotheUnitedStates,butitwilldependonlegislation,notjusteconomics.Asof2013housepricesinNewYorkarestillnotmoving.Theyremainjust3.3%abovetheir2006averagelevels.ByDecember2013,ontheothersideofAmerica,housingpricesinLosAngelesweredescribedashavingstayedflatsinceJune.33Thatsummer’srumoursofapropertyrevivalintheUSappearedoverblownjustsixmonthslater.34
Inthe1950sand1960s,whentheUSeconomywasbooming,peopleweresensibleandlimitedtheconstructionoftallbuildings.Backthensuchedificeswerestillrememberedassymbolsoftheexcessive1920sexuberance.Plannersknewskyscraperswere
![Page 695: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/695.jpg)
needednottoturnanhonestprofit,buttoimpressthesuggestible.Later,aspotentialinvestorsbegantoforgetthepast,andintherun-uptothe1970srecession,Americansbegantobuildtallagain,withmost1970sbuildingsreachingtheirmaximumheightafewyearsafterthepeakofthateconomicslump.Thegraphbelowmakesallthisveryclear.ThesamethinghappenedinNew
Yorkagaininthe1980s,andagaininthenoughties.Perhapsthecurrentworldwidebubbleofhigh-risebuildingisanechoofthisNewYorkphenomenon.By2012,inLondon,thecranesusedtoconstructtallbuildingsweremoreoftenbeingtakendownthanputup.FigureswerereleasedinJanuary2013,afterahelicoptercrashedintoa
![Page 696: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/696.jpg)
constructioncraneworkingonhigh-risenearVauxhalltubestation.Theserevealedthat,evenasthepropertyboominthecapitalcontinued,atleastintermsofapparentlyrisinghomevalues,thenumberofcranesonLondon’sskylinefell,from712inthefirsthalfof2011to413bythefirsthalfof2012.35
![Page 697: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/697.jpg)
Figure15.Buildingsover70metrestallconstructedinNewYork,1890–2009,byyear.
CranesfinallybegintocomedownonLondon’sskylinewhenthebuildingoftheshowiestcommercialandresidentialpropertyitselfbeginstoslowdown.Byspring2013itwasalsorevealedthat,inthelightof
![Page 698: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/698.jpg)
fewerbonuses,bankersandverywealthyoverseasinvestorswerebuyingandrefurbishingalittlelessresidentialpropertyincentralLondonthantheyhadbeentheyearbefore.Then,inAugust2013,averagepricesdroppedbyover7%inWestminster,5%inCamden,4%inBrent,and3.5%,and3%in,respectively,Kensington&ChelseaandGreenwich;36whileoverinGreenwichVillage,NewYork,andinmuchoftherestofAmerica,priceshadnotevenrecoveredsufficientlytofallsomuchagain.By2013,accordingtooneUSpropertyspeculator,theyremained‘22%belowthe48-year“trendline”[established]between1951and1999’.37
![Page 699: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/699.jpg)
Itisnotjustwithinmoreprovincialtownsandcitiesthatpowerappearstobelacking.ManydecisionsthataffectLondonandNewYorkarenolongermadeanywherenearthosetwocities,atleastnotbyindividualfamilies.Increasinglytheyaremadebysomeoftherichestpeopleonearth,whoaredrivingthecurrentboominhousing,atleastinthoseplaceswherethereisaboom.(Wherethereisnoboom,theretendtobenosuper-rich.)Ofcoursesomeofthekeydecisionsaremadepreciselyinthetwincentresoftheworldfinancialeconomy,LondonandNewYork.TheprivateequityfirmBlackstoneisheadquarteredinParkAvenue,NewYork;anditsLondonofficesareinBerkeleySquare.But
![Page 700: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/700.jpg)
whenafirmlikeBlackstonestartstobuyuphomesthatusedtobeboughtbyfamilies,ordinarypeopleneedtobeginworrying,andneedtolookatwhoisbehindsuchcompanies.Whosemoneyaretheyinvesting?38
Theclueastowhereprivateequityfirmsgettheircashfromisinthewords‘privateequity’.Itistheprivatemoneyoftheextremelyrich.Sonowweneedtolookatsomeoftherichestpeopleontheplanet.Itistheirbehaviourthatiscurrentlyleadingusmostforcefullyinthedirectionofwhatcouldbeawidespreadslump.
SUPER-RICH
ForthecostofasmallfamilyhouseinFulham,youcouldbuyastreetinSunderland.Fortheamountsomeoftheworld’swealthiestpeopleare
![Page 701: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/701.jpg)
willingtopaytoownahomeinKensington,theycouldalsobuyasmalltowniftheylookedhardenough.London’spropertypriceshavegonemad.Butitisaninsanitywhichislikelytotakeitstollontherestofus.
–AnthonyHilton,businessandfinance
journalist,201339
AnyonewhoknowsanythingabouttheUKandhousingknowsthattheinfluxofincreasingnumbersofinternational,super-richindividualsintotheheartofLondoniswhathasdriventhecontinuedpropertyboomthere,withasubstantialrippleeffect,convincingmorelocalbuyersthatpropertywithintheM25isworthasmuchastheyhavepaidforit.WhenahomeinthecentreofLondonappearstobeworthmanymillionsofpounds,itcanappearplausiblefor
![Page 702: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/702.jpg)
yourhomeontheedgeofLondontobevaluedatmanyhundredsofthousandsofpounds.Themapbelowshowswhere
primecentralLondonpropertyistobefound,andalsowhohasbeenfindingit.Housepricesintheseareaswerereportedtohaverisenbyoverathirdsincethe‘lowpoint’ofMarch2009,sothatbyspring2012theywere12%higherthantheyhadbeenattheheightofthepreviousboom.40Inthefirstsevenmonthsof2013alonetheyroseanother6%,butinAugust,asreportedabove,thefirstfallswereannounced.Withindaysevidencewasalsopublishedofpricesfallinginsomeofthepoorerboroughs,partlybecausecounciltaxishigherthepoorerthearea!41
However,thesefallswereignoredby
![Page 703: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/703.jpg)
theBritishpress,which,inautumn2013,preferredtoconcentrateonhearsaystoriesthattherichwerestillfloodingin.42Allittakestosustainabubbleisover-confidenceandhearsay.Themoreanysmallfallsinhousingpricesareignored,thegreatertheeventuallargefallwillbe.Londonpricesappearedtobe
risinguptoChristmas2013,althoughnotintheleastandmostexpensivepartsofthecapital.InsecurityelsewhereinEurope,especiallyinGreeceandCyprus,continuedtofueltheinfluxofwealthyforeignersintoLondonandpreventedmorepricefalls.TherecentriseinpriceshadbeeninstigatedbyRussianoligarchs,whointurnwerefollowedbyChinesefactory-owners.Nextcametaxexiles
![Page 704: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/704.jpg)
frommainlandEurope.ButbeforetheRussianstherehadbeenothers.TherehavebeeneliteFrenchandothernon-English-languageschoolsinLondonformanyyears,becausefordecadesmuchofEurope’selitepreferredLondonto‘home’.SothecurrentboomisbuiltuponarecenthistoryofLondonasasanctuaryforthesuper-rich.Thesuper-richhavehadthemost
effectonLondon’sboom,butaretoofewinnumbertobeitssolecause.Beneaththemthenot-quite-so-richhavealsobeencontributing.Whatthesuper-richchangethemostistheeverydaythinkingofthosejustbelowthem,whoapetheirbehaviourinslightlymoremodestways.Thismind-setcascadesdowntootherwisenormallysensiblepeople,whoin
![Page 705: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/705.jpg)
turnbehaveinwaysthataresimplynotrationalwhenlookedatwithdetachedeyes.Takeposhsheds–notinprime
gardensinSlough,butinprimeseasideresortsontheEnglishsouthcoast,rememberingthatthiscoasthardlyeverhasMediterraneantemperaturesorbeautifulmountainousvistas.InBritaintheseshedsbytheseaarecalledbeachhuts.Howmuchdoyouthinkthemostpriceybeachhutsellsfor?Theanswerismorethanasixthofamillionpounds,foraone-roombuildingyoucannot(bylaw)sleepin!Youmaythinkyouneedtolooktothesuper-richtoknowwhoisbuyingbeachhutsfor£170,000,butitisnotthem.Themarketisfuelledbypeoplewhohavemadealotof
![Page 706: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/706.jpg)
money,whomimicthebuyingpatternsofbillionaires,butbybuyinghuts,notmansions.
Figure16.PrimecentralLondonpropertylocationsandnationalpreferences,2012.
Alittlegroupofpeoplewithmoremoneythansensecannowbefoundineverysmalltowninthesouthof
![Page 707: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/707.jpg)
England,andinmanylargertownsinthenorth.Takeoneparticulargenuinebeachhut,theonethatfamouslysoldfor£170,000,whichisathirty-minutewalkfromthenearestroad:itturnsoutthat‘IthasbeenboughtbyawealthyfamilyfromChristchurch,whosechildrenarenowgrownup.’43ChristchurchisnoMonteCarlo.Suchbuyingpatterns,andtheoft-repeatedstoriesaboutthem,causemanyslightlylessopulentpeopletothinkthattheextremelywealthy,aswellasthesuper-rich,mighthavealotmoremoneythantheyneed.Sometimeagothatdescendantof
minorRussianaristocracy,NickClegg,suggesteda‘mansiontax’,anewassettaxonhomesworthover£1million.Othersquicklypointed
![Page 708: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/708.jpg)
outthattherewasnoneedforanewtaxtoachieveextrarevenuegeneration;adaptingtheexistingcounciltaxbandscouldworkbetter.CurrentlyeachresidentialpropertyinBritainistaxedaccordingtowhichofeightpricebands,‘A’to‘H’,itfellintowhenvaluedin1991.Manynewbandsmighteasilybecreatedaboveband‘H’.In2005theNationalAssemblyforWalesaddedanextraband,band‘I’,onpropertyworthover£424,000,butthatappliesonlyinWales.TheDeputyPrimeMinistercouldhavesuggestedaddingbands‘J’to‘O’togetupto£1million.44
However,Cleggwantedasimplenewspaperheadline.Thereisaproblemwithcopying
theWelshandaddingextrabands,each£100,000morethanthelast.
![Page 709: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/709.jpg)
LongbeforeyouhitthetoppropertypricesyouquicklyrunoutofbandsifyoudothisinEngland.However,thereisanalternative.Ifeachcounciltaxbandabove‘H’(£320,000)weretobedoubled–sothatband‘I’appliedtopropertyworthmorethan£640,000;‘J’tothatvaluedatover£1,280,000,andsoon–homesworthmorethan£40millionwouldthenfallintoband‘O’.Inatrulyprogressivesocietytheassociatedcounciltaxwoulddoublewitheachsuccessivebandabove‘H’.Amansiontaxisnotabadidea–butitisfarbettertoimplementitlikethis,inincrements,sothatthosewithpropertyworth£5millionknowtheyarepayingless,proportionately,thanthefewwhoown(orarerenting)homesvaluedover£20
![Page 710: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/710.jpg)
million.45Englishsocietyisstillacontinuum,notjustan‘usandthem’division.Propertytaxationneedstobefairandprogressiverightuptotheverytopofthatcontinuum.Nodoubttheodd‘assetrichbutincomepoor’occupantofa$40millionhomewouldbewheeledouttotrytoillustratehowunfairsuchataxwouldbe,buttheysurelycouldtakeinalodger?Remarkably,nogovernmentinEnglandsince1991hasdaredtohavethebandsreassessed,soanyonewhohasbenefitedfromover-averagepropertypriceriseshas,asyet,paidnoextratax.Alternatively(oradditionally),if
NickCleggwantsanewassettax,heshouldlookbackatthegoodoldLiberalideaofalandvaluetax.This
![Page 711: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/711.jpg)
wouldbeataxonalllandonthebasisofwhatitwouldfetchinthemarket,notjustonhomesonthebasisofthepriceatwhichtheylastsold.Alandvaluetaxhasaparticularbeautyinthatifalandownerclaimshisorherlandisworthlessthanitsestimatefortaxpurposes,thegovernmentcanalwaysoffertobuythelandatthatprice;theycancallhisorherbluff.Thevastmajorityofpeoplein
Britainwouldseetheircounciltaxbillsdropiftheywerereplacedbyalandvaluetax.Fewpeopleownverylargegardens,letalonegrousemoorsorofficeblocks.Thelandvaluetaxwouldalsorevolutionizecommercialpropertytaxation.Inonestep,thenatureofourrelationshipwithland,propertyandhousingwouldchange.
![Page 712: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/712.jpg)
ThismaywellstillbeasteptoofarforthewholeoftheUK,butitisbeingconsideredinneighbouringIrelandasIwrite,andcouldbeverypopularinScotland,aswellasinthenorthofEngland,inWales,andamongyoungadultsinthesouthofEngland.Infact,thegroupwhomightbenefitfromopposingsuchataxisrelativelysmall;butthatsmallgroupdoeshavemostofourmoneyandland.IfNickCleggreallywantstolook
atthepossiblebeneficialeffectsofprogressivetaxation,includinglandtaxation,whatheneedstodoistolookawayfromhiscoalitionpartners,andwellawayfromtheirdisdainforthelesswell-off.Heshouldturninsteadtosomeofhisfavouriteplaces,manyofthemore
![Page 713: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/713.jpg)
prosperouscountriesofEurope.ThesecountrieshavelessincomeinequalitythantheUK,andtheirinhabitantslivelongerlives,sufferlesscrimeandrespecteachothermorethandotheBritish.Oneaspectofthatdegreeofrespecthasbeenmeasuredinsurveysaskinghowmuchyoumighttrustastranger;46
butmutualrespectisalsoevidentintheirchoiceofpoliticalparties.Forexample,itisstillcommontohavesocialistpartiesontheContinent,andtherearefarmoresuccessfulgreenpartiestherethanintheUK.InFrance,followingthesocialist
electionvictoryofJune2012,theveryrichestpeoplearenowsettopayastax75%oftheannualincometheyreceiveabovethefirst£810,000.Thisrepresentsexcessand
![Page 714: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/714.jpg)
unneededmoniesbeingdivertedtootherFrenchcitizenswithlesstospare.ButinBritainitwouldbecharacterizedasapunishmentfor‘wealthcreation’.InSwedenthoseearningabove£200,000ayearpayalmost57%taxontheiradditionalincomeoverthatthreshold.InBritainitwouldbesuggestedthatthiswillhindertheSwedesinthe‘globalrace’.InDenmarkthehighertaxratekicksinatanevenlowersalarypoint,attherateof55%forallincomeoverthefirst£46,000ayear.ThiskeepshousingpricesdowninCopenhagen.InBritaintherichwouldmuchratherpaylesstaxandseeeveryoneelsepaymoreinrentormortgagesinordertobehoused.Itisnotjustbetterassettaxation,
counciltaxandlandtaxesthatcould
![Page 715: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/715.jpg)
helptokeepdownhousingpricesinfuture.Thebest-offbeingtaxedmoreontheirsurplusincomes–incometheysimplydonotneedinordertolivewell–wouldkeeppricesatthetopdown,astherichwouldthenhavelesstospendonhousing.Whichisbetter:amultimillionairebuyingahomefor£2million,oramultimillionairepayinganextra£1millioninincometaxandbuyingahomecosting‘just’£1million?Inthecountrieswheretherichpaymoretax,thereareusuallyalsomoregoodjobsforordinarypeople.‘Wealthcreators’maysometimescreatejobs,buttheyarenotnecessarilytheonesyouaspiretohave.TherichinDenmarkhavelessto
spend,buttheyliveinacountryof
![Page 716: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/716.jpg)
greatersocialsolidarityasaresult.Fewerpeopleneedtopayforacartogettowork,becauseofthebetterpublicprovisionofcyclelanes.IntheNetherlandsthetoprateoftaxis52%onanyincomereceivedinexcessof£46,000ayear.TheDutcharenowonaveragethetallestandmosthealthypeopleonearth.InAustriathe50%ratekicksinatincomesover£49,000.UnemploymentbenefitsinAustriaaremanytimeshigherthanthoseinBritain,andthemiddleclassesinAustriadonotfearlosingtheirjobsinthesamewayasaresult.Theyarefreertotakerisksandtomovebetweenjobs.InBritaintoloseyourmiddle-classjobwithoutquicklyfindinganotherisalsotoloseyourclassstatus,toenteraworldyou
![Page 717: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/717.jpg)
knowlittleabout–onethatyouhavelearnedtofear.TheseEuropeancountriesarefar
frombeingsocialistutopias.InDenmark,forexample,wealthinequalitiesbyonemeasure47remainhigherthanintheUK–alegacyofafarmoreunequalpast–butthoseinequalitiesarecurrentlyfalling,whereasinBritaintheyarerising.AlargepartofthereasonwhywealthinequalitiesinDenmarkarefallingisbecauseincometaxesatthetoparehigher,sotheincome-richareleftwithlessaftertax.If,therefore,theDanishrichattempttomakeadditionalmoneyoutofotherpeople,theygettokeeplessofit.Thisensuresalittlemoresalaryandbonusrestraintatthetop.
![Page 718: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/718.jpg)
InBritainthe45%incometaxratedoesnotkickinuntilincomesexceed£150,000ayear.IfyouareBritish,justtryexplaininghowmuchyougetinunemploymentbenefit(JobSeekers’Allowance),shouldyouloseyourjob,toanAustrian.ItissolittlethattheAustrians,ortheGermans,ortheFrench,ortheBelgians,ortheSwedes,ortheDutchusuallywon’tbelieveyou.ThisisbecauseunemploymentbenefitratesaresomuchhigherinalmostallothernorthernEuropeancountries,andgoodrentcontrolsoftennotonlyexist,butarealsostrictlyenforced.Thereislessneedforhousingsubsidieswhenlowwagesarenotsodreadfullylowandunemploymentbenefitscanbelivedonforatleastayear,ifnottwo,
![Page 719: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/719.jpg)
whilesearchingforanotherjob.Youcouldarguethatlowertaxes
incentivizepeopletoworkharder,astheygettokeepmoreofwhattheyearn;lowertaxesalsomakethemlesschoosyabouttheemploymenttheydotake.ButsomeonecouldeasilycounterthisbylistingallthosepoorercountrieswheretaxratesaremuchlowerthaninBritain,butwheretheelderlyliveinabjectpovertyandmuchoflifeisstillnasty,brutishandshort.It’sasimplepoliticalchoice:embarkonaracetothebottom;ortaxtherichheavilyandavoidwidespreadpovertyasaresult.Thechoicebecomesmoreobviouswhentheneedtoreduceouroverallconsumptionlevelsisalsoconsidered–notjusttoreducepollutionbutalsosothatweareable
![Page 720: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/720.jpg)
tolivebetter,lessmateriallydrivenlivesinthefuture.Anunwillingnesstoaddressthesedeeperissuesisalargepartofwhatsustainsourcurrenthousingcrisis.Sincetheelectionvictoryof2010,
CleggandhisConservativeallieshavekeptonlookingforsolutionstothehousingcrisisthatwouldalsoallowtherichtostayveryrich.Clegg’snextsuggestionwasthatparentsshouldbeallowedtodipintotheirpensionpotstoprovidetheiroffspringwiththedownpaymentonaproperty.Itdidnottakelongforpeopletopointoutthatthiswouldraisehousingpricesevenfurther,whilecreatingmorepotentiallyimpoverishedpensioners.TheDailyMailnotedhowClegg’s
plansrapidlybegantounravel‘asit
![Page 721: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/721.jpg)
becameclearthatonlyasmallminorityoffamilieswouldbeabletotakeadvantageofthem.Criticssaidtheywerea“gimmick”whichwouldapplyonlytothewell-off,whocanaffordtorisklosingsomeofthemoneytheyhavesavedtofinancetheirretirement.’48WhentheDailyMailturnsagainstacoalitiongovernmentdoingallitcantotrytokeephousingpriceshigh,yousensethatafundamentalshiftinmainstreamsentimentmaybeunderway.Butthisisashifttowardsuncertaintyandevermoreworry,ratherthantowardsaNewJerusalem.Somanyproperty-owning/mortgageevotersthinktheyhavesomuchtolosefromlowerhousepricesthatalmostnomainstreampoliticiansare
![Page 722: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/722.jpg)
suggestingthatitwouldbegoodifpricesandrentsweresoontofall.Alltheycansuggestisthatitwouldbehelpfuliftheywerenottorisefurther.OthercommentsontheDailyMail
websitealsohelpedtoexplaintoNickCleggwhyhisideawouldnotwork;andhiscolleague,LiberalDemocratSimonHughes,offeredsomehelpfuladvicetoo,butinthepagesoftheGuardian(aswhathehadtosayremainsanathematotheMail).HepointedoutthattheaveragedepositonahomeinBritainhasnowrisento£65,000,whileinLondonitisover£100,000.Hesaidthatwehadreachedthepointwhereitwasimpossibleformosttobuywithouthelpfroman(oftenageing)parentorunspecified‘other
![Page 723: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/723.jpg)
benefactor’,andthatthisappliednotonlytoyoungpeoplebutalsotothemiddleaged.AndheexplainedthatBritonslivinginsocialhousing,onefifthofthepopulation,hadnochanceofeverowningpropertynow,asthedoorwas‘firmlyclosedonthepossibilityoffuturehomeownership’.49SimonHughesadvocatedcontrollingandreininginthepurchaseofsecondhomes,butimpliedthatthisalonewouldnotbeenoughtopreventthehousingcrisisgrowingdeeperandheadingfurthertowardsdisaster.Somethinghastogive,andthe
‘unthinkable’isbeingconsidered,but,sofar,justquietly.Duringsummer2012planswerebeingconsideredontherightwingofBritishpoliticsthatincludedthe
![Page 724: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/724.jpg)
impositionofbothcapitalgainstaxandanewannualholdingtax(of2%oftheproperty’svalue)tobeappliedtoanyoverseasbuyersofEnglishsecondhomesworth£2millionormore.AccordingtothethinktankInstituteforPublicPolicyResearch,thesewere‘measuresonwhichthegovernmentiscurrentlyconsulting’.50Propertyconsultantsbegantolookforloopholesintheproposedlegislationthatcouldapplyto‘non-naturalpersons’whosehomeswouldbeusedonlyfor‘genuinelycommercialactivities’ratherthanforlivingin.51Byautumn2013theChancellorhadannouncedthatnon-domswouldbepayingcapitalgainstaxontheirpropertiesfrom2015.OntheUKpoliticalleft,similarthoughtsandpoliciesare
![Page 725: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/725.jpg)
beingbandiedaboutalittlelessquietly,withthetaxincludingallrichbuyers,notjustthosefromoverseas.Then,justbeforeChristmas2013,EdMilibandpromisedthatLabourwouldimplementaseriesofmoreprogressivehousingpolicies,shouldthatpartygainpowerin2015.Whathappensifnoneofthese
plansisimplemented,nonecomestoanyrealfruition;or,iftheyareimplemented,loopholesarefound?AcolleagueofminelivinginLondonjokedthatheandhispartnerwereplanningto‘buildanelectricfencearoundourhousetokeepouttheriffraffandmansiontaxinspectorsandkeepinournanny’.‘Goodidea,’Isaid,‘buthowareyougoingtogetinfood?’Isuggested
![Page 726: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/726.jpg)
thattheWaitrosedelivery-vandriverwouldhavetobemicrochipped.‘Eatthepoor,’hereplied,meaningmetaphoricallyofcourse,notliterally.WhatIthinkhereallymeantwas–whatelsecouldhedo?Hehadtokeepearningasmuchashecurrentlyearnstokeephisheadabovewaterinthepoolofcompetitioninwhichheandhispartnernowfindthemselves.Anytalkofhavingtopayamansiontaxfrightensthem.Andtheyarefarfromrightwing.Therearemanyexamplesof
backslidingonwhatinitiallyappeartobeprogressivepolicyproposals.WhentheLabourPartyversionofthemansiontaxwasfinallyannouncedinFebruary2013byEdMiliband,itsproposedratehad
![Page 727: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/727.jpg)
droppedto1%.Labourhadback-pedalled,Isuspect,becausetoomanyoftheirfriends,advisersandMPsliveinLondonpropertyvaluedatwelloveramillion.Despitethereducedproposedlevy,London’schatteringclassesreceivedthenewswithsomedismay.ThatGuardiancommentatorandmultiple-property-ownerSimonJenkinscomplained:‘Bysettingthetaxat1%,whichishigh,Milibandhasmadesureofahowlofprotestfromtheasset-richandcash-poor,whowillneedtofindmultiplesof£5,000ayearforeachhalfmillioninvalueabove£2million.’52Itwasinteresting,andkeytounderstandingthedilemmawearein,toseethatJenkinsthoughtthata1%levywashigh.OverattheDailyTelegraph,letter-writerswith
![Page 728: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/728.jpg)
expensivepropertiesalsocomplained.Theysaidthattheywouldfindithardtokeeptheir‘family’homesopentothepublic,orthatthetaxwouldencouragethemto‘ripoutourimprovementsanddeliberatelydevalue’.53Oneschoolofthoughtsuggeststhatthemoretheysqueal,theneareryouknowyou’regettingtothemoney.
![Page 729: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/729.jpg)
![Page 730: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/730.jpg)
Ahalf-boarded-uphomeintheNetherEdgesuburbofSheffield.Oftenitissuggestedthatany
increasesinpropertytaxationfortheveryaffluentwillleadtosomeboardingupofhomesthattheycannotaffordtorun.However,therearealreadymanylargeboarded-uppropertiesthatare
seenasagoodinvestmentbytheirownersbecausetheydonothavetopayahighrateoftaxationforholdingthemempty.Weneed
policiesthatdetervacancywhilesimultaneouslymakinghousingmoreaffordable.Farmore
progressivetaxationisneededtohelpbringdownthesupposedlyhighvalueoflargerhomes.Weneedadevaluationthatmakesthesehomes
affordable,sothatpeoplecanliveinthemasafamilyorasalargegroupofyoungadults.Also,ifpriceswerefalling,andnotexpectedtorise
againanytimesoon,theownermightbekeenertogetaquicksale.Inthephotographabove,theupperwindowsofthispropertyarenotboarded,becauseitisthoughtthatpotentialsquatterswouldfindittoohardtogainaccessthroughthosewindows.Britainhasenoughhomes,buthasneitherthesystemsnorthesocietyneededtomakegooduseofitsplenty.What’smore,if
propertytaxationweretobringdownthevalueofhomesinLondon,howmanypeoplelivingin
Londonmightconsiderlivinginahouselikethis
![Page 731: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/731.jpg)
inSheffield?HowmanypeoplestayinLondonayearlongerthantheyreallywanttobecausetheir
homeismakingmoremoneythantheydothroughtheirjobs?
LENDINGSLOWDOWN
[Whenitbeganin2007]thisself-reinforcingprocesswas,ineffect,amassivebankrunthatcausedtheshadowbankingsystemtoshrivelup,muchastheconventionalbankingsystemdidintheearly1930s.
–PaulKrugman,economist,200854
Researchingpropertyvaluesandlendingtrendsisnotacheapbusiness.IfyourequestdatafromtheLandRegistryforEnglandandWalesonallresidentialpropertytransactions,youwillbetoldthat‘OurchargingpolicyfollowsTreasuryguidelines.’Andthenyouwillbetoldthepricesthatyouwill
![Page 732: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/732.jpg)
havetopay,shouldyouwishtoreceivemanyyears’worthofdata:
1995–2004inclusive(11millionrecords)=£30,000+VAT2005–February2011inclusive(5
millionrecords)=£49,010+VAT55
Furthermorethereisanannualsubscriptionof£2,200plusVAT.But,evenwithoutpayinganyofthismoneyyoucantellthatsomethingdramatichashappenedjustfromthesalesfigures.From1995to2007therewere,on
average,justover1,136,000registeredpropertysalesayearinEnglandandWales.Sincethentherehasbeenaslumpinpropertysales,sotheyarenowaveragingjustover643,000ayear.Inshort,since2008,theUKhousingmarkethasbeensufferingaslowdown.Itshowsno
![Page 733: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/733.jpg)
signyetofsustainedrecovery.Theapparentpricerisesoflatesummer2013werenotaccompaniedbyacorrespondinglargeincreaseinthenumberofsales.Sotheaveragesellingpricesrose,evenwhilethenumbersuponwhichthoseaverageswerebasedfellorstayedlow.Furthermore,thepricesbeingpaidbybuyersusingamortgagewerealsofoundtobefallingastheoverallaveragepurchasepricesrose;itwasthecashbuyerswhowerefuellingthemini-boomoflate2013,andthenonlytoanygreatextentinLondon.56
AlltheresidentialpropertyinGreatBritainandNorthernIrelandisvaluedatbetween£5trillionand£6trillion.However,thatfigurecanonlybeassessedinrelationtowhatBritainitselfisworthineconomic
![Page 734: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/734.jpg)
terms,asanisland,asaplacetocallhome.Bysummer2012ithadbecomeclearthatBritain’sannualgrossnationalproduct,its$2.2trillioneconomy,hadbecomedwarfedbythe$15trillioninbankingassetsthatwere(infinancialtheory)housedintheCityofLondon.Roughlyhalfofthat$15trillionwasheldinthemostvolatileofassetclasses.Thoseassetsexisted,iftheword‘exist’canhaveitsmeaningstretched,intheformofbank-to-bankloansand,evenmoredangerously,inhigh-riskderivativesecurities.Insummer2012,whenreportingallthesefigures,theNewYorkTimessuggestedthat‘theworryisthatwhatwasonceanassethasbecomealiability,withtheCitybecoming,ineffect,toobigto
![Page 735: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/735.jpg)
regulate’.57FortheUKasawhole,withturnovernotpickingup,itwasdawningonafewofthoseoverseasinvestorswhoreadtheNewYorkTimesthattherewasasyetnosignofagradualreturntobusinessasusual.ThismayexplainpartoftheAugust2013slumpbetterthan‘thewarmweather’does!58ItmayalsoexplainthePrimeMinister’sdesperateannouncementinSeptember2013that‘help-to-buy’wouldbebroughtforwardandintroducedwithintheweek.TheUKpropertymarketof1995to2007,whennearly15millionpropertieschangedhands,ishistory.Whenpricesriserapidly,aslump
alwaysoccurseventually,becausesomeoneistakingmorethantheyneed,alittle‘extra’.Inthecaseofa
![Page 736: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/736.jpg)
casino,itisthesupposedcosttothe‘house’ofprovidingagamblingvenuethatisusedtojustifythatextra.Inthecaseofhousing,itisgreedypropertyspeculators,togetherwithcolludingbanks,thatdemandshort-andmedium-term‘interest’,whoaddtothecostofborrowing.Thiscanmakegamblingonhousingnotworthwhileforthevastmajorityofpeople,peoplewhohavetoborrowsuchgreatsumsinordertobuy.Itiswhensufficientnumbersofpotentialbuyersthinkthatitwouldbefoolishtoriskallthattheyhavethataslumpcomes.Justasitisimpossibletoknow
withanycertaintywhenanewslumpmightstart,sotooitisveryhardtoknowwhenaslumpwillcometoanend.Justaswithviolentearthquakes,
![Page 737: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/737.jpg)
wecanrecognizethecircumstancesinwhichpriceslumpsaremorelikelytooccur,andtheplaceswheretheyaremorelikelytohappen,butwecannotknowpreciselywhentheywillstrike.Ifmarketsweremorepredictable,iftheytendedtoreplicatepastbehaviourverysimply,theirpatternscouldbeexploitedforgreatfutureprofit.Analystsliketopretendtheycandosuchthings,andsomemayevenbelievethattheycan,butmostlearnthattheycan’t.Whenitcomestogambling,there
willalwaysbeafewwinners,andsomeofthemwillclaimitwastheir‘system’thathelpedthemtogamblesuccessfully.Somearguethatthefinancialcrisisof2008wascausedbytopbankers’lackofskill,andhencebytheirinadequatebetting
![Page 738: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/738.jpg)
systems.Thiswouldbedespitethosebankershavingbeenassessedbythemarketasbeingworthextraordinarysalariesandbonuses.Peoplewhobelievethatbankers’salariesarejustifiedareforcedtoblamethe2008crashon‘excessivegovernmentregulations’.Otherssuggestthatthecrisiswouldhaveoccurredanyway,asallthebankerswerereallyengagedinwasasophisticatedformofgamblingthatwasdestinedtoeventuallyfail,justasallPonzischemesmusteventuallyfail.Tryingtorecognizeasignofthe
slumptocomeinthehousingmarket,aswithanyothermarket,isliketryingtoguesswherearouletteballwilllandasitclattersaroundthewheel.Itistemptingtotry,butultimatelyfutile.Itisbettertowait
![Page 739: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/739.jpg)
untilitfallsintothezeroslotbeforedeclaringthatthetableistobecleared,butwecannotresistspeculating(intheUSroulettewheelsnowhavetwozeroslots,makingthechancesoflosingoutthereevenhigher).Onepossibilityisthatthecurrentslumpwillbefollowedbyafurtherslump.InthecaseoftheUKthisis,attheveryleast,worthconsidering.InJanuary2013itwasreported
thatrentsinEnglandandWaleshadbeguntofall–notjustinafewperipheralareasbutoverall–andthatrentalarrearshadworsened,withsome£326millionlateorunpaidrentsbeingrecordedacrossthesetwocountries,thehighestlevelsincethepreviousmaximaofJanuary2012.59Andthenrent
![Page 740: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/740.jpg)
arrearsroseevenfurtherashalf(yeshalf!)thefamilieshitbytheBedroomTaxwereaddedtotherolesofnewdebtors.60RentshadevenbeguntofallinLondonandthesouth-eastofEngland.Yetthiswashardlyacaseofslumpfollowingslump,forrentshadbeenrisingrapidlyafterthevolumeofhomesaleshalved.Peoplehadvotedwiththeirfeet:unabletoaffordamortgage,theyhaddecidedtorentinstead.Formost,thatwasnotmuchofadecision.Theyhadnoeffective‘marketchoice’.JustasmostofthosewhomustpaytheBedroomTaxhavefewoptionswhenitcomestosecuringasmallerproperty,somostoftherestofushaveveryfewoptionswhenitcomestobuyingaproperty.
![Page 741: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/741.jpg)
Overthecalendaryear2012Londonrecordedthelargestannualriseinaveragerents(6.3%),followedbythesouth-east,whererentswererecordedasbeing3.9%higherthanthepreviousDecember.61
However,intheEastMidlandsandWales,rentshadalreadybeenfallingforayearby2013;andacrossthewholeofEnglandandWalesestimatesofthetotalrentarrearsintheprivatesectorwerefoundtohavegrowntotheirhighestlevelsinceAugust2012,withtotalarrearsof£326millioninJanuary2013,upsharplyfromatotal£241millionrecordedjusttwomonthsearlier.TheseJanuaryarrearsnowrepresented‘10.1%ofalltherentthatwasdueacrossEnglandand
![Page 742: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/742.jpg)
Wales,whileNovember’sarrearsrepresented7.4%ofallrent’.62
Thus,eveninacountrywherehousingpriceshavebeenfallinginmanyareasoutsideofLondon,manypeoplecan’taffordtopayrentsattheircurrentlevels,letaloneatevenhigherones.SalariesandwagesawayfromLondonhavebeenfallingevenfasterthanhousingprices.WithinandaroundLondon,rentshavebeenrisingfasterthansalariesandwages.Butnowherehaverentsfallenbyasmuchasbenefitshavebeencut.Realizabledemand–householdswantinganewhomethatcanalsoaffordone–isdropping;eveninthesouth-eastmoreandmorepeoplecannotputupenoughmoneyforwhattheyneed.
![Page 743: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/743.jpg)
Coupleswhohavesplitupcontinuetoliveinthesamehome,evensleepinthesamebed.Grown-upchildrendonotleavethenest.Newmigrantsdonotstayinthekindsofnumbersthatwouldreallyhelptoenergizetheeconomy;manywhodoarrivequicklyleaveagain,becausethehousingissopoor.Morenewmigrantsreplacethosewhochoosenottosettle.Theorthodoxstorythatistoldisofimmigrants‘swamping’thesouth,supposedlyimmunetothehighcostoflivingthere;butorthodoxstoriesareoftenbasedmoreontheacceptedmythsofourtimesthanonreality.LookbacktowhenimmigrantswerelastsooftenblamedformakinglifeworseinBritain:intheearly1970s,whentherewasalsoahousingpricespike.
![Page 744: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/744.jpg)
Orthodoxeconomistssuggestthathousingcrisesarerareandareoftenprecededbyothereconomicshocks,butrecentanalysishasfoundthatinthelastmajorworldfinancialstormtohaveoccurredpriorto2008,thatoftheearly1970s,ahousingcrisisprecededlatereconomictroubles:‘Conventionalwisdomhasitthatonlytheoilpricehikeinthefallof1973mattered.Butitturnedoutthatthepropertycrashprecededtheoilpricehikebysixmonthsormore,andtherecessionwaswellunderwaybythefall.’63Inananalysiscarriedoutsincethe2008crash,ProfessorDavidHarveyofCityUniversity,NewYork,hasre-evaluatedwhatoccurredin1973andsuggestedthatitwasproblemswithgrowinghousingdebtthatmattered
![Page 745: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/745.jpg)
morethanoil.Healsofoundthat,workingbackintime,asimilarstorycanbetoldofthe1929crash,whichwasprecededbyafallinthevaluationsofrealestatesecurities,withtheresultthatbuyers’loansbecameunsecured.InFloridatheapparentvalueofbuildingpermitshadincreasedeightyfoldinthesixyearsbetween1919and1925,andUShousepricesrosefivefoldduringthosesameturbulentfewyears–allthispriortothe1929crash.Peopleatthetimetalkedofmigrantsandimmigrantsasacauseoftheproblems,when,inhindsight,itisclearthattheywerenot.Aslumpcancomeatanytime,or
notforyears.WhenIwasfirsttypingthesewordsIread,inFebruary2013,thatthePeople’sBankofChinahad
![Page 746: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/746.jpg)
justbeenreportedtohaveinjected450billionyuan(US$72billion)intomoneymarkets.Apparently‘itwasthelargest-everone-dayliquidityactionconductedbythecentralbank.’64Thereasongivenwastosteadynerves,assomanypeoplehadwithdrawnmoneytobuygiftsfortheChineseNewYear.ButwhywassomuchmoreneededforthisNewYearthanforthepreviousone?Whatevertheeventthatcausedthatslump,itwillalmostcertainlynotbeNewYeargifting.Thereisalwaysanextslump,butitsrealtriggerwillprobablynotbeobviousatthetime.InNovember2012,asIwasat
firstpullingtogethermaterialforthisbook,Ireadthat‘AccordingtotheestateagentKnightFrank,theprice
![Page 747: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/747.jpg)
ofprimeresidentialpropertyinLondonhasincreasedby49%sinceMarch2009–fivetimesmorethantheUKasawhole.’65Likemanyothers,IwonderedthenwhetherLondoncouldbebecoming,financially,aseparatecountry–orwhetherthiscouldbeyetanotherbubble.Thelatterhasmoreofaprecedent.Well-informedcommentatorswritingaboutthattimethoughtanewslumplikely,butthecannyonesneversaywhenitwillhit;theyjustkeeprepeatingthateventuallyitwill.Forexample,DavidBlanchflower,thebest-knownformermemberoftheBankofEnglandmonetarypolicycommittee,saidinJanuary2013that‘Myguesswouldbethatnominalhousepriceswillhavetofallbyafurther15%or
![Page 748: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/748.jpg)
so.’Asalways,hedidnotsaywhenthatfallwouldtakeplace.66
HighhousingpricesintheUKaremaintainedbythefeelingthatpayingrentislikethrowingmoneyaway.Thisfeelingisgeneratedbytworealities.First,theamountofrentthatmostpeoplepayfarexceedsthevalueoftheservicetheyarepayingfor.Largelyunregulatedlandlordstrytheirhardesttomaximizetheirincomesandtominimizetheexpenditurethey‘lose’onmaintainingthepropertiestheylet.Iftheydidnotdothis,facedwithcompetitionfromthemoreunscrupulousmajority,theywouldhavelowerfinancialresourcestofallbackonintimeswhenitishardertogettenantsandtheywouldbemorelikelytohavetosellupandleavethe
![Page 749: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/749.jpg)
business.Thusrentcontrolisneededtobringdownrents,todeterthelandlordsmostinterestedinmakingaprofitandmostintentonofferingabadservice.Suchcontrolswouldinturnbringdownhousingprices,resultinginmorepeoplebuyingwhentheyneededtoandfewerlookingtorentunlesstheywantedto.Second,ever-risinghousingprices
canmakerentingfeellikethrowingmoneydownthedrain.Peopleaskwhypayrentwhen,ifyouinsteadpayamortgage,youcouldeventuallyownapropertyworthasmallfortune.Oneansweristhatifhousingpricesfall,thatsmallfortunecouldturn,withaddednegativeequity,intoalargedebt.Wherehousepricescontinuedtofallinthe
![Page 750: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/750.jpg)
northofEnglandandinWalesandScotlandduring2013,theydidsopartlybecausepeoplewhocouldbuycarriedonrenting,astheydidnotwanttopurchaseanassetthatwasshrinkinginvalue.Incontrastwithmuchofthenorth,
housingpricesinsouthernEnglandarerisingrapidlyasItype(inlate2013),buildingup(atsomepoint)towardsaslumporacrash.Thissurgeinjust-about-realizabledemandisprincipallybecause,ascurrentlyconstitutedintheUK,freemarketprivaterentingencouragespeopleandbusinessestobeortobecomebadprivatelandlords,notjustthroughchargingrentthatistoohigh,butalsobynotofferingtermsthataresecureenough.Peoplerentingsocialhousingnowalsoface
![Page 751: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/751.jpg)
agrowinginsecurityoftenure.Governmentcansuddenlychangetherulesatwill,makingpeoplefacefinesand,ultimately,eviction.Rentingingeneralfeelsincreasinglyinsecure.AsDuncanBowieoftheUniversityofWestminster(locatedatvarioussitesintheheartofLondon)succinctlyexplains,the‘privaterentedsectorisineffectderegulated.Therearenorentcontrols;nominimumsecurityoftenure,andstatutoryregulationofminimumstandardsislimitedtohousesinmultipleoccupation…[and]islargelyineffective.’67
Payingmoreforhousingmeanslessisavailableforallothercommitments.Thenumberofbabiesbeingbornworldwideiscurrentlyslowingatitsfastest-everrate.In
![Page 752: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/752.jpg)
richercountriespeoplepartlyblamehousingcostsforhavingfewerchildren.InthedensestcitiesinpoorerAsia,andnotjustinChina,whereithasbeenmandatory,onebabypercoupleisnowthenorm.68
Whateachgenerationspendsmostofitsmoneyonchangesovertime.Ourgrandparentsspentfarmoreontheirfoodthanonhousing;ourparentsoftenspentmoreoncarsthanonhousing.We,however,spendmoreonhousingthanonanythingelse.Ourchildrenmay–onaverage–spendmoreoneducationunlesstheycanstopthatparticularbubblefromforming,butthatisasubjectforafuturebook.Mortgage-lendersusepeople’s
worriesaboutpayingevenhigherrentsinthefuture,andthecarrotof
![Page 753: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/753.jpg)
theprospectivewealth,toenticethemtotakeoutverylargeloans.Theydon’tpointoutthat,evenatlowinterestrates,borrowerswilloftenhavetopaybackatleasttwicethevalueoftheloanbeforetheyactuallyownthepropertyoutright.MostborrowersintheUKandtheUShavelittleideawhattotalsumtheywillordidenduppayingback,becauseinterestratessooftendramaticallyriseandfalloverthetwenty-five-orthirty-yearlifetimeofatypicalmortgage.Theyalsohavelittleideaofwhatthefinalvalueofthepropertytheyarebuyingwillbe.Butpeopletendtobeoptimistic.Inresearchingthisbook,Ihave
talkedtodozensofjournalistsandhousinganalystsaboutwhattheythoughtmighthappentoUKinterest
![Page 754: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/754.jpg)
ratesinthenearfuture.Alargegroupthoughtthoserateswouldnotriseatall,or,iftheydid,byjustafractioninthecomingyears.Almostallweremiddleaged.AlmostalllivedinLondon.Andalmostallhadmanyyearsofmortgagepaymentsahead.Hardlyanyofthesecommentatorsrented.Theyneededinterestratestoremainlow.Thus,thereisagroup-thinkoperatinginhousingtodaythatisunderstandablebutdangerous.Itprevailsattheverytopofthesupposedpyramidofunderstanding,amongexperts,whothenhelptomaintainanoptimismaboutthefutureofhousingthroughoutsociety.Rarelyarecommentatorsaskedtoseriouslyconsidertheactualprobabilities.
![Page 755: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/755.jpg)
Inthesamewaythatpeopledon’tconsider(ifinapartnership)thattheirmarriageorotherarrangementmaybreakup–althoughthelikelihoodofthathasneverbeenhigher–theyoftendon’tconsider,whenbuyingproperty,thatoneofthetwojobsneededtopaythemortgagemightdisappear;thattheymayneedorwanttomoveearlierthantheycurrentlyanticipate;thattheyareliableforalltherepairsandupkeepontheproperty;orthattheycanfallill.Peoplearemadetoworryaboutwhatmighthappeniftheyweretodie,butnotaboutallthosemuchmorelikelyunfortunateeventsthatcanhappentothem.Thelikelihoodofdeathduringthelifeofamortgageislow,butlendersstillmakelifeinsurancemandatorywhen
![Page 756: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/756.jpg)
amortgageistakenout.Theoriginalmeaningoftheword‘mortgage’inFrenchis‘deathcontract’.Otherformsofinsurance,suchasinsuranceifyoubecometoosicktowork,arenotmandatory.Strugglingborrowerscanmakemoremoneyforthelenderiftheyfallintoarrearsandhavetopaypenalties.Andrecentlylendershavemis-soldpaymentprotectioninsuranceonamassivescale–whichthenfurtherdetersborrowersfrominsuringthemselvesagainstillnessoranaccidentcurtailingtheirincome.Lendersoftenjustifylendingata
profit,andtryingtomaximizethatprofit,bysuggestingthatchargingatinterestrateswellabovethebaserateallowsthemtorewardsavers.However,thegapbetweentheratesatwhichbankslendandtheinterest
![Page 757: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/757.jpg)
ratesthattheyoffertosaversshowshowmuchtheycreamoff.Justcomparewhattheyoffertoday.AsItype,aten-yearfixed-ratemortgagecostsabout4%ayearonthehighstreet,withafeeof£1,500toapply.Simultaneouslythebankofferingthisrewardsitssaverswitharatewellbelow1%,aratethatisbelowinflation.Lendersalsosuggestthatmuchof
theprofitthatbanksmakegoestoshareholders,manyofwhicharepensioncompanies;banksarethereforeindirectlyfinancingourpensions.Butmostpeopledonothaveaprivatepension,andpensionprovisionisincrediblyinequitable.Formostpeople,thegreatestwealthinequalitiesofallaretobefoundbetweendifferentgroupsof
![Page 758: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/758.jpg)
pensioners.Allthejustificationsforkeepingthestatusquoultimatelymakesenseonlyfortheveryfewatthetop.Ifyouarepoorlyhousedinmiddle
age,youarealsomorelikelytobepoorlyhousedasapensioner.Thegraphbelowshowshow,inBritain,thenumberofpropertiesonwhichloansarebeinggrantedremainsathalfthepeakof2007,whileremortgagingbecamefourtimeslesscommonafter2009thanitwasbefore2008.69Remortgagingisraisingafurtherdebtbasedonthesupposedlygrowingvalueofyourhome.Whenhomesdon’tgrowinvalue,remortgagingbecomesharder,buteveninthesouth-eastofEngland,wherehouseshaveapparentlyrisengreatlyinworth,
![Page 759: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/759.jpg)
banksarelessandlesswillingtolendmore:theyclearlythinkpropertypricesmightwellbeovervaluedbyatleast20%.ThatiswhytheChancellorsteppedintoguaranteethat20%inhisMarch2013budget.Thefallinmortgageborrowing
showninthegraphbelowisnotduetoasuddenincreaseinthriftamongthepopulation.Itwasinitiallymainlytheresultofgovernmentshavingcurtailedbanklendingsince2008,tostopthebanksbuildingupadebtmountainthatgovernmentwouldthenhavetounderwrite(ashappenedinIreland).Thisfallinlendinglargelyexplainstheslumpinbuyingdetailedabove.Manypeoplewouldstillliketobuytheir‘next’home,buthavenopossibilityof
![Page 760: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/760.jpg)
raisingthedepositandtheotherstart-upcostsrequired.HenceGeorgeOsborne’snew‘help-to-buy’initiativeinhisMarch2013budget,guaranteeingloansonallpropertytocoverfallsofupto20%oftheircurrentvalue–thevaluethatthebanksbelieveisn’tthere.Ifthevaluewasthere,thebankswouldlendthemoneywithouttheneedforthoseguarantees.Thegovernmentiscoveringtherisktothebank,nottherisktothebuyer.Thebuyerisbeingencouragedtotakeahugerisk,oneevenbanksthinkisfoolhardy.
![Page 761: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/761.jpg)
Figure17.MonthlyapprovalsofloanssecuredondwellingsintheUK,2007–12.
IntheUSthefallinmortgage-lendingsinceitspeakhasbeenevenmoreprecipitous.In2005mortgage-lendingreachedapeak:overatrillionmoreUSdollarswerelentthanwerepaidbackthatyear.Butthenlendingfelllikeastonewiththecrashin2008,recoveredslightlyin2011,andfellagainin2012.When
![Page 762: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/762.jpg)
youlookatmortgage-lendingintheUSitisclearthattheeffectsofthecrashareongoing.TherewasariseinlendinguptoMarch2013thatlookedimpressiveatfirstglance,at38%,but,becauselendinghadfallensomuch,thisamountedtoonlyanadditionalmillionorsonewmortgagesinayear.Mostoftherisewasduetoremortgaging,aspeoplewerefindingithardertogetbyonsolittlemoney.Furthermore,blackandHispanicborrowerswhoaskedforsomeofthisnewmoneyweremuchmorelikelytobedeniedit,incomparisonwithwhiteorAsianapplicants.70Soifitwasarecovery,itwasarecoveryonlyforafavouredfew.IntheUS,mortgagorshavepaid
backsomuch,inaggregate,thatthe
![Page 763: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/763.jpg)
banks’mortgageliabilitieshavefallenineachofthepastfiveyears,despitetheenormousvalueofallthenewloansstillbeingmadeintheUS.Thisisthefirsttimesuchasituationhasoccurredsinceatleastthe1970s,andpossiblyever.Oneresultofthisisthatotherformsofconsumerlending,especiallycredit-cardborrowing,havebeenrisingrapidly.Non-mortgageUStotaldomesticlendingreachedanetpeakofover$117billionintotalcredit-cardandotherlending(incomparisonwiththeamountsbeingpaidoff)bythethirdquarterof2012.71Thisunsecuredborrowinghadbecomehigherthanatanypointsincetheyear2000,anditisstillrisingtoday.Theinterestratesonunsecuredloansareusuallymuchhigherthanthose
![Page 764: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/764.jpg)
onmortgages,soevenmoremoneythenhastobepaidback.Itisworthbeingalittlewaryofall
thesedebtestimates,despitetheirapparentprecision.InMarch2009theFederalReservereportedthatbankshadlent$35billionlessonmortgages,intheyear2006,thanthosebankshadthoughttheyhad!Furthermore,theFed’spublishedfigureonmortgage-lendingfor2008wasinitially37%adrift.72Thesediscrepancies,ofbillions,aresomewhatunderstandable,butitwouldbewrongtoassumethattheFederalReservehasaclinicallyaccurategraspofcurrentevents,oreventhatthebanksreportingtoitalsoconcurrentlyknewtheexactstateoftheirownmortgagebooks.Thecurrentfall(shownopposite)
![Page 765: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/765.jpg)
couldbefound,infuture,tobefarsharper,tobegoingdeeper,thanwhatisdepictedhere.
Figure18.Additionaldebtaddedannuallybysector,UnitedStates,1979–2012.
ThevastbulkoftheUSmortgagedebtmountain,lentbetweentheyears2000and2007–some$6trillion–remainsunpaid.Muchmayneverberepaid,butUSbankshavebeenrecoupingmorethantheyhave
![Page 766: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/766.jpg)
lenteveryyearsince2008,althoughonlybecausetheyhavebeenpreventedfromlendingyetmoreonhousingbytheUSauthorities.Theywouldlendfarmoreiftheyknewtheauthoritieswerepreparedtounderwritewhatevertheylent.ItismostlyonlybecauseUSregulationhasbeenalittlemorelaxonotherformsofconsumercredit,suchasaffectsthosecreditcards,thatlendinghasbeenabletogrowagainintheUS.In2013thosereportsofrisingmortgage-lendingreferredtoaboveweremostlyforremortgaging.Ifbankscan’tlend–especiallyonnewpropertyandtofinancehomemoves–theycannotprofit;butiftheycannotrecoupalmostallthattheylend,theyalsofail.
![Page 767: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/767.jpg)
IntheUKweneedtolearnfromtheUS,andnotmimicitsomuch.SomanyofourmajorbankswereinthegripofUSinstitutionsbytheearly2000sthatwealmostblindlyfollowedUSfinancialpolicy–insomeareas,toourdetriment.Forexample,theUSdoeshavemorepropertytaxesthantheUK,butwedidn’tchoosetocopyanyofthoseandreviseourout-of-dateandveryunfaircounciltaxsystem.However,whathappensinmanystatesintheUSatleastshowsthatgreaterpropertytaxationispossible,ifonlytogetmorecurrentlyunusedpropertyintouse.InNewHampshire,wheretotaltaxationislowerthaninforty-threeotherUSstates,propertytaxesare,onaverage,about$2,424whencalculatedper
![Page 768: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/768.jpg)
personperyear.Thesametaxischargedonahomeusedbyonepersonasitisonasimilar-sizeddwellingcontainingsixpeople.73
Greatertaxationisthereforeleviedonapersonlivinginanunderusedproperty,onsecondhomes,onholidayhomesandonemptycommercialproperty.ThishappensinmuchoftheUSalready,andintheUKitwouldencouragethoseinpossessionofsuchpropertytoputittouseandnotletitremainempty.IntheUK,makingthecounciltax
systemmoreprogressiveisentirelypossible.Asoutlinedabove,itcouldbedonebyextendingthebandstocoverpropertiesworthmanytensofmillionsofpounds.Suchareformwouldbeasteppingstonetowardsaproperlandvaluetax,andisjustone
![Page 769: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/769.jpg)
ofmanywaystodealwiththevolatility,theinequityandthedisparityoftheUKpropertymarket.Itcouldalsohelptoreducerentsforthevastmajoritywholiveinmodestproperties,becausewhenpropertyvaluesfallitishardertojustifychargingsuchhighrents.Theintroductionofafairlandand
housingtax,risingtofarabovethecurrentmansiontaxthreshold,mighthelptoreducespeculation,andalsohelptocontroltherisesinpropertyvaluesinLondon,therebymitigatingthesizeofthepropertybubbleandhopefullycushiontheimpactofthatbubblewhenitbursts.However,toenactanynewpolicywehavetostopbelievingthatwhatwillbewillbe,andthatwearepowerlesstointervene.
![Page 770: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/770.jpg)
![Page 771: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/771.jpg)
7
Speculation
Rightmovesaidhomepriceswillincrease6%thisyearinsteadofthe4%itpreviouslyestimated…Nationally,valueswereup4.5%thismonthfromayearearlier,whilepricesinLondonwere8.2%higher,[but]askingpricesfellby7.4%onthemonthintheCityofWestminster.Theydeclinedby5%inCamdenandby3.3%inKensington&Chelsea.TheaverageaskingpriceintheUKis245,495pounds($389,300).
–BloombergNews,September20131
Justbeforethesmall1989crashintheUKhousingmarket,andinanuncannyechooflate2013,house
![Page 772: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/772.jpg)
priceestimateswererisingrapidlynationally,buttherisehadstalledinLondon.Then,asifoutofnowhere,pricesbegantofall.Firsttheyfellinthecentreofthecapital,inautumn1988.Iknowbecause,intheearly1990s,aspartofmyPhDstudies,withdatafromthelargesttwobuildingsocieties,Imappedpricesin10,000wardsforeveryyearofthe1980s.Iusedanewmappingtechniquethatinvolvedthegenerationofverydetailedareacartograms,whichletyouseeallthoseindividualstatisticstogetherononepage.Icouldseethefluctuationsinpricesindifferentareas,likeanestateagentwithknowledgeofhisorherparticularpatch,butIcouldseethemforeveryneighbourhoodineverytownandineveryruralarea
![Page 773: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/773.jpg)
acrossthewholecountry.Iwasnolongerlookingatalistoffigures,butatanactualpicture.Todescribethatpicturewithafewstatisticswouldhavebeensimilartodescribingapaintingashavinganaveragecolourofred.Thehousingpricepictureisnever
uniform:therearelocalexceptionsandregionalexceptions.Theregionalexceptionsdonotneatlyfitanyadministrativeareas.Igottobethefirstpersontoseedarkspotsgatheronthemapsofhousingpricechangesupto1989.Iwasabletosee,ingreatdetail,thegeographicalprogressofahousingmarketcrash.Negativeequityspreadlikeanepidemicacrossthecountry,slowly,thenveryquicklyandoftenunpredictably.Fewplaceswere
![Page 774: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/774.jpg)
spared.Recoverywasgradual.LaterImappedthedatafor1993.In25%ofwards,25%to50%ofpeoplewhohadboughtwithamortgagebetween1988and1991wereinnegativeequity;inafurther12%ofwardsitwasover50%.Andwiththenewcomputer-generatedcartogramsIcouldseewhereeachofthosewardswas.Bythen,althoughmostwereinthesouth,therewerestillscatteringsinthenorth,ScotlandandWales.Backinthe1980sand1990sonly
afewpeoplecouldmonitorlocalhousepricechangesacrossthewholeofBritain.2Todayfarmorepeoplehaveaccesstothedata.But,inJanuary2013,justninemonthsbeforetriplingitsforecastofthecomingnationalriseto6%,thepropertyexpertsatRightmovehad
![Page 775: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/775.jpg)
suggestedtheywouldbeonly2%.3
InearlysummerRightmoveincreaseditsestimateofannualhousinginflationto4%,inautumnto6%andtheninDecember2013theyincreaseditagain,to8%4.Speculationisrife,theforecastsareunreliableandactualhousingpricesfluctuate.ThesameishappeningintheUS
today,anditisnotonlytheforecaststhatfluctuatewildlybutalsothereportingofthem.On24September2013theFinancialTimestitleditsstoryonthereleaseofonesetoffigures‘PaceofUShousepricerisesslowsasmortgageratesclimb’.5TheBBChadreportedthesamedatathesamedayundertheheadline‘UShousepricesinbiggestannualriseforsevenyears’.6ByDecember
![Page 776: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/776.jpg)
2013theLosAngelesTimesby-lineread:‘November’smedianof$385,000hasbeenaboutthesamesinceJune.Salesslump’.7
Attheheartofthehousingcrisis,aswiththesituationmorebroadly,isspeculation.Theproblemrangesfromthosewhoseektomakeaquickbuckbylendingintheshortterm,topeoplewhoaredesperateforhelptopaytherentormakeamortgagepayment,throughtothosewhoseektomakeaprofitinthelongterm,moreslowlyandsteadily–alloutofourbasicneedtobehoused.Similarsortsofspeculationhad
occurredpreviouslyinBritain,mostrecentlywhencreditbecamemoreeasilyavailableafterthesuddenderegulationoffinancialmarketson27October1986:the‘BigBang’.
![Page 777: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/777.jpg)
Afterthatpeoplebeganoncemoretofallbehindondebtrepaymentsinwaysthathadnotbeenseensincethe1930s;enoughtimehadpassedforthelessonsofthe1930stohavebeenunlearned.InotherEuropeancountriesgovernmentsweremorecareful.ButinBritain,wheretherewasadesiretobeeconomically‘great’again,suchcautionwasviewedastimidity.Similarly,intheUS,whichwasstrugglingtomaintainitseconomicgreatness,theoldruleswererelaxedfromtheearly1980sonwardstoallowshort-termprofitstobemaximized.Earlierinthisbookthehousing
turmoilofthe1930sand1970swasdescribed,anditwassuggestedthatwecouldlearnfromrememberingthosetimes.Itwasalsosuggested
![Page 778: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/778.jpg)
thatperhapswecanbeforgivenforforgettingthem,givenhowlongagothosecriseswere,butmostolderadultsshouldbeabletorememberthe1980sandtheperiodsincethen.InBritainthe1980sendedwiththatsmallhousingmarketcrash,butwetooklittlenoteofitatthetimeotherthantoseeitasafewtoomanypeopletryingtobuywhenpricesweretoohigh,ofteninanattempttosavealittletaxbypurchasingbeforeSeptember1989.AfterthatdateonlyonememberofacouplecouldclaimMortgageInterestReliefatSource(MIRAS)ontheirtax.ThatparticularsubsidywasendedentirelyinApril2000.However,inhindsighttherushtogetinbeforeMultipleMortgageTaxReliefendedwasnottheprimecauseoftheover-
![Page 779: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/779.jpg)
exuberanceof1988.Rather,itwastheavailabilityofnewmoneytoborrowinthelate1980sthatwasmostlytoblame.Worryinglywehavemorenewmoneythaneveravailablenow,butthistimeitisunderwrittenbythegovernment.Ifyouweretryingtosetupthemarketforagreatfall,youcouldhardlydobetterthanthis.Intheninetiesandnoughties,
increasedfinancialspeculationandthecreationofmoreandmorenewmoneybybanks8ledtoevergreaterlending,rapidlyrisingpricesandrents,increasedindebtedness,morearrearsandariseindefaulting.Massdefaultingonmortgagepaymentswascurtailedonlybyadramaticreductioninbaselendingrates.Thiswasdonetotrytokeeptheshowon
![Page 780: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/780.jpg)
theroadinthehopethatsomehowtherewouldbeareturntothenewnormal.Butwhatwehavebeenlivingwithsincehasbeenfarfromnormal:housinginsecurityhasincreased,andgovernmentshavebeencreatingnewmoneythroughquantitativeeasing.Weknowthiscan’tcarryonforlong,ourgeneralsenseofsecurityhasfallen,andcollectivelyevenourhealthhasbeguntosufferinwaysthatcannowbemeasured.Buttheworseitgets,themoretheyenticeustoborrow.Ultimatelyspeculationinhousing
iswrong,becauseitharmshumanhealth.Itunnecessarilyincreasesrentsandprices.Livinginfearoverwhetheryouwillbeabletopaytherent,orkeepupthemortgagepayments,slowlyhacksawayatyour
![Page 781: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/781.jpg)
senseofbeingpartofsociety,makesyouincreasinglyanxiousandharmsyourwell-being.Worryingthatthecarehomeyouarelivinginasanelderlypensionerisabouttogobustbecausethelandlordhasincreasedtherentistoworryabouthomelessness.Oldalternativestorentingbecomenecessaryagainasrisinghomelessnessissufferedbytheyoung:thefrequencyofsquattingrises;millionsmoreendupsleepingonfriends’sofasforaweek,ortwo,ormore.Butforthosewithchildren,andforthosewhoareolder,directactionsuchassquatting(orindirectactionsuchassofa-surfing)islessofanoption,andmanypeoplegetintogreaterandgreaterdebt.
DEBTANDARREARS
![Page 782: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/782.jpg)
It’sshockingtothinkthatsomanyfamilieswillbestartingtheNewYearwithahugeweighthangingoverthem,trappedinadailystruggletokeeptheirhome.Paydayloansmayseemlikeaquickfix,butthehugeinterestchargesmeanthingscanquicklyspiraloutofcontrol.
–CampbellRobb,Shelter’sChief
Executive,20139
InBritain,MargaretThatcher’sfirstgovernmentputthecountryintolong-termdebtbyallowing,evenencouraging,exportmanufacturingindustriestofail:shipyards,coalmines,steelplantsandcarfactories.Insteadhergovernmentusedtheprofitsmadefromexportingoiltocuttaxes,especiallytofinanciers.Exportingoiltooklittlemanufacturingskill;itwasnotthat‘hi-tech’.Thatcher’sgovernmentcouldhaveusedthemoneyto
![Page 783: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/783.jpg)
supportmanufacturinginsteadoftaxbreaks,aswasdoneinmainlandEurope;butsomelargemanufacturingandextractionindustrieswereheavilyunionizedandtheunionswereThatcher’senemynumberone.GovernmentsinotherEuropeancountriesdidnottakesuchanantagonisticapproachtoindustry,nordidtheygivesomanytaxbreakstofinancialservicesandthepotentialcustomersofthoseservices.BankingintheUKbecamepartofthe‘financialindustries’,asifbankersweresomehowindustrious,asifmoneywerehackedoutofrock.InseveralotherEuropean
countriesmanyoldindustriesevolvedintonew,cleanerandyoungerbusinesses.ButintheUK,asaresultofThatcher’s
![Page 784: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/784.jpg)
deindustrialization,‘Britainlastranacurrent-accountsurplusin1983andhasbeenindeficitsincethen,borrowingmoneyfromcountrieslikeChinaandsellingcommercialassetstoforeigners.’10ThehugeriseindebtinBritainsincethe1980sisalsodirectlylinkedtothedecisionstakenthenandtothegrowingsocialinequalitythatresulted.Bankersgotrelativelyricher;workersbecamerelativelypoorer.TheproportionofGDPgoingtowagesfellandthattoprofitsrose.Fallinginbetweenthatgrowinggap,manypeoplegotintomoreandmoredebttotrytomaintaintheirpositiononaladderofincomeandwealthwhosegradientwasbecomingprogressivelysteeper–hardertoclimbandeasiertoslipdown.
![Page 785: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/785.jpg)
ItisbecauseoftheThatchereconomic‘revolution’thatpayingforhousingforyoungadultsinBritainisliketryingtorunfasterandfasteronahamsterwheel.WithThatcher’sderegulation,awiderspreadofpeoplewerepermittedtotakeouthomeloansonmoreexpensiveproperties.Becauseofthis,anewphenomenonbeganinthe1980s:largenumbersofpeoplegettingintoarrearsontheirmortgages.ThathadbeenquiterarebeforeMrsThatcher’sgovernmenttookcharge.11Butmoreandmorethoughtthattheyhadtospeculatetoaccumulate,andthatthemostexpensivepropertieswouldrisethemostinvalue.Thetemptationtoborrowmorethanyoucouldreasonablyaffordwasoftentoo
![Page 786: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/786.jpg)
much.Thenpricesroseastheresultanditbecamenecessarytoborrowjustalittlebitmoreagain,especiallyinmanyareasofthesouth.Peoplestartedtohavedoubtsaboutthedoubtsattachedtoborrowing.‘Don’tbeaskinflint’,theywouldsay.Thisiswhatyouhavetodo.AsoneofThatcher’s
contemporariesputitshortlyafterherdeath:‘Shecreatedtoday’shousingcrisis,sheproducedthebankingcrisis,shecreatedthebenefitscrisis…Everyrealproblemwefacetodayisthelegacyofthefactshewasfundamentallywrong.’12However,itwouldgrosslyoverstateherindividualabilitiestosuggestshedidallthesethingsalone.Shehadhelp,andshefollowedtheguidanceofherlike-
![Page 787: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/787.jpg)
mindedcolleaguesandtheteachingsofafewoldermenwhohadatheorythatpromotingindividualselfishnesswould,overall,increasethecommongood.Theygotachancetotestthattheory,anditwasthatidea–Thatcherism,promotingselfishnessabovethecommongood–whichturnedouttobewrong.Tobeinarrearsmeanstobe
behindinyourmortgagepayments.Ahighlevelofarrearsisnotnecessarilyasignofwoe.Whenhousingpricesarerising,buyersbeinglatewiththeirpaymentsisoftenseenaslessofaproblem.Theyandtheirlendersknowthatthevalueofthehomesisgoingupandthatthebuyers’shareoftheequityinthepropertiesisgrowing.Somemayviewafewmonths’arrearsasaform
![Page 788: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/788.jpg)
ofsecuredborrowing,cheaperthanusingcreditcards,althoughtheywouldusuallydobettertomakeaformalagreementwiththeirlendertoextendtheirmortgageratherthanincurringpenaltyfees;but,eveniftheydon’tmakesuchaformalagreement,theywilloftenstilldobetterincomparisonwithtakingoutotherunsecuredloans.DebtgotoutofhandintheUK
almostassoonasfinancialderegulationbeganin1986,sothatby1989therewasthatsmallhousingmarketcrash.Manyyoungerbuyerswithonlysmalldepositsgotintonegativeequityinthelate1980sandveryearly1990s,whenpricesfell.Theywerelefteitherwithadebtthatcouldnotbecoveredbysellingtheirhome,orwereunabletoremortgage
![Page 789: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/789.jpg)
tocoveranynewdebts,includingmortgagearrears.Intheaftermathofthecrash,the
proportionofpropertiesbeingrepossessedbythebanksroserapidly,tonearly1%ofallthedwellingsthatthebankshadontheirbooks.That1%beingrepossessedinayearwasaverylargeshareofallproperties.Itrepresentedasignificantproportionofallpropertieschanginghandsatanyonetimeandresultedinpartsofthemarketbeingfloodedwithpropertiesbeingsoldoffatauction.Thatinturnreducedpricesfurther.Oncepriceshadfallenslightly,in
1989,formanypeopletheirarrearsbegantoriserapidlytoo,andwhenpricesarefalling,risingarrearsarefarmoreproblematicasfaras
![Page 790: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/790.jpg)
lendersareconcerned.Peoplewhowouldnormallyhavesoldtheirhomeataprofitiftheycouldnotmakethepayments,andthenboughtacheaperone,orwhowouldhaveremortgagedtoborrowmoreinhardtimes,couldnot.Unlikenow,atthattimeitwasusuallyonlyafterafewmonths’worthofarrearshadbeenrecordedthatproceedingstorepossesswerebegun.Butasthevalueofdwellingsdiminishedfollowingthe1989housingpricefallsandnegativeequityrose,lendersbecameincreasinglyreluctanttotakeoverproperties,torepossessthem.So,by1995,upto4%ofallUKmortgageswereinarrearsof2.5%ormoreoftheoutstandingmortgagebalance.Butourcollectivememory-spansappeartobegettingshorterwhenit
![Page 791: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/791.jpg)
comestothedangersofhousingspeculation,andby2005wehadlargelyforgottenthathousingcrash.Speculationworksonlybecause
ourmemoriescanbesoverypoor,butisitreallypossiblethattheyaregettingpoorerwithtime?The1930shadbecomeadistantmemorybythe1980s.Thelessonoftheearly1990swasalsoquicklyforgotteninthe‘boom’yearsofthenoughties.Ourcollectivememorydoesappeartobebecomingshorterandshorter,asdothegapsoftimebetweenboomandbust.Perhapsthatisbecausemorepeoplethaneverbeforearemakingmoneyoutofhousing,andmostofthemdonotwantustothinkaboutthepossibilitiesoffailure.Irememberthe1989housing
marketfallsonlybecauseImadeso
![Page 792: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/792.jpg)
manymapsofthegeographyofthemarketcrashduringmypostgraduatestudies.Iworryabouthistoryrepeatingitselfnowbecausemyfirstresearchjobwastostudytheeffectsonpeopleandneighbourhoodsofnegativeequity.13Mostpeoplewillhaveforgotten,andanyoneunderfortytodayistooyoungtoremember.Aspricesroseandjobsreturned,thelevelofarrearsfell,sothatby2004under1%ofallmortgagesrepaymentswereinarrears–whichmeantthatmorethan99%ofallborrowerswereuptodatewiththeirmonthlypayments!Yetin2008arrearsjumpedto2%,fallingagainonlyasthehistoricallylowinterestratesbroughtthemundercontrol.14
![Page 793: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/793.jpg)
Whatwillhappeninthenextfewyearscanonlybeguessedat–butwecanatleastguesswiththebenefitofhindsight.Thebanksappeartohavesomehindsight,whichiswhytheywillnotlendlargemortgagestopeopleonnotveryhighsalaries,orwithoutalargedeposit,unlessthegovernmentguaranteesthatanylossesthebankmakesafterrepossessingandresellinganypropertyarereducedbyupto20%oftheoriginalpurchaseprice.Inpracticethismeansmostlikelyreducingthepotentialbanklossestozero.Anyincreaseininterestrates,
unemployment,oranyfuturefallinhousingprices,islikelytoseearrearsandthenrepossessionsriseverymuchmorequicklythanthe
![Page 794: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/794.jpg)
officialforecastscurrentlypredict.Theseshort-termforecastsareshowninthegraphbelow.Thosedotsstretchinginto2015intheBankofEngland’sreporthavebeenputtheretoreassure.Noonewhoknowsthehistoryofhousingseesthemasreliable.TheBankofEnglandusedtoputwideconfidencelimitsarounditsfutureprojections.Itnowtendsnottoshowerrorbarsofuncertaintyforfearofcausingfear.Italsonowtendsnottoprojectveryfarahead,asthefewdotsinthegraphoppositeindicate,limitingitshorizonstoavoidtheriskofbeingprovedverywrongveryquickly.Ontheroller-coasterwearecurrentlyriding,nobodyknowswhatwillbearoundthecorner.Wereallyhaven’tbeenherebefore.
![Page 795: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/795.jpg)
Figure19.UnitedKingdommortgagearrearsandpossessionrates,1990–2015.CouncilofMortgageLenders’projectionsforendof2012
arealsoshown.
Inearly2013moneyforlendingwasstilldryingup,andbankswerebecomingmoreandmoreintentongettingbacktheirmonies.Theytoldhundredsofthousandsofpeopleholdinginterest-onlymortgagesthatshouldtheywanttoalteranyoftheir
![Page 796: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/796.jpg)
arrangements,theywouldneedtoconverttheirmortgagesintorepaymentones.Thiswillincreasethoseborrowers’mortgagepayments–and,presumablyforsome,theirarrears.ThengovernmentsteppedinwiththeMarch2013budget:moremortgagesweretobeunderwritteninthenear-future,somorecouldbeoffered,butinterest-onlymortgageswouldnolongerbeoffered.Asvolatilityrises,afewmonths
canseemlikeanageinfinance.Backin2012,onecommentatoronthewebsite‘Moneysupermarket.com’reportedhowthecheapermortgagedealsintheUKwerecomingtoanend.ShefoundthatbyNovember2012therewereonly211interest-onlydealsavailablefrom27lenders.Ayear
![Page 797: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/797.jpg)
earliertherehadbeen485suchoffersavailablefrom42lenders.Butshealsofoundthattherehadbeennofallintheoffersofinterest-onlymortgageson‘buy-to-let’homes,onloanstolandlords,‘asthesedealsarenotclassedas“residential”’.15Justhowlongcurrent‘businessasusual’willremainusual,andlandlordswillstillbeallowedtoborrowatcurrentlowinterestrateswithoutalsohavingtorepay,remainsanotheropenquestion.InSeptember2013theWestBromwichBuildingSocietyincreaseditsratesforexistinglandlordcustomers,causinggreatanger,asthelandlordshadthoughtthoserateswerefixed.16Asdetailedabove,governmentalsounderwritesthebankswhenlendingtothem,againencouragingspeculation,until
![Page 798: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/798.jpg)
suddenlyaneventlikeahikeininterestratesdampensenthusiasm.Becausehousingpricesarestillsohighincomparisonwithwages,mostfamiliescontinuetofinditveryhardtopaythemortgageonanewlypurchasedhome,evenatlowinterestrates.Toavoidarrears–ormorelikelytoavoidthatthirdorfourthmissedmortgagepaymentthatmightstartrepossessionproceedings–peopleareenteringintoevenriskierformsofborrowing.Bytheendof2012almostamillionpeopleintheUKhadusedapaydayloantocovertheirrentormortgage;afurther2.8millionusedanunauthorizedoverdraft;some7.8millionwerestrugglingtopayfortheirhousing,ofwhich1.4millionwereslowly(orquickly)fallingbehindwiththeir
![Page 799: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/799.jpg)
payments.17Theresultisaninevitableriseinrepossessions.AsJanetHunterputitinspring2013,onbehalfoftheHousingRightsService,‘increasingnumbersoffamiliesarelosingtheirhomes.Wearestrugglingtocopewiththisandunfortunatelywecannotseethesituationimprovingforsomeconsiderabletime.’18
Whilesomearemakingfortunes,othersgotothewall.First,familiesfailtomakethat
onemortgagepayment.Thenextmonthitisharder.Therearesuddenlytwopaymentstomake,andthereasonwhythefirstwasmissedhasnotgoneaway.Thingshavebecomeevenworsethantheywerethemonthbefore,whilethestressofbeinginarrearswillnothavehelped.
![Page 800: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/800.jpg)
Thencomesthethirdmonth,andpeopleasktheirfamilyforhelp.Inthefourthmonththeyaskfriends.Theysaythattheyhaveaproblemwiththeboiler,needpetrolforthecar,butthefriendscanguess.Andtheyworrywhatthosefriendsmustthinkofthem.ButthiscurrentspateofproblemsdidnotstartintheUK.Asmentionedearlier,19intheUS,
beinginarrearsonyourmortgagepaymentiscalled‘mortgagedelinquency’.ForEuropeanreadersitcanbeashockthefirsttimetheyseesuchlanguagebeingused(althoughsomeCreditUnionsnowdouseit).ForEuropeans,delinquencymeansanti-socialandusuallycriminalbehaviour,mostoftenassociatedwithjuveniles,a‘stage’someteenagersgothrough–
![Page 801: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/801.jpg)
butalsoawordgenerallythoughtunhelpfultousenowadays.Thepointatwhichmortgage-
lendersdecidetoforecloseonamortgageinarrearsisentirelyuptothem.Allalong,theywerethelegalownersofthepropertyyoumighthavethoughtwasyours.Theyheldthedeeds.Whenthehousingmarketisdepressed,lendersareloathtobeginproceedings,astheymightthenendupwithavacantpropertyontheirhands,andonethatisdecliningevenfasterinvaluethanitwaswhenoccupied.IntheUS,whenthehousingmarketcollapsedinthewakeofthe2008crisis,theannualincreaseinforeclosuresstalledabruptly,butarrearsspiralledupwards.AsFigure2ofthisbookillustrated(p.25),theaverage
![Page 802: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/802.jpg)
numberofdaystocompleteaforeclosureintheUSnearlytripledintheUSnationwide,fromaboutfourmonthsin2007tonearlyayearby2011.
![Page 803: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/803.jpg)
Figure20.RepossessionsandforeclosuresintheUnitedStates,2000–2011(millions).
![Page 804: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/804.jpg)
IntheUSthelegalprocessesinvolvedinalenderforeclosingonaloanandactuallyrepossessingthehomeareseparated.IntheUKthisisnotthecase–atleast,notyet.Herethegapintimebetweenrepossessionbeinggrantedbyacourtandthedateofevictionisusuallybrief.ButiftheUKweretoreplicaterecenttrendsintheUS,withbanksmorphingintolandlordswhenhousingpricesfall,thelanguageofhousinginBritainwouldultimatelychange.Thismightnotbeabadoutcomeoverall,aslongasbankswereforcedtobegoodlandlords,ortosubcontracttohousingassociationswithgoodtrackrecords.Forinstance,inareaswhereprices
havealreadybeenfallingforseveralyearsandarewellbelowtheir2007
![Page 805: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/805.jpg)
peak,Britishbankscouldbegintorepossesshomeswherethemortgageisinarrears,butthencometosomearrangementwiththeoccupiersofthosehomestoconverttheirownershipintoaformof‘tenancy’.Themortgagerescuescheme(onwhichmorebelow)wasthefirstmanifestationofthisideaintheUK.Banksdon’twanttobecomelandlords–itisnotasprofitableaslending–butcircumstancesmeanthattheymightbeforcedintosuchanarrangement.And,iftheybeginsucharrangementsforsomecustomers,whyshouldothersnotalsohavetheoption?Whyshouldbanksbeallowedtorepossesswhenthevalueofthehomehasrisenandtheycanmakegoodtheirliability,butnotallowthefamilytoremainas
![Page 806: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/806.jpg)
payingtenants?Itdoesn’tseemfair.Inaworldmadefairer,therentonapropertywouldbelowerthanthemortgage.InboththeUSandtheUKthatwasoncethecase.Theresearchbodythatreleased
thefiguresshowninthefigureaboverecorded1.15millionhomesbeingrepossessedintheUSin2011.20
Thiswastheestimatebasedonwhatitknewbytheendof2012.IntheUK,Sheltersuggestedthatalmost200,000familieswereatriskoflosingtheirhomesbySeptember2012,21whichisnotadissimilarproportiontothatfoundinNorthAmerica,giventherelativepopulationsoftheUSandtheUK.Shelteralsofoundthat,despitepropertypricesstillrisinginLondon,itwaswithinthatcity–especially
![Page 807: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/807.jpg)
withinthepoorerEastEnd–thattheriskoflosingtheirhomewasgreatestformortgagors.Thesame,bytheway,hadbeentruebackin1989.ByChristmas2012,some2.7%offamiliesintheboroughsofBarkingandDagenhamwereaffected;2.6%inNewham;2.2%inHaringey,HackneyandSouthwark.Unemploymentwasthemostlikelyimmediatecause.Ifthesefiguressoundlow,rememberthattheyareannual:itwilloftenbehappeningtodifferentsetsoffamiliesthenextyear,andtheyearafterthat.Toextrapolate:iffamilieswith
moreinsecurefinancesarenotreplacedbymorefinanciallysecurein-comers,then,werecurrenttrendstocontinueandcurrentlawsremaininforce,overhalfofallfamiliesina
![Page 808: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/808.jpg)
boroughlikeBarkingandDagenhammightbefacingevictionatsomepointoveratwenty-yearperiod.Thatisalong-termdisaster,notashort-termcrisis.Depressionthenfollowsthenormalizationofcrisis.InSpainthedisasterhasalreadybegun.Inthefiveyearsfollowing2007,foreclosureproceedingsbeganonsome420,000mortgagedpropertiesinthatcountry.Whatismore,amajorityofthoseactionsresultedinthephysicalevictionofthefamilylivinginthatproperty.Mostpeopledidnotmakethemselvesvoluntarilyhomeless.Theydidnotwalkout.Byspring2013over500Spanish
familieswerebeingevictedfromtheirhomeseveryday.Onefamily,whohadalreadypaid$98,000(€71,500,£60,000)ofa$323,000
![Page 809: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/809.jpg)
mortgageatthepointtheydefaulted,thenreceivedademandforanadditional$405,000aftertheirhomehadbeenrepossessed,becausethebankhadcontinuedtoaddinteresttotheirdebt.GarcíaLamarca,aresearcherbasedattheUniversityofManchester,hasdocumentedhowsimilaractionshavenotonlyledtohundredsofthousandsoffamiliesnowhavingnoplacetoliveinSpain,butalsototheirbeing(intheory)indebtfortherestoftheirlives.Atthesametime,sheestimatesthat‘20%ofSpain’stotalhousing–5.6millionhomes–remainsunoccupied.’22
However,peopleinSpainwillbeinlife-timedebtonlyforaslongastheyputupwiththepoliticiansthathavesanctionedsuchdebt,andtheirhomeswillremainunoccupiedonly
![Page 810: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/810.jpg)
foraslongastheclamourtousethemispresentedasunreasonable.InformedpoliticiansfromalloverEuropenowlookatSpainandworryaboutwhatcanhappeninhousing.Somealsolookforinspirationindealingwithwhatmightsoonhappenintheirowncountries.Britishpoliticiansandthosein
chargeoftheUKfinancialwatchdogsduringtheyears2010to2013reassuredthemselvesthatwhathappenedinSpainwillnothappenherebylookingatthequarterlypatternofrepossessionsandnotingnogreatrise.However,asoneinsiderexplainedittome,onconditionofanonymity,thedecisiontorepossessisatimingdecisionbythelender;andcurrentlywehaveasmuchofaproblemaswehadinthe
![Page 811: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/811.jpg)
early1990s,whenmanypeoplewereevicted.Thedifferenceisthatnowfarmorefamiliesareaffected,andthedebtperfamilytendstobeofalessersize.This,asfaraslendersareconcerned,meansthatit’snotyetworthwhiletakinganyactionagainstmostindividualfamilieswhoarebehindwiththeirpayments.Theposition,andthereforethe
statistics,canbecomecloudedwhenlendersappoint‘receiversofrent’in‘buy-to-let’cases:thisallowsthemtotakeoverownershipofthepropertyfromalandlordbutavoidsarepossessionorderbeingmade(asnooneisbeingevictedwhenthetenantsstayinplace);theforeclosure,asaresult,doesnotappearintheCouncilofMortgageLenders’repossessionstatistics.Thelandlordsstilllosethe
![Page 812: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/812.jpg)
property,buttheirtenantsdonotimmediatelylosetheirhome.23
However,inallthesesituationstheoccupantsremaininfearthatassoonasthebankthinksitcanmakeaprofitonthesale,itwillservenoticethatthetenancyistoend.Suchcasesareconsideredcontractscomingtoanend,andsoalsofailtofigureinrepossessionstatistics.Reassuranceisdangerousinthe
currentclimate.SomewithintheUKgovernmentareawarethatthecrisiscouldbeworsening,buttheyvacillatebetweenconcernoveragrowingbubbleandthefearofanimminentcrash.TheylookaroundtheUKandwonderhowonearthpricesandrentsinthesouth-eastcanrise,givenwhatelsetheysee.MuchnearerthanSpainisIreland,which
![Page 813: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/813.jpg)
washitbyapropertydisasterin2008.Theleadingsocialresearchinstitutetherefoundthatthecrashhadaffectedeveryaspectofsocialandeconomiclife,inbothurbanandruralcommunities.Itleftinitswakemasspropertyvacancyaswellasrenewedmassemigration.Therearehundredsofunfinishedestates,thousandsofemptyoffices,dozensofghostretailparksand,aboveallelse,‘atopographyofbrokenlives,shattereddreams,terminalindebtedness,and,forsome,chronicstress,anxiety,depression,andevensuicide’.24ItishardlysurprisingthoseinpowerintheUKaresoreluctanttotalkofthepossibilityofabubbleleadingtoacrash.Ifthehousingcrisisdoesworsen,
therepercussionswillbefarwider
![Page 814: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/814.jpg)
thanmanycurrentlyrealize.WeknowthisfromstudiesundertakenintheUS,whichactsasthemodelforwhatensueswhenyouallowmarketforcestoreignsupreme.Whenhousingfails,whatfollowsisadeclineinhumanhealth,evenforthosenotimmediatelyaffected.ResearchbyJanetCurrieof
PrincetonUniversityandErdalTekinofGeorgiaStateUniversity,publishedin2011,foundthat,amongthosewholivedinaneighbourhoodwheretherewasasuddenriseinpropertyforeclosuresandevictions,therewerestatisticallysignificantincreasesinurgentunscheduledhospitalvisits,almostallbymembersoffamiliesnotthemselvesactuallybeingevicted.Thisincludedanincreaseinvisitsforpreventable
![Page 815: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/815.jpg)
conditions;peoplewerelookingaftertheirhealthless,soendedupmakingmorefrequentemergencyvisitstohospital.Thepeopleoftheneighbourhoodwerebecomingmoreworriedandmoreillthroughworry,orwerelessabletolookaftertheirhealth.Theseresearchersalsofoundthattheestimatedeffectscouldnotbeaccountedforbyanyincreaseinunemploymentinthearea;norweretheythatcloselycorrelatedwithdeclinesinhousingprices,orrisingout-migration,orpeopleswitchingfromout-patientproviderstohospitals.Theirstudywasthorough.25Theyweresurethatitwastheactualforeclosuresandthefeartheyengenderedthatwereliterallyputtingpeopleinhospital.
![Page 816: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/816.jpg)
InBritaintheprovisionaldeathcountsforEnglandfor2012becameavailableinmid-January2013.Thatcountshowedatotalof465,290deaths,anincreaseof11,966(or2.6%)ontheequivalent52weeksof2011.Aconscientiousresearcherwhoworksinpublichealthreportedonthemountingdeathtollandexplainedthatthis2.6%increaseisthebiggestproportionalincreaseindeathsthatwehaveseeninthepastseventeenyears.26Mostoftheadditionalmortalitywasamongelderlywomen,anditwasnot,asfarasweyetknow,duetoanepidemicortheweather.Theresearcher’semployer,PublicHealthEngland,laterdistanceditselffromthisfinding,suggestingthatyoucouldmakeaninformedguessthattherise
![Page 817: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/817.jpg)
inmortalitymightbeduetoinfluenza,butitdidnotreporttheresultsoftestsforanynewstrains;nordiditexplainwhycurrentvaccinationprogrammesmightnotbeworkingsowellanylonger.Manyobserversdidnotfindthisreassuranceconvincing,27
particularlyasitchosetostopitsemployeefromhighlightingtheweeklydeathreportsfromAugust2013,whichwouldallowotherstocheckwhatwasoccurring.28
Intime,ananalysisofwhereandwhenthe2012UKmortalityriseoccurredwillprobablyrevealalinktoincreasinginsecurityinhousing,includingwithincommunalcarehomes,whichwererockedbothbyseveralscandalsthatyearandbyoneverylargeprivatecare-home
![Page 818: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/818.jpg)
provider,SouthernCrossHealthcare,goingbustbecauseitsannualrentalbillhadbecomeunaffordable.Themajorityofresidentsincarehomesareelderlywomen.Thefearoflosingaroominacarehomecandamagehealth,but,becauseyoungerdeathstendtobemorenewsworthy,theriseinelderlydeathswas,atfirst,ignored.Later,whenitwassuggestedthatthedeathsmightbeduetotheflu,thatexplanationwasridiculedbytwooftheUK’sleadingepidemiologists–DrDavidStucklerandProfessorMartinMcKee;29
interpretationsvarydependingonwhatmodelisbeingused,butthereisevidencethatincidentsoffluwereunusuallylowintheUKatthistime.30Despitelevelsofflubeinglow,reportsoffallinglifeexpectancy
![Page 819: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/819.jpg)
amongtheelderlybegantocirculateintheUKbythewinterof2013.31
Thesearethefirstrecordedfallssincethe1930s.32
Financialcrisesarenowknowntohaveextremelyrapidaswellaslong-lastingeffectsonhealth.Over10,000suicideswerecausedin1998alonebytheAsianfinancialcrisisofthatyear.33Infacttheinitialturmoilofacrisisandtheinsecurityitbringscancausesuicideratestorisebeforeanyactualriseinunemployment.Thisrapidriseinanxiety,associatedwiththefearofbecomingjobless,wasrecordedinboth2008andaroundthetimeofthe1929crash.34
Andduringbothperiodstherisedidnotquicklyabate.During2013itwasreportedthat
callstotheSpanishequivalentofthe
![Page 820: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/820.jpg)
Samaritansconcerningsuicidehadrisenby30%overthecourseofthepreviousyear,andthatsuicidehadbecometheleadingnon-diseasecauseofdeathinSpain.By2012thefigureswerenineSpaniardskillingthemselvesaday,andalmost200suicideattemptsbeingmadeaday.35
Manyofthesesuicidesandsuicideattemptswillbeinfluencedbyconcernoverhousing.InSpainthefinancesystemisnowcausingmoredeathsthanroad-trafficaccidents.Shockstoourpersonalsenseofsecuritycanbeveryhardtobear.Sheltermakesusphysicallysecure;havingahomeinwhichtoresideandtomeetwithfriendsandfamilyhelpskeepusmentallysecure.Wenowknowthatinsecurityoverhousing–simplythefearthatyouandyour
![Page 821: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/821.jpg)
familymaylosetheroofoveryourheads–canbadlyaffectbothyourmentalandphysicalhealth.
![Page 822: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/822.jpg)
![Page 823: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/823.jpg)
Anotherhalf-boarded-uphomeandgarageintheaffluentNetherEdgesuburbofSheffield.Thisisafinesolidproperty.Itcontainsenoughroomstohousemorethanonefamilywell;yeteventhegaragehashadtobesecuredforfearofvandalism.Itisalsoapropertyinarelatively
affluentareaofthecity,butnotthemostaffluent.Itscurrentstateillustratesthatitisnotjustintheworst-offneighbourhoodswherepeoplesufferwhenthehousingmarketbecomesvolatile.Wedonotappeartoknowwhattodowhenpricesfall,astheyhaveinthispartofSheffield.Oftenweboarduphomes,hopingthatwhatwethought
werethegoodtimeswillreturnandthatsomeone,fromsomewhere,willtakeoutanevenbiggerdebtthanwedid,justtogivethemtherighttoliveinthem.Atsomepointoursystemsoffinancinghousingwillhavetochange.They
willhavetocometorelylessonyoungergenerationspayingevermoremoneyfortherighttoshelterthanwedid.Whenthatpointarrives,propertylikethiswillstillexist.Allthesewersthatservehousinglikethiswillstillbethere.Homeswillnothavedisappeared.Butworkingoutwhatweneedtodotogettheboardingtakenoff,theinsidesrenovatedandhomeslikethis
reoccupiedistheconundrum.
![Page 824: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/824.jpg)
HEALTHANDEVICTION
…wheninequalitybecomeslargeenough,theveryrichnolongerliveinthesamesocietyaseveryoneelse…thegapbetweentherichandtherestissuchathreattoourhealth.
–AngusDeaton,Professorof
Economics,Princeton,201236
On9January2013theUSInstituteofMedicinereleasedareportthatclearlyshowedthattheUSpopulationofeverysocialstratumhasworsehealththanthoseincomparabledevelopedcountriessuchasGermany,Japan,Spain,ItalyorFrance.37ThesuperficialreasonsgivenforwhypeoplehavepoorerhealthintheUSwereadversebirthoutcomes,moreinjuries,morehomicides,moreinfectiousdiseases,moredrug-relatedcasesofprematuremortality,moreobesity,more
![Page 825: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/825.jpg)
diabetes,andagreaterprevalenceofheartdiseaseandchroniclungdisease.However,theunderlyingreasonsbehindtheInstituteofHealth’ssuggestionforalltheseoutcomeswerenotgreaterlaziness,risk-takingorfecklessnessintheUS,butwerethemoreadversesocialandeconomicconditionsfoundthere,thegreaterpovertyandthewiderinequality,andthefactthatsuch‘astressfulenvironmentmaypromotesubstanceabuse,physicalillness,criminalbehaviour,andfamilyviolence’.38Havinglittleornowelfarestatetofallbackonmeansthat,whenhousingandothercostsincrease,visitstothedoctorhavetobecurtailed.TheInstituteofMedicineReport’s
authorslinkedhighUSasthmarates
![Page 826: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/826.jpg)
tounhealthyhousing;yetthiswasaminorphenomenonincomparisonwiththementaldistressbeingcausedbyrapidlyrisinghousingandfinancialinsecurity.ProportionatelyfarmoreAmericansare,quiterationally,infearoflosingtheirhomesthanarepeopleinanyotherrichcountryonearth.EvenafterGreece’scataclysmicfinancialcrash,fewerpeoplewerehomelessinGreeceincomparisonwiththeUS.GreecehasaverylongwaytogotogettothesituationintheUS,wheresomanypeoplesleepincarsandsleeprough.InGreecemanyevictionsofdebtorsdon’toccurbecauseofnewlawsbroughtintoprotectpeopleduringthecrisis.39
FewintheUSwouldconsiderlawsprotectingresidentsinthatwaya
![Page 827: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/827.jpg)
possibility.MostdonotknowofthegreaterrightsenjoyedbymanyEuropeans,orofhowtenantsinJapancannoteasilyhavetheirrentsincreasedorbemadetoleaveapropertywhentheydon’twishto.40
Attheextremeoftherelationshipbetweenpoorhealthandbadhousingarethefindingsthatbank-lendingdecisionsinChicagoledtohighorevenrisinghomicideratesinparticularneighbourhoodsofthatlakesidecity.MaríaVeléz,AssistantProfessorintheUniversityofNewMexico,studiedlendingrecordsandfoundthatpeoplelivinginblackandLatinocommunitieswerelesslikelytobeallowedtotakeoutloansincomparisonwithpeoplelivinginareasthatwerepredominatelywhite.ShealsofoundthatAfrican-
![Page 828: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/828.jpg)
Americanareashadfivetimes(andLatinoneighbourhoodstwotimes)asmanyhomicidesaswhiteneighbourhoods.Shethenranapredictivemodel,whichsuggestedthatitwastheinsecurityofhousingthatledtothis:‘holdingallothervariablesconstant…[Wefind]thatblackandLatinoneighborhoodswouldexperiencefewerhomicidesifmorefinancialcapitalwereinfusedintotheseneighborhoods.Thesefindingssuggestthatneighborhoodsareshapedprofoundlybythedecisionsofexternaleconomicactors.’41Inotherwords,risinginsecurityinhousingcanleadtoameasurabledeteriorationinthelocalsocialenvironment,andithasbeenshownthatthisdirectlyraisesthehomiciderate.Itwasmostlyinthose
![Page 829: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/829.jpg)
housingblockswherepeoplewerethevictimsofracisminlendingpracticesthattheviolencewasworse.Therearemanysimilarfindingstothese,andmanyofthesefindingsdatefrombeforethecrash,frombeforethesituationinsomanyneighbourhoodsbecamemuchmoredire.Evidenceconcerningthecrashand
thegeneralstressithasbroughtinitswakeisstillbeinggathered.Theonesetofinternationalcomparisonsthathasbeenputtogether,byDavidStuckleroftheUniversityofOxfordandSanjayBasuofStanfordUniversity,suggeststhat,whereausterityhasbeengreater,theresultinggeneralsocialharmanddamagetophysicalandmentalhealthisalsoworse.42
![Page 830: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/830.jpg)
TherearemoreandmoresignsofpublichealthbeingdamagedinBritainbycurrentausteritycuts–andnotjustthroughpossiblehighermortalityratesamongtheveryelderly,ormoresuicidesattheextreme.Ouroveralllevelsofmentalhealthandoursenseofwell-beinghavesuffered,andthathasaffectedourgeneralhealth.Wealreadyknowthatself-reportedlevelsofgoodhealthintheUKhavebeendeteriorating.Inearly2013theUK’sOfficeofNationalStatisticsannouncedthattheproportionofadultsreportingtheirgeneralhealthtobeverygoodhadfallenfrom40%in2009to34%by2011.43
Whenawholegroupofpeoplehasbeenharmedbysomeevent,iftheycanfindsomeonetoblameforthe
![Page 831: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/831.jpg)
harm,theyhavetheoptionofgoingtocourttoseekrecompense.Particulargroupscanclaimparticulargrievancesfromhavingsufferedharmanddistressthroughhowtheyweretreated.Asyetwehavenothadanyclass-actionlawsuitsconcerningmortgagemis-sellingintheUK,althoughgroupsoflandlordsarethreateningtotakebanksandbuildingsocietiesthathaveincreasedtheirinterestratestocourt.Theirslogantotrytodrumupsupportis:‘Yourwealthisatriskifyouchoosetoignorethismessage!’44
Again,itisinstructivetolookacrosstheAtlanticforcluesastowhatmightbehappening.InJuly2012WellsFargo,thelargestmortgage-lenderintheUS,agreedto
![Page 832: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/832.jpg)
payaminimumof$175million‘tosettleaccusationsthatitsindependentbrokersdiscriminatedagainstblackandHispanicborrowersduringthehousingboom’.45Thatisahugesumofmoneytohandoverincompensation,andfromjustonelender.Thetimesmaybechangingastowhatbehaviourthecourtsandthepeople,andsomeoftheirpoliticians,arewillingtoputupwithfrombankers;but,thenagain,perhapsnot.Afterall,inmanyrespects,itappearstobebusinessasusualinthebankingsector.However,theamountoffineshasbeenrisinginrecentyears,andinSeptember2013BarclaysBankwasorderedtopayback£100millionininterestchargesthatturnedouttobe
![Page 833: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/833.jpg)
illegal.Thebanktriedtohidethisfactwithinamuchlargerdocument;thankfullyafewslightlymoreradicaloutlets,andthennewspapers,gavethatstoryprominence.46
Newspapers,whichareoftenalmostreverentialintheirtreatmentoffinancialinstitutionsandtheirmisdemeanours,oftenappeartoofferverylittlesympathytoindividualswhoaredownontheirluck,evenwhenpurportingtocare.Forexample,newspaperstoriesonthegrowingphenomenonofsquattinginyourownhomeoftentrytogiveaglimpseintothehumansideofthesestatistics,buttheeffectofthesestoriescanbetodetractfromtheweightofthenumbers.Whattheyneedtodoisbothtosayhowmanymillionsofpeoplehavebeenaffected
![Page 834: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/834.jpg)
andtodelveintothefulldepthsofsadness,fearanddespairthatcanresultwhenpeoplecannolongerpayfortheirshelter.47
Journalistsarenotnormallyreticentaboutbeingghoulish,sowhynotspelloutjusthowbadsomanypeople’smentalhealthhasbecome?Familiesareallowedtostayintheirhomesonlywhenitisinthedirectfinancialinterestsofthelendersnottoevictthem.Corporatelenderscareaboutsuicidesonlybecauselifeinsurerswon’tpayupon‘deliberate’deaths,thusdeprivingthelendersoftheirrepayments.Itwouldhelpifoccupiersknew
theyhadaccesstomorebargainingtools.Ahomethatisoccupiedretainswhatvalueitmighthavefarlongerthanonethatisabandoned.
![Page 835: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/835.jpg)
Theoccupyingfamilyactasunpaidsecurityguards,cleanersandcaretakers.Themortgagecompanymaythenreducetheloantoalevelthefamilycanpay,but,iftheoccupiersareoutofworkorinlow-paidwork,theymayhaveenoughmoneyonlyforfoodandnotforareducedmortgagepayment.IntheUStodaythemortgage
companywilloftenpayforbuildingsinsurancewhenthefamilycannot.Buttheywillhardlybepreparedtopayforfoodorgivethecaretakeranywage.Youmightretort‘whyshouldthey?’Theansweristhat,iftheyareretainingtherighttoevictatanytime,theresidentsareeffectivelybecomingtheiremployees,theircaretakers.However,itisonlythebuildingtheyvalue,notthepeople.48
![Page 836: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/836.jpg)
Anditsvaluedependsonhowitiskeptup,andonhowtheneighbourhooditisiniskeptup–anemptyhousedevaluesthewholearea.Boarded-upemptypropertyona
streetcaneasilyraisetheaveragenegativeequityforotherfamilieslivinginhomesonthatsamestreet.Nearbypropertypricesfall.Evictionsalsocontributedirectlytorisinghomelessness,which,ifvisible,alsofurtherdevaluesaneighbourhood.Havingyourneighbourssleepingbyyourgutterdoesnotmakeyourhomelookgood.YoumaythinkthisappliesonlytotheUS,butinBritain,asmorehomelesshostelsandprobationhostelsareshut,morepeoplewhodolosetheirhomeswillfindthemselves
![Page 837: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/837.jpg)
roofless.InthecityofBristol,inautumn2013,some150peoplewerethreatenedwithlosingtheirhomelesshostelbedsasenhancedausteritycutswereimposed.49
NEGATIVEEQUITY
Peopledonotwanttobeconfrontedwiththesightofthehomeless–itisuncomfortableforthewell-offtoberemindedofthehumanpricethatispaidforasocialstructureliketheirs–andtheyarewillingtodeprivethosepeopleoftheirlastopportunitytosleepinordertoprotectthemselvesfromthisdiscomfort.
–JeremyWaldron,199150
IfyouhaveeverwonderedwhyinterestsrateshaveremainedsolowforsolongintheUK,considerthis.Keepingupthevalueoftheneighbourhoodpresentssomething
![Page 838: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/838.jpg)
ofadilemmatolenders.Whenborrowersfallbehindontheirpaymentsif,forexample,interestratesrise,theusualactionistoevictthem;butifmillionsofborrowersfallbehind,whatthendoyoudo?IntheUK,governmenttriestoavoidthedilemmabyurgingtheBankofEnglandnottoraiserates.Banksandbuildingsocietiesthentendtofollowsuitandtaketheircutbychargingtheircustomersmuchmorethanthebaserate,butnotasmuchastheyotherwisewould.IntheUS,interestratesdidnot
needtorisetobringonacrisis:propertyvaluesandwagesbothfallinghadasimilareffect.ThisiswhyVickeeAdams,aspokeswomaninthehomemortgagedivisionoftheUSbankWellsFargo,stressedin
![Page 839: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/839.jpg)
2012thatthebankwaskeentosupport‘folksremainingintheirhomes–thereisabenefittokeepingacommunitywithresidents’.51Andthisiswherewebeganthishousingdisasterstory:byintroducingtheimplicationsofthegrowthininequalityintheUSatthestartofthisbook(pp.24–5).BankersintheUSlettingsome
peoplelivefreeinformerhomesgivesusonepossiblescenarioforwhatmighthappenifandwheninterestratesintheUKriseand/orhousingpricesfall.Youmightask:whydon’tWellsFargoandotherbankssimplyturntheirdefaultingcustomersintotenantsandchargethemarent?Agoodexplanationisthattheydidnotchargerentandbecomelandlordsthelasttimethere
![Page 840: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/840.jpg)
wasahousingfinancecrisis,inthe1930s,andWellsFargosurvivedthat.ThisismadeclearerbyacommentpostedonlineinresponsetothenewsstoryinwhichVickeewasquoted.Thecommentwasmadeby‘Bob’,anditisnoteasytoforgetonceyouhavereadit.Itsuccinctlytellsuswhatweshouldmostrememberaboutthepast,anditisadmirablyterseinexplainingwherewemightbetomorrowincountriesliketheUSandtheUK:
WhenIwassevenyearsoldmyparentspickedahouseoutofabookletprovidedbyatitlecompanyandboughtit.Theyfoundthepreviousowners(mortgagees),whohadlongsincedefaultedontheirmortgage,livingthere.Itwasagreathardshipfortheoccupantstoleave;theyhadnoplacetogo.Myparentshadtohavethemevictedinorderto
![Page 841: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/841.jpg)
movein.Manyyearslater,Ifoundthebookletandrealizedthatabout20%ofthehomesinthetownwerelistedandmanyofmyschoolclassmatesbelongedto‘squatter’families.Itobviouslybenefitedthebanksandtitlecompaniestoletpeoplesquatratherthanletthepropertiesfallintoruinandtherewasalwaysthechancethattheycouldrepurchasetheirformerhomes.Thatwas1939.Thatisnow.
–Bob,Boonsboro,Maryland,201252
WhenIfirstworkedinhousingintheearly1990s,itwasnegativeequitythatIstudied:whereitoccurred,whowasaffected,howthoseunsecureddebtsthenalteredotheraspectsofthelivesofthoseaffected,likevotingandhealth.53
OnenewspaperstorykeepsoncomingbacktometodayasIanalysethiscurrentcrisis.Thatstory
![Page 842: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/842.jpg)
wasaboutacouplediscussingtheirnegativeequity:thewomanwascalledJanet,Ithink,andthemanmighthavebeencalledTim.Theydidn’tlookveryhappy;theyhadrecentlysplitup.Janetwasholdingacupofteaandlookingmiserableinthephotographaccompanyingthestory.Theyhadtostayinthehousetheyhadbought,tocontinuelivingwitheachother,withsomeonetheynolongerloved,becauseoftheearly1990sUKhousingcrisis.Todayitisnolongerwholehouses
thatarebeingsharedbypeoplewhohavesplitup,butjustonebedroom.Thisisdespiteourhavingmorebedsthaneverbefore,perperson.Anditisnotjustcoupleswhohavesplitupwhoaredoingthis.Verypoorimmigranttenantstalkofhot-
![Page 843: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/843.jpg)
bedding–twoorthreepeopleusingthesamebedbutsleepinginitatdifferenttimesofthedayandnight.Butageneralsenseofhousingbeingincrisismightbegintobebetterappreciatedwhenit’snotjusttheverypoorwhohavetoshareabedwhenthey’drathernotdoso.ThestorythatfollowswastoldintheUKin2013;twentyyearson,thecouplearecalledAdelaandTanek,notJanetandTim.HereisthesituationasAdeladescribesit:
Itwasadifficultdecisionandaterriblestepbackwards,buteventuallywedecidedwehadnochoicebutformetomovebackintothefamilyhome…Wegetonwellasfriendsbutthissituationisterriblyawkwardandverywrong.Wewanttogetonwithourlivesandmeetnewpeoplebutwe’restucktogether.Wecan’taffordasecondbedandhave
![Page 844: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/844.jpg)
nowheretoputoneanyway.Wedon’thaveasofawecansleeponandwedon’twantthechildrentohaveto
sharetheirroomwithoneofus.54
Intheearly1990sIhadtoconstantlyexplainwhatnegativeequitywasifIwantedtowriteaboutthatnewphenomenon.Itwasanewphrasethen;itevenfeaturedasanew‘wordoftheyear’inonereviewoftheyear’snews.Todayfewpeopleinterestedinhousingdonotknowthatnegativeequityisthedifferencebetweentheoutstandingmortgageowedandahome’scurrentvalue.Equitybecomes‘negative’whenaproperty’svaluedropstolessthanthedebtsecuredonit–meaningthatthepotentialownerispayingbacktothebankmorethantheirpropertyisworth,ontopoftheinterest.
![Page 845: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/845.jpg)
IntheUS‘nearly16millionUShomeowners,or31.4%ofallhomeownerswithamortgage,werefinanciallyunderwaterin2012.Theyowed$1.2trillionmorethanthevalueoftheirhomes.’55AsIwrite,figuresfor2013haveyettobereleased,butweknowthatremortgagingintheUSisontheincreaseagain,asreportedabove,sopositiveequityisbeingdrawndown.Inaresponsetopersistentnegativeequity,thecityofRichmond,California,voted,on11September2013,tousethepowerofeminentdomain(similartocompulsorypurchaseordersintheUK)to‘becomethefirstinthenationtoacquiremortgageswithnegativeequityinabidtokeeplocalresidentsintheirhomes’.56
![Page 846: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/846.jpg)
Negativeequitycanbesetupfromthestartbycorruptlenders.AdataanalystintheUShasusedhousingtransactiondatatodeterminewhethertheinitialsurvey,or‘appraisal’,ofapropertydoneonbehalfofthelenderdeliberatelyinflateditsvalue.Thisputsthebuyerintoinstantnegativeequity.Ifcurrentpropertyvaluationsarebeingmadeatlevelsthatareunattainableorunsustainable,inpartsofBritainthiscouldbehappeningnow.Thedataanalyst’scompany,
Triaxx,identifiedloansthatmighthavebeeninflatedbycomparingeverysaletofiftysalesofsimilarlysizedpropertysoldatthesametime.57Theanalystestimatedthatforonelenderalone,ResCap,58‘phoneyappraisals’resultedin$1.29billion
![Page 847: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/847.jpg)
morebeinglentthanshouldhavebeen.OneexamplewasofamortgageissuedinNovember2006onahomeinMiami.Thiswasforthepurchaseofa1,036-square-footsingle-familyresidence(averysmallhomeforAmerica).Theappraisalwasthatthepropertywasworth$495,000anditalloweda$396,000mortgagetobeissued,at‘arelativelyconservative80%loan-to-valueratio’.However,whatappearedtobean
80%loancaneasilyturnoutnottohavebeenaloanatthatlendingproportionatall.Analysingtensimilarsalesmadearoundthetimeofthisloan,Triaxxsuggestedthatthepropertyinquestionwasactuallyworthabout$279,000–sothe$396,000mortgagerepresenteda
![Page 848: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/848.jpg)
142%loan-to-valueborrowingratio.Triaxx’sreportadded,drily,thatthevalueofthehomeinquestionmightpossiblyhavebeenjustifiedhaditcontainedgold-platedbathroomfixturesanddiamond-encrustedappliances.Ofcourse,theTriaxxtechniquetocheckforfraudulentvaluingonlyworksifthemajorityoflendersarenotalsoinflatingtheirsurveys.Itiswhenfraudbecomesthenorm–whenalmosteverysurveyorsaysallhomesareworthmorethantheaskingpricesayearago,atthesametimeasaveragewagesarefalling–thatweshouldrealizewecannotgoonlikethis.Couldhousepricessoonrise
greatlyagainandfreemortgagorstrappedbynegativeequityintheUS,acrossmuchofEuropeand
![Page 849: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/849.jpg)
elsewhereintherichworld?Manythinknotinthenearfuture,butallittakesisforalittlegeneralinflationtotakeplaceandhousingpriceinflationwillfreethosecurrentlytrapped.Sucharisemighthelppeopleindebt,butitwouldnotmakehousingmoreaffordable,unlesshousingpricesdidnotrisebyasmuchaswagesandsalaries.InNovember2012reportersattheWallStreetJournalsuggestedthatatippingpointhadbeenpassedintheUK.Theydrewthefollowinggraph.Itmaylooktobeonlyofmarginalrelevancehere,butwheneventuallyoneofthoseupwardblipsbecomesatrend,everythingthatiscurrentlystableinhousingchanges.Tenmonthslater,inAugust2013,
theConsumerPriceIndex(CPI)
![Page 850: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/850.jpg)
remainedat2.7%,soifOctober2012wasaturningpoint,nothinghasturnedverymuchyet;althoughtheRetailPriceIndex(RPI)didrisefrom3.1%inJuly2013to3.3%byAugust,justtwenty-eightdayslater.59TheRPIincludesthecostofmortgagepayments;theCPIdoesnot.HousingisonceagainbecomingmoreexpensiveintheUK,rapidlysoinautumn2013,buttheabilitytopayforitisnotrising.
![Page 851: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/851.jpg)
Figure21.WallStreetJournaldepictionofUKinflationtrends,October2011toOctober2012.
Therearemanyothersignsthatinflationmightsoonrise.InlateFebruary2013theUKlostitsAAAcreditrating.Thelasttimethatoccurred,backinthe1970s,inflationbecamehighandthenrosefurther.
![Page 852: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/852.jpg)
Risinginflationhasthebeneficialeffectforhouseholdsinnegativeequityofreleasingthemfromtheirdebt,butitalsotendstomakecentralbankersbelievethatinterestratesshouldbeincreasedtoo,todampenanyfurtherrise(aspeoplethenhavelesssparemoneytospend);otherwiseinflationkeepsonrisingandrisingandeventuallyanotherbubbleisformed.Neitherrapidlyfallingnorrising
housingpriceswillhelpusall,inaggregate,infuture.Theywillhelpsomepeople,butnotothers.Whatthisbookarguesisthatmorehousingrightsareneeded,asisaslowchangeinattitude,untilweagainseehousingasshelter,asthebuildingsaroundwhichcommunitiesgrow,notasretirementnest-eggs.Slowly
![Page 853: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/853.jpg)
fallinghousingpricesandrentswouldrebalancetheeconomy.Benefitsneedtorisefasterthanwages,wagesfasterthansalaries,salariesfasterthanhousingprices,andrentsneedtoriseslowestofall,ifatall.Describingthepathweshouldtaketogettothissituation,whichIattempttodointhenextchapter,isfarharderthandescribingtheidealsituationweneedtoaspireto;butfirstwehavetoknowthatthealternativeoffuturestaggeringlyunaffordablehousingisfrighteningenoughtomaketheeffortworthwhile.InIrelandtherearecountless
neighbourhoodsthatarenowcharacterizedbymassnegativeequity:‘Forresidentsintheseestates,theyarelivingwiththestress
![Page 854: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/854.jpg)
ofanuncertainfuturewithregardstoworksbeingcompleted,massivenegativeequity(inexcessof60%frompeak),andalackofasenseofplaceandcommunity.’60NegativeequityatcurrentIrishlevelsrequirespricerisesinmanyareasof60%simplytoremovetheunsecuredpartofthedebt.Aninflationrateof2.7%achievesthatonlywithacontinuouseighteenyearsofuninterruptedpricerises.Thus,ifthevalueofhousinginmanyareasofIrelandweretorisebythecurrentrateofUKinflation,inagenerationitwouldagainbeworthwhatfamiliespaidforitin2008.Butwhyshouldthathappen?InMarch2013,theIrish
governmentwentbacktoitsmajorcreditor,theEU,toaskformoremoneyandlongerrepaymentterms.
![Page 855: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/855.jpg)
InDecember2013itofficiallyescapedthedirectcontrolofinternationalcreditors,althoughtheTroikawillreturntoinspectthecountry’sbookstwiceayearformanyyearstocome.61AsAlanBarrett,headoftheEconomicAnalysisDivisionatIreland’sEconomicandSocialResearchInstitute,putitinaconsiderableunderstatement,Irelandinearly2013wasin‘afairlyunstablesituation’.62
AdaylateritwasreportedthatpropertywasstillsellingatauctioninIrelandforlessthanafifthofitspeakprice.63Evenbeforethat‘eminentdomain’reactioninRichmond,California,thegovernmentinIreland,throughtheNationalAssetManagementAgency(NAMA),createdinlate2009,had
![Page 856: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/856.jpg)
beguntoconvertemptyformerprivatehomesintohomesthatcouldbeusedforrentthroughhousingassociations.Some4,000wereannouncedin2013,butthatisonlyatinyfractionofthe96,000thatneedtobeconverted.64UnfortunatelytheIrisharealsolookingtoselloffpartofthatrentalportfoliotoinvestmentfunds,65claimingtheyarestrugglingtodrumupenoughinterestfrompotentialnot-for-profitlandlords.66
Transferstonot-for-profitlandlordsisthekindofactionthatisstillbeingdemandedinEurope’sothermosthousing-downturn-affectedcountry,Spain,whereelectedofficialshavebeentalkingabouttheneedforfundamentalchangeandforextendingcompulsorypurchasingpowersformanymonthsnow:
![Page 857: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/857.jpg)
Utopiasaren’tchimeras;theyarethemostnobledreamsthatpeoplehave.Thedreamofequality;thedreamthathousingshouldbelongtoeveryone,becauseyouareaperson,andnotapieceofmerchandisetobespeculatedwith;thedreamthatnaturalresources–forinstanceenergy–shouldn’tbeintheserviceofmultinationals,butintheserviceofthepeople.Allthosedreamsarethedreamswe’dliketoturnintorealities.
–JuanManuelSánchezGordillo,theMayorof
Marinaleda,201267
YoumightthinkthatMarinaledaisanexceptionalcase,andthatGordillo’spronouncementisn’ttypicalofSpanishofficialdom.Andyouwouldberight.ButwhenyoulookatwhathashappenedinIrelandsincethatSpanishmayorspoke,youmightalsothinkhewasjustalittleaheadofhistime.AllaroundEurope
![Page 858: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/858.jpg)
theunderlyingcircumstancescontinuetochange.InGreeceaveragepropertypricesarenowfallingtolevelsbelowhalfoftheir2008peak,belowwhatin2012wasthoughttobetheirfloorprice.68
UnderthesecircumstanceswhatwasonceimpossiblebecomespossibleinmanypartsofEurope,justastheseizingoflandandpropertyforthepublicgoodhasnowbecomepossibleinRichmond,California.WhenJuanGordillo,theMayorof
thatsmalltowninruralAndalusia,ledfarmlabourersintosupermarketstoexpropriatebasiclivingsupplies,heexplainedtothetelevisioncamerasthatabetterworldwaspossible,justonesmallstep,ortheft,atatime.Whenitcomestoprovidinghousing,abetterworldis
![Page 859: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/859.jpg)
moreeasilypossible.Incontrasttotakingfoodoffsupermarketshelves,orsupplyingenergy,housingdoesnotneedtobestolen,onlymoreequitablydistributed.Itcanbemadetobelongtoeveryonejustalittlebitmorethanitcurrentlydoesbyextendingrights,bysayingthateveryonehastherighttobehoused.Governmentscouldtransferemptyprivatelyownedpropertyintosocialhousing,andthosewhoarehoardinginatimeofausteritycouldbecajoled,taxedorotherwisepersuadedoutofsuchbehaviour.Astheynowchantat
demonstrationsinSpain,‘Nopeoplewithouthouses,nohouseswithoutpeople’,69whichisfittinginthecountrywiththelargestnumberofemptyhomesandalsohometo
![Page 860: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/860.jpg)
Europe’slargestslumshantytown,CañadaRealGaliana.70ThereisnonecessityinEuropetoseeshantytownsgrow,buttheywillgrowifwefailtoshareoutbetterwhatwehave,oratleastshareaswellasweusedto.AsyettherearenosimilarshantytownsorslumsintheUK,buttherecouldbeinfuture,ashousingvaluesskyrocketinsomeplacesandnose-diveinothers.Mostpeoplewanttostayintheir
homes,butsomewhohavesplitup(orwhoaresufferingdomesticviolenceandshouldsplitup)desperatelywanttoleave.Themajorproblemforpeoplewithnegativeequitycomeswhentheywanttomove.Theycan’tsell–butimagineascenarioinwhichtheycouldselltheirpropertytotheirlenderand
![Page 861: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/861.jpg)
becometenantswithanewlandlord.Thentheycouldleave.The‘right-to-stay’,therighttobecomeatenantinthehomeyouarealreadylivingin,would–ironically,givenitstitle–alsogivehome-buyerswithnegativeequitytheoptiontoleave.Itisthecounterbalancetothe‘right-to-buy’,anditalreadyexistsinlegislationintheUKforhouseholdswithchildrenorothervulnerablepersons;itisjustnotyetwellenoughimplemented.The‘right-to-stay’istherightto
stayinyourhomewhenadverseeconomiccircumstancesmeanyouwouldbebetteroffbecoming,ineffect,atenant.IthasmuchwiderimplicationsforthehousingmarketintheUKifitiseverextended.ItisthemissinglinkinUKhousinglegislationbetweenmortgage-buyers
![Page 862: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/862.jpg)
andtenants.Tenantsinsocialhousinghavethe‘right-to-buy’,therighttobecomemortgage-buyers;sowhyshouldpeoplewhohaveamortgagenothavethereverseright–therighttobecometenants?IntheUS,lawyersactingonbehalfofbankerswhocurrentlyownpropertyinnegativeequityaretryingtoblockcurrentplanstheretomakethispossible:‘whichtheysayreliesonthemswallowinglosses’.71Noteveryonewinswhenresidentsgainmorerights.Suchrightsareonlywonandextendedduringtimesofgreatturmoil,butwemaywellbeapproachingsuchturmoilagainnow,acrosstheentirerichworld.Aportentofwhatcouldcomewas
firstseeninGreeceduringthesummerof2010,whenalawwas
![Page 863: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/863.jpg)
passedallowingmortgage-holderstoremainintheirpropertywhentheyhavenegativeequityandcannolongeraffordtokeepuptheirpayments.Whatismore,thislawalsogivesthemalong-termwayoutoffinancialpurgatory.Itenablesborrowerstoavoidforeclosureontheirprimaryresidenceiftheycommittopaybackaportionoftheirremainingmortgagedebtsatanaveragemortgagerateoveratmosttwentyyearsforamountsofupto85%oftheirhome’scurrentmarketvalue–significantlynotthevalueofthepropertywhenthemortgagewassecured.Thisgivestheresidentsequityofatleast15%ofthenewvalue,andthebankshavetoswallowthelosses.72
![Page 864: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/864.jpg)
Allaround–inItaly,Spain,Portugal,Ireland,IcelandandevenintheprivatepropertycapitaloftheUS–changeisafoot.Somechangeisvocalanddirect;someismorecautious;muchispragmatic;andalmostallofitistoolittletoolate–butthemodelofthelastthirty-threeyearsofbanksprofiteeringfrompeople’sstrugglesjusttobeabletostayintheirhomewhenthingsbecomeadverseisnowunderwidespreadthreat.Thedenialofprofitstothebanksisthepossibilitythathasemergedfromthecrisis.Thelawrescuingmortgage-
holdersinGreecewasbroughtinbythethenEconomyMinister,LoukaKatseli.Itdoesnotapplytothemostexpensiveproperties,sothewealthyarenotprotected;moreover,
![Page 865: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/865.jpg)
borrowershavetoshowthattheyhavenootherassetswithwhichtorepaytheirdebts.Onlythemainhomeisprotectedandthenonlyifitsvalueisunder€150,000fortheunmarried,andunder€300,000formarriedcouples.Contrasttheextensionofhousing
rightsincrisis-strickenGreecewiththetimidityoftheUKgovernment,which,during2012,soughttogivemortgage-holderstheadditionalrighttobuildsmallextensionstothebacksoftheir(bank’s)propertywithoutplanningpermission;73andwhichtriedandfailedinthatsameyeartoencouragemorepeopletobecomemortgage-holdersbypromotingthe‘right-to-buy’.IntheUKmanypeopledonothavearighttoshelter,andthosethatdocanstillbegiven
![Page 866: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/866.jpg)
inappropriateshelter.Peoplehavetherighttogetintodebtinordertobuy,tobuild,toextendorjusttospend,butnottherighttostayintheirhomesandtobeprotectedfromthevagariesofthemarket.Perversely,themorepeoplearepreparedtotakeonadditionaldebtthebettertheeconomyissaidtobe–risingdebtandspendingareoftentakenasasignofconsumerconfidence,whichhelpsthemarketeconomy.Thegovernmentoftenseemsmorewillingtoprotectthebanksfrommarketforcesthanitsownpeople,eventhoughindividualscannotbeexpectedtounderstandtheseforcesaswellasthebanks.Unsurprisinglythehigh-profile
2012‘right-to-buy’relaunchhadminimaltake-up.Some5,697people
![Page 867: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/867.jpg)
intwenty-fivelocalauthoritiesexpressedadesiretobuytheircouncilhouse.However,only233havedonesobecauselessthan5%ofthosewhowereinterestedwereearningenoughmoney.74AlmosteveryonewhohasthefinancialwherewithaltobuyintheUKhasalreadybought.Morepeopleneedtobeabletosell–especiallythosewhoarefindingithardtokeepuptheirmortgagepayments.IntheorypeoplecansellandstayputastenantsintheUKunderexistinglaws,butthecurrentcoalitiongovernmenthasnoenthusiasmforpromotingorextendingtheselaws.Peoplecurrentlyhavetherighttosellthehometheyarebuyingbacktotheirlenderortohaveitpassedontoahousingassociation.InEnglandthis
![Page 868: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/868.jpg)
iscalledtheMortgageRescueScheme(MRS);therearesimilarschemesinWalesandScotland;whileafullmortgagerescueschemewasproposedforNorthernIrelandin2010buthasnotyetbeenimplemented.75
ThecurrentUK‘right-to-stay’isinfacta‘right-to-sell’:theownershipofyourhomecanbepassedfromyourbanktoanewlandlord,evenwhenyouownonlyasmallpartornoneofit.Theseschemeswereproposedduringthepreviousgovernment’sterminofficebutwerenotdevelopedenoughwhenNewLabourwasinpower.Take-upwasnotinsignificant,butitwasnotcelebrated.PerhapsthiswasbecausebecomingatenantagainintheUKisseenasasourceofshame.Perhaps
![Page 869: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/869.jpg)
theword‘rescue’doesnothelp.AllthesecurrentschemesappearnottobefavouredbythecurrentUKgovernmentandtheirUnionistalliesinNorthernIreland,butallremainonthestatutebook,readytobeusedshouldthecrisisdeepentodisaster,shouldinterestratesneedtoriserapidly,andshoulditbecomeessentialtoavoidthemassevictionoffamilieswhocannolongerpaytheirmortgage.76
Thecoalitiongovernmentmightwishtoseetheabsoluteprivatepropertyrightsofbankingcorporationsdefended,butithasnoplansatpresenttoreversethe‘right-to-sell’legislation.Itmightknowthatthisisindefensibleinthecurrentclimate,andsoitallowslocalauthoritiestocontinuetousethe
![Page 870: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/870.jpg)
legislation.InthecityofSheffieldoverahundredMRSswerecompletedbetween2010and2012.Thiswasdonebytransferringownershiptohousingassociations.However,expertsonhousinginthatcitysuggestthatthenumbersweresolowbecausetheamountsallowedunderthenewhousingbenefitcapsareoftennotenoughtopaytherent.Thecutsinhousingbenefitcan
preventthosewhocannolongerpaythemortgagefrombeing‘rescued’andturnedintotenants.Itisnotfecklessnessbutalmostalwayslossofemployment,reductionincontractedhours,illnessorseparationthatcausesfamiliestobecomeatriskoflosingtheirhome.LocalhousingexpertsinSheffieldclaimthattheexistingschemesare
![Page 871: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/871.jpg)
notenough.Therealsoneedstobemoreresponsiblelendingwithrobustlandlordregulation,aswellasmoreadviceandhelpwithbudgetingandmoneymanagement.77ButservicessuchastheCitizensAdviceBureaushavebeensavagelycutjustatthetimetheyaremostneeded.ThatservicebegantobedecimatedinApril2011.78
Wearecurrentlyinthemiddleofafightoverthephilosophyandlegalityoftherighttobehoused,therighttoadviceandtherightnottoberippedoff.The‘right-to-stay’–tosellthehomeyouareintoasocialoreventoaprivatelandlord,buttocontinuetooccupyitasatenant–wouldworkonlyiftenancyconditionsintheUKbecamemorepalatable.Ifitbecomesnecessaryfor
![Page 872: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/872.jpg)
evenmorefamiliestorent,ratherthantoborrowandbuy,andiffamiliescurrentlylockedintomortgagesaretoregardaswitchtorentingasacceptableandnotasaretrogradestep,therewillhavetobeareformoftenants’rights.ManyoftherightsthattenantsenjoyedinthepastintheUKhavebeenlost,butbelowisalistofwhatiscurrentlythepracticeinother(similar)countriestoshowwhattherangeofworkableoptionsis.
Table2.Notableprivaterentalpracticesinothercountries.
Country Purpose Practice
Ireland Tenantsecurity
Fouryear’ssecurityoftenureafterintitialyear
Sweden Tenantsecurity
Offersindefiniteleases
HongKong Tenantsecurity
Offerstwo-yearleases
![Page 873: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/873.jpg)
Netherlands Landlordfinance
Depreciationallowance
France Landlordfinance
Offsettingrentallossesagainstotherincome-‘negativegearing’-makesinvestmentmoreappealing
US Singleownership
Blocksofrentalpropertiesundersingleownership,makingpropertieseasiertomanageandportfolioseasiertoassemble
Switzerland Rentregulation
Rentceilings,regularlyadjustedbyofficials,thatmaynotbeexceededforaffordableproperties
Denmark Rentregulation
Setsanofficiallydeterminedratebywhichrentsareallowedtoincreasefornewtenanciesandhas
![Page 874: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/874.jpg)
localrentcontrolboards
Austria Rentregulation
Onlypermitsmid-tenancyrentrisesinlinewithConsumerPriceIndexinflation
Finland Rentregulation
Banslandlordsfrompassingoncoststocovermaintenance
Belgium Rentregulation
Allowslandlordstoincreaserentstomakeimprovementstoproperty
Germany Tenantcontrol
Landlordsrentouta‘shell’thattenantscanthendecoratethemselves
Spain Social-private
Apublicinstitution(SociedadPúblicadeAlquiler)hasbeencreatedtoprovideguranteedrentalschemesfor
![Page 875: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/875.jpg)
tenantsandlandlordsinordertoencouragethedevelopmentoftherentalsector
ImagineiftheUKhadmanyofthoserightsenjoyedbytenantsinallthoseothercountrieslistedabove.Imagineifyouhadthe‘right-to-stay’aslongasyoulivedinyourrentedhome,aslongasyoupaidtherent.Whataboutrentstayingfixedforatleasttwoyearsorevenforfiveyears,atwhichtimeyoucouldrenegotiate?Imagineiftherentcouldnotsimplybeincreasedatthewhimofyourlandlordbutwassetbyalocalboard,perhapsexactlylikeLocalHousingAllowancesforhousingbenefitareset.Whyisn’ttheallowancethemaximumrent?Thatisnomoreodd
![Page 876: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/876.jpg)
thanhavingaminimumwagetopreventexploitation.Wewonthatminimumwageonlyin1997.Howlongbeforewewinamaximumrent?Butpleasedon’tstopimaginingjustyet.Imagineiftherewereminimum-
qualitystandardsthatensuredhousingforrenthadqualitiesthatmostpeoplewouldbewillingtoputupwith,andnotjust‘lowqualityforthepoor’.Youmightsaythatlandlordscouldnotaffordtoprovideallthis.But,ifthatwerethecase,theywouldthenhavetoselltheirpropertycheaplytoadeveloperfamilythatcoulddoitup,andpriceswouldfall.Forsomereasonlandlordsareabletodoallthisinmuchoftherestof(atleastnorthern)Europe.Perhapsitisbecausehouse
![Page 877: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/877.jpg)
pricestherearelower,whentheyrisetheyclimbmoreslowly,andnegativeequitythenbecomesrarer.High-qualityrentalaccommodationmaybyitselfbekeepinghousepricesdown.Ofcourse,lessprofitismadeoutofhousinginalmostalloftherestofEurope;someoneloses.Butthemainmotivationforprovidinggoodhealthservices,goodeducationandgood-qualityhousingshouldneverbeprofit.Thereiscurrentlyabattletaking
placeoverhousingpolicyintheUK.Ononesidearethosearguingforprogressivechange;theseareadvocatesrangingfromgroupswishingtoincreaserightsforsquatters,tothinktanksproducingoptionssuchasthoseshowninthetableabove,79topoliticalpartiesless
![Page 878: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/878.jpg)
inclinedtokowtowtobankers.Opposingthemarepeoplewhoseetheirpurposeasprotectingthepropertyinterestsofarichminority.Thisgroupwantstoseemoresquattersimprisonedbecausetheyseesquattersasthethinedgeofawedgeinthebattleformorehousingrights.Theydon’twant‘easyoptions’forthehomeless.Iftherichminoritywins,then,insteadofgreaterrightsandamoreefficientrationingofourcurrenthousingstock,we’llgetincreasedhomelessness.
HOMELESSNESS
[Fromtoday]councilswillbeabletodischargetheirdutiestohomelesspeoplewiththeofferofasuitabletwelve-monthtenancywithaprivate
![Page 879: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/879.jpg)
landlord,andhomelessfamilieswillnowendupinshort-termprivatelets.
–Shelter,9November201280
Thedate9November2012markedawatershed.Itwaswhenwelostoneofthemostsignificantofthosehousingrightsthathadbeenwoninthe1960sandstrengthenedthrough1970spoliticalagitationafterpeoplewatchedCathycomehomeontheBBC,the1966filmshowingayoungmotherasshetraipsedfromprivatelettothestreets,todestitutionanddespair.MeasuresintheLocalismActof2011meantthatfromthatday,9November,justsevenweeksbeforeChristmas2012,localcouncilswerenolongerlegallyrequiredtoofferhomelessfamiliesandvulnerablepeopleasecurehomemanagedbythemorbyahousingassociation
![Page 880: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/880.jpg)
landlord.Instead,theycouldputthenewlyhomelessstraightintothehandsofaprivatelandlord,whosemaingoalwastoprofitfromtheirhomelessness.Inthecoalitiongovernment’swords,before9November2012,‘underthepreviousrules,peoplewhobecamehomelesswereabletorefuseoffersofaccommodationintheprivaterentedsector,andinsistthattheyshouldbehousedinexpensivetemporaryaccommodationuntilalong-termsocialhomebecomesavailable.’81
The2011Actalsomadeitpossibletorentoutcouncilhousesononlyshort-termlets.InBritain,youthhomelessnesslast
rosewhenhousingbenefitpaymentsforhomelesssixteen-andseventeen-year-oldsweremadeillegalby
![Page 881: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/881.jpg)
MargaretThatcher’sgovernmentintheveryearly1980s.DavidCameronwouldliketoreduceyoungpeople’shousingrightsevenfurther.Ifhegetshisway,almostallthoseagedundertwenty-fivewon’tqualifyforanyhousingbenefitsifhomeless.82Theywillgetnosupportatallandhavetostaywithfamilyorliveonthestreets.Alreadypeopleagedunderthirty-fivecanbeallocatedonlyenoughhousingbenefittoallowthemtoliveinaroominsharedaccommodation,sharingsomeorallofakitchen,bathroom,toiletandlivingroomwithstrangers.Iftheyfalloutwithotherresidents,theycantheneasilybecomehomeless.And,oncehomeless,iftheydon’thaveachildorareotherwiseveryvulnerable,theauthoritieshaveno
![Page 882: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/882.jpg)
responsibilityforthem,otherthantoensurethattheyarenoteasytoseeonthestreets.ThisistheUKin2014,butwheredidthethinkingthatthiswasOKcomefrom?Gobacktwenty-fiveyears,to
1989,andacrosstotheUS,oncetheresultsofanearliermini-housing-crisisspreadingacrossthecountryhadbecomeabitmorenormalizedinpeople’sperceptions.ItwasreportedthatNewYorkershadbeguntogrowtiredofconfrontinghomelesspeopleeveryday.Theymetthemonthesubway,andthenatthemainlinetrainstations;theyweresteppingoverthemattheentrancestosupermarketsandevenonthedoorstepsoftheirownapartmentbuildings.ThethenAdvocacyDirectorfortheCoalitionforthe
![Page 883: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/883.jpg)
Homeless,KeithSumma,explainedthat‘Peoplearetiredofsteppingoverbodies.’AndLynetteThompson,aTransitAuthorityofficialwhowasatthattimeoverseeingtheoutreachprogrammeforthehomelessinthesubways,saidthatduring1989therehadbeenamarkedchangeinthetoneoflettersshewasreceivingfromsubwayriders.‘Atthebeginningoflastyear,thetenorofthoseletterswas“Pleasedosomethingtohelpthehomeless.”ButsinceAugustandSeptember,they’vebeensaying:“Justgetthemout.Idon’tcare.Justgetthemout.”’83
IfirstsawhundredsofhomelesspeoplewhenIvisitedSanFranciscointheearly1990s.EventhoughIwascarryingoutresearchinto
![Page 884: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/884.jpg)
housingIwasshocked,buttheAmericansaroundmehadbecomeusedtothesituationandsteppedoverthelivebodies.ThuswhatbeganintheStateshasspreadtoBritain.Inbothcaseswhatcamefirstwerethegovernmentpolicesmakingithardertosecureahome,thenthemasshomelessness,thentheacceptanceofmasshomelessness.IntheStatestheReagangovernmentof1980–88beganlegislationearly.By1989,whenGeorgeBushSeniorbecamePresident,theRepublicanshadsucceededincreatingablame-the-victimsea-changeinpublicopinion.TheThatchergovernmenttookalittlelongertosecurethepoliciesthatwouldresultinsomanymoreyoungpeoplelivingonthestreets,buteventuallyThatcher’s
![Page 885: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/885.jpg)
protégésmanagedtocreatethesamesea-changeinthinking:namelythatthosewhohavefallenonhardtimeshaveonlythemselvestoblame.Oncepeoplebecomeimmuneto
masshomelessness,theonlytimethehomelessaretreatedwellisintheimmediateaftermathofanearthquakeorsimilardisaster,whenmanydecentlyhousedpeoplebecomehomelessaswell.Butwhenhomelessnessbecomescommonamongaminorityandlittleisdonetoalleviateit,thehomelessbegintobeblamedfortheirownplight.Yetmanyofusseemtobeunawareofquitehowclosetothepossibilityofhomelessnessweare.Aquarterofallemployedpeople
inScotlandareonlyonemonthlypaychequeawayfrombecoming
![Page 886: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/886.jpg)
homeless.Ifaparentlosttheirjob,mosttwo-parentfamilieswithchildreninScotland,andalmostalllone-parentfamilieswithchildren(some56%ofallfamiliesintotal),couldpaytherentforonlythenextthreemonths.ByChristmas2012,about1%ofthisnumber,orover5,300children,werealreadybeinghousedwiththeirfamiliesinemergencyhomelessaccommodation.84
ItisnotlackofhousingthatiscausinghomelessnesstoaffectchildrenintheUK.Politicallythereisalackofwilltotackletheprivaterentedsector,includinghotelsandB&Bsprofitingoutofthehomeless.InLondon,wheretherearestillmorebedroomsthanpeople,itcancostcouncilsintheheartofthecapitalup
![Page 887: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/887.jpg)
to£350anighttoputafamilyupinexpensivehotelaccommodationthatiscompletelyunsuitableasemergencyaccommodation.85Yetthereductionintheavailabilityofhomesinthesocialhousingsector,andthe9November2012changeinlegislation,givecouncilsnooptionbuttheprivatesectorwhenitcomestorehousingthoseonlowincomes,includingthenewlymadehomeless.Themajorityoflandlordsjust
wanttheirhighrentspaidandthepropertykeptingoodorder,buttheimpactofmanyofthecurrentchanges,includingthesporadicandbadlyimplementedintroductionofUniversalCredit,meansthatallcouncilswillsoonnolongerbeabletofacilitatedirectpaymentsofhousingbenefitmoniestolandlords.
![Page 888: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/888.jpg)
Thegapbetweenrentsandbenefitsisgrowing,justasthegapbetweenhousepricesandwagesisgrowing.Allthisisveryconfusingfortenants,justasmortgagesareveryconfusingforbuyers(includinglandlords,whodonotreadthesmallprintandfindthattheirtrackermortgagesnolongertrackthebaserate).Thestatewelfarerulesarecomplexandconstantlychanging.Forexample,housingbenefitisnowsetonthe30thpercentile,ratherthanthe50th,ofassessmentsoflocalrents,andistobeupratedusingCPIratherthanRPI.86Buthowmanypeopleknowwhatthedifferencesbetweenthosetwoindexesare,letalonewhattheacronymsstandfor?Allofthismakesithardertohousepeoplewho
![Page 889: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/889.jpg)
arepoorer,andmorepeoplethenenduphomeless.Underlyingalltherecentchanges
tolawandregulationappearstobeacoalitiongovernmentdesirethattheprivatesectorinEnglandshouldbeabletomakemoremoneyoutofthehomeless.In2012twounnamed‘privateproviders’wereawardedcontractsbytheGreaterLondonAuthority,currentlycontrolledbyConservativeMayorBorisJohnson.Thecontractscouldbeworthasmuchas£5millionintheshortterm.Theyaredesignedtoallowthoseprivatecompaniestotacklewhatistermed‘entrenchedroughsleepers’.‘Entrenched’isdefinedaspeoplewhohavebeenrecordedaspersistentlysleepingroughinthecapitaloverthecourseofthelasttwo
![Page 890: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/890.jpg)
years:some831suchhomelesspeoplewereidentifiedin2011and2012.Theseareseenasthe‘hardcore’oftheestimated5,678peoplesleepingroughatsomepointinLondoninthefinancialyear2011/12.Theorganizationencouragingallthis,liaisingbetweenthelocalauthorityandthesuppliers,isarathershadowygroupcalledSocialFinance.87
ThetwoprivateproviderswhohavebeenawardedthecontractstoclearthehomelessfromLondon’sstreetswillberewardedfortheir‘investment’iffivecriteriaareachieved:first,a‘coreoutcome’–areductioninthetotalnumberofrecordedroughsleepers;secondly,areductioninthenumberofindividualswhoareseentobe
![Page 891: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/891.jpg)
sleepingroughoverasuccessionofquarters;thirdly,aconfirmedsustainmentoftenancyinanon-hostelsetting;88fourthly,aconfirmed,‘successful’reconnectiontoacountryinwhichtheindividual‘enjoys’localconnections(aeuphemismforwhatmaybedeportation);and,fifthly,adecreaseintheaveragenumberofA&Eepisodesperpersonperyear.Allthisisdefinedas‘progress’,althoughthesetargetslookasiftheyareconcernedmorewiththecosmeticappearanceofLondonthanwiththeplightofthehomeless.Theseguidelinetargetsappearon
thewebsiteofSocialFinance,whoseboardmembersincludehedgefundmanagers.89SocialFinanceisn’toneofthetwoprivateproviders;itisa
![Page 892: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/892.jpg)
privatebrokerbetweengovernmentandtheproviders.Ithelpsthegovernmenttoremainatarm’slengthfromtheaction,shieldsitfromanyblame–anecessaryprecaution,shouldthoseprivateproviders,motivatedbyprofitandunderpressuretoachievefinanciallyrewardingtargets,betemptedtoresorttomeansthatvoluntaryorganizationsmightregardasunethical.Thecompaniesinvolved(which
arehardtoidentify,possiblyduetocommercialconfidentiality)wouldnodoubtstresshowethicaltheyare;andyet,readingallthedetails,itishardnottospeculatethatthenumberofindividualsbeddingdownonthestreetswillbereducedbyharassingthehomeless–byforcingthemto
![Page 893: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/893.jpg)
findplaceswheretheyarenotseenastheyaresleeping,withinmulti-storeycarparks,forinstance,orundercanalbridges.‘Asustainedtenancyinanon-hostelsetting’couldbeintheworstofRachman-stylebedsits,withnosupportorsocialization.A‘confirmedreconnectiontoanothercountry’soundsnotdissimilartotheNationalFront’ssuggestionofofferingpeoplefromtheCaribbeanaone-wayflight‘home’inthe1970s.AdecreaseinA&Eepisodesmightbeachievedbydirectinganillhomelesspersontoanother,non-A&E–andpossiblylesssuitable–facility.Werethedeathrate–highanywayforroughsleepers,whohaveanaveragelifeexpectancyofdyingintheirforties90
–toincrease,afallintheirnumbers
![Page 894: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/894.jpg)
mightbeachieved.Notnecessarilygoodoutcomes,unlessyouthinkadeadroughsleeperisbetterthanonewhoisbreathing.Attimestheeffortstoremoveroughsleepersandthetechniquesusedtoestimatetheirnumbersareworryinglyreminiscentofthebadscienceofbadgerculling,whichwasbeingtenderedforatthesametime.Thenumberofroughsleepersin
theUKrosebyalmost25%injustthetwelvemonthstoautumn2011.MaterialnowtaughttochildreninschoolsinBritainexplainsthateveryyearsome75,000childrenintheUKwillwakeuphomelessonChristmasmorning.Afurther1.6millionBritishchildrenliveinhousingthatisovercrowded,temporaryorrun-down.The2011censusrevealedthat
![Page 895: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/895.jpg)
theproportionofhomesrentedprivatelycontainingchildrenhassoaredby69%since2001.Othersurveysfindthatcurrentlysome44%ofBritishpeoplebelievetheirchildrenwon’tbeabletoaffordtobuytheirownhome.AllthesefactsarebeingtaughttochildreninschoolsinBritaintoday.Whatmusttheythinkoftheirparents?91Whatthechildrenarenottoldisthatifhousingrightsarenotimproved,andmortgagedefaultersarenotgivensomesecurityoftenure,allthesenumberswillinevitablyrise.Perhapstheywillstarttoworkthisoutforthemselves?Thosepeoplemadehomelesswith
childrenatleaststillhavealimitedrighttobehoused,asafamily,byalocalauthority,althoughnowonlyin
![Page 896: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/896.jpg)
aone-yearletinwhatisoftenthemostshoddylocalprivateaccommodation.Butincreasinglythatrightisbeingignored.Localauthoritiestrytopassthebucktoeachother,topassthefamilyontoanotherarea,butwhenthatisnolongerpossiblethehomelessfamilyisoftenplacedinwhatissupposedtobetemporaryB&Baccommodation.Cynically,inJune2013,thegovernmentaskedlocalcouncilswithsomeofthe760familieswhohadbeeninB&BforoversixweeksbyJune2013totakepartinabiddingauctionforfundstorehousethem.92ThousandsmoreareinB&Batanyonetime,butforlessthansixweeks.Homesoftenbecomesecurityfor
smallbusinesses.InFebruary2013a
![Page 897: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/897.jpg)
Londonfamilyoffour–amotherwiththreechildren–werebeinghousedinasingleroom.Onlyafewweeksearliertheyhadbeenlivinginafive-bedroomhouse,butthenthehusband’sbusinesswentbustandthefamilyweremadehomelesstopayhisdebts.SheandthechildrenweremovedtoadifferentB&Beveryfortnightfortwomonths.Itcostthecouncilalmost£1,000aweektoprovideoneroominLambethforthem.Asthemotherexplained:‘There’snoplacetocook,nofridge,nowi-fi,nowashingmachine,noplacetoputourthings.Thewholeplaceendsupsmelling.’93Thechildrenalsodidnotreallyknowwheretheywereorwhatwashappening,becausetheywerekept
![Page 898: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/898.jpg)
movingbetweenonetemporaryaccommodationandanother.Thereportfromwhichthisstory
wasdrawnrevealedthatthenumberoffamiliesbeinghousedillegally–thatis,formorethansixweeks–insuchaccommodationhasrisenninefoldsince2010.FromMay2010,whenthecoalitiongovernmenttookoffice,upuntil2012therewasariseinthenumberoffamiliesinsuchdirestraitsofalmost1,000%!In2013itwasrevealedthatthenumberoffamilieslivinginB&BinLondonhadsoaredagaintoover2,000.ThehomelesscharityCrisisdirectlyblamedgovernmentcutsfortherise.94
Therearetoofewstatisticskeptonhomelessness;andthegovernmentiskeepingtrackoffewergroupsof
![Page 899: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/899.jpg)
peopleallthetime.InEnglandtheDepartmentforCommunitiesandLocalGovernmentdoesn’tcountthenumberofsingleadultsaskingforitshelpotherthanthosewhohaverecentlybeenincare.ItnolongercountsthosewhocomeforhelpwhowereintheArmedForces,orsleepinginnightsheltersorhostels.Nordoesittrytoestimatethenumbersthataresofa-surfing.Bycontrast,inDecember2012,thedevolvedScottishparliamentextendeditshomelessnesslegislation,sothatanyonefindingthemselveshomelessthroughnofaultoftheirownwasentitledtosettledaccommodation.95ThiswassouncontroversialtherethatithadbeenpassedunanimouslybytheScottishparliament.
![Page 900: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/900.jpg)
ThereisaperceptionthatrecentroughsleepingincreasesinLondonaremostlyconnectedwitharrivalsfromEasternEurope;thatthishomelessnessistheresultofaspecificsetsofcircumstances.Buttherearenostatisticstosuggestthatthisisthecase,whereastherearenumerouswell-researchedclaimstoshowthatoneBritishfamilywithchildrenisbecominghomelesseveryfifteenminutesandthat,ifthecurrentincreaseweretocontinue,by2015over10,000familieswithchildrenwillbehomelessinEngland.96Butby2015wemaynotknowifthishasoccurred,givenhowthestatisticalserviceswerelyuponarecurrentlybeingsoreadilydisbanded.
![Page 901: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/901.jpg)
NodepartmentismoreenthusiasticincuttingstatisticsthanEricPickles’sDepartmentforCommunitiesandLocalGovernment,thedepartmentresponsibleforhousing.TheNationalHousingFederationexplainsthat‘Beyondthesix-weekmark,nodataiscollectedonlengthofstaysinB&Bs.Thismeanswedonotknowhowlongfamiliesarereallyspendinginthistypeofaccommodation.’97ThisapparentlackofinterestinsuchinformationmightappeartositoddlywithPickles’sfrequentpronouncementsthathecaresdeeply,andwithhispersonalroleasatrusteeofthehomelesscharityBrentwoodFoyer,whichhadfortybedspacesinMarch1999.98BrentwoodFoyerwasstill
![Page 902: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/902.jpg)
lookingafteryoungsinglehomelesspeopleagedoversixteenandundertwenty-fourin2012.99ItwouldbeworthaskingPickleswhatheknowsoftheoutcomesofthehundredsofyoungpeoplewhomusthavepassedthroughitsdoors,stayingbetweensixmonthsandtwoyears,since1999.Shelterhasissueda‘classroom
kit’tohelpteachersgivelessonsabouthomelessnessandtheissuessurroundingit.Forexample,childrenareaskedtoimaginetheyaredifferentpeopleinanationaldebateonhousing.Onesuggestionistoimaginethatyouareanenvironmentalist:
Youareagainstthenewdevelopment.Youareunhappyabouttheaddedtrafficthenewdevelopmentcould
![Page 903: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/903.jpg)
bringtolocalroads,andyouwonderwhetherthenewhomeswillbeascarbonneutralastheycouldbe?YouareworriedthatnewdevelopmentsareconcretingoverBritain’sgreenbeltandthatareasofbrownbelt,whichcanbevaluableurbanwildernesses,arebeinglosttoo.Youthinkthatitmightbebettertorestore
oldhousesthanbuildnewones.100
Thereispotentiallygreatsignificanceinthedevelopmentofthisclassroomkitandsimilarinitiatives.Ifyoungpeopletodayaretaughttherealityofjusthowbadlyhousedmanyoftheirpeersare,orhowbadlyhousedtheyareincomparisonwithmostofthechildrenlivingintherestofEurope,thiscouldprovetobeoneofthewaysinwhichourcultureonhousingcanbechangedforthegenerationstocome.Achildfindsithardtoimagineever
![Page 904: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/904.jpg)
havingtopayforahome,butitisthechildrenoftodaywhowillbemostaffectedbythechangesbeingmadebythecoalitiongovernment,andtheirchildreninturn.HousingpricesinBritainarehigh
partlybecausesofewpeoplehavesomuchcontroloversomanybuildings.Astheproportionofpeoplewhoaretenantsincreases,sotoowillthepoweroflandlords.Andthoselandlordscanseeanever-growingmarketforthebedroomstheyhavetorentout.AsShelter’sclassroomkitexplains:‘England’spopulationisprojectedtoincreaseby10millionbetween2010and2035andbenearly18millionhigherby2061.’Mostofthatincreasewillbethechildrenborntotoday’schildren.Alargepartoftherestwillbetheir
![Page 905: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/905.jpg)
grandparentsandparentslivinglonger;asmallerpartwillbemoreimmigration;butallofthisisadditionalforeseenprofitforlandlords.Shelter’sclassroomkitfor
schoolteacherscontinuesbyexplainingthatthegovernment’slatesthouseholdprojectionshaveindicatedthatthereisanacceleratingpressurefornewhousing,suggestingthatanadditional5.1millionnewhouseholdsareexpectedbetween2011and2031.Thiswillbeconsiderablymorethanthenumberaddedoverthetwoprevioustwenty-yearperiods:3.6millionmorehouseholdsbetween1991and2011and3.2millionmorebetween1971and1991.Whatthekitdoesn’tsay,however,isthatwehavebuiltmore
![Page 906: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/906.jpg)
roomsthanwehavegainedpeopleduringboththoseprevioustwotwenty-yearperiods;thecharityconcentratesondwellingnumbers,notdwellingsize.TheShelterclassroomkitnext
givesteachersdetailsofthegrowthoccurringdisproportionatelyinthesouth-easterncornerofEngland:‘withtheLondon,south-eastandeastregionsaccountingforoverhalf(52%)ofthe2010–35populationincreasedespitecomprisingonly30%ofEngland’sarea’.101Ifschoolchildrencanbeexpectedtocopewiththeseissues,andsuchfigures,whyistherenotawiderdebateamongtheirparents?Perhapsitneedstobesetasadulthomework?Thecurrentexpectedlevelofpopulationincreasewillrequiremore
![Page 907: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/907.jpg)
house-building–butnotsoverymuchmoreifweusewhatwehaveinbetterways.102
Solet’sexploresomeareasinwhichwemightbeabletousewhatwealreadyhavemoreefficiently.Onegoodplacetostartiswithsquattersandhowtheymighthelpustogetemptyproperty,includingcommercialproperty,intoresidentialuse.
SQUATTINGANDREFURBISHMENT
Whatthesquattingdisputeboilsdowntoisasplitbetweenthosewhoconsiderprivatepropertytobesacred,andthosewhowouldprioritizetherighttoshelter.Fewpeoplewouldhappilyforfeitasecondhometosquatters,butnordoesitfeelmorallyjustifiableforanationtohaveanestimated930,000empty
![Page 908: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/908.jpg)
homeswhilepeoplesleeponthestreets.
–SteveRose,journalist,2012103
Peopledon’tsimplyacceptbeingmadehomeless.Manybecomeresignedtoit,butothersdosomethingaboutit.Ifyouarehomelessandnoorganizationwillhouseyouadequately,youmayhavetohouseyourselfinemptyproperties–tosquat.Almostallsquattinginvolvesanemptypropertythatisnotbeingused.ItisarathermoreeffectivemethodofusinggenuinelyemptyroomsthantheBedroomTax.But,whiletheUKgovernmentoftentalksaboutpeopledoingthingsontheirowninitiative,squattingisoneinitiativeitdetests.So,since2012,ithascriminalizedwhathadbeen,untilveryrecently,onlyaciviloffence.
![Page 909: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/909.jpg)
WhiletheUKgovernmentjustifiestheBedroomTaxwiththeexcusethatmoneymustbesavedbyfillingeverylastbedroominsocialhousing,itnonethelessmanagestofindalotofmoneytoattacksquatters.Campaigners‘havecalculatedthecostofcriminalizingsquattingtobeprojectedtocostupwardsof£790millionoverafive-yearperiodfollowingintroductionofthelegislationin2012’.104Themoneycouldbebetterspent.Itistruethatsquattingcancause
greatproblems.Sometimes,ofcourse,squatterscanbeill-behavedorevendestructive,butrarelydosquatterswishtoputthemselvesortheirhomesinperilinsuchaway.Squattingisbyitsnatureprecarious
![Page 910: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/910.jpg)
–andsquattersoftenfeeltheyhavenooptionbuttosquat.Thefirstsquattertobeimprisoned
underthenewlawwasAlexHaigh.AlexhadmovedfromPlymouthtoLondoninsearchofwork.Justtwenty-oneyearsoldandlivingwithtwoothersinavacanthousingassociationproperty,hewasarrested,triedandsentencedtotwelveweeksingaolinSeptember2012.HewouldhavebeenyoungenoughtobehousedinthedormitoryoftheBrentwoodFoyer,thecharitythatEricPicklesisatrusteeof,hadtherebeenasparebedthereatthattime.Buthewouldhavehadnochoiceabouthisroommates,andlikelynowherenearbywherehecouldfindgoodwork.Squattingisentrepreneurial;thereisalittlemore
![Page 911: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/911.jpg)
freedomtochooseyourfriendsandtolivenearplaceswhereyoucanbeenterprising.When21-year-oldAlexwas
imprisoned,aMinistryofJusticespokespersonisreportedbytheBBCtohavesaid:‘Fortoolongsquattershavebeenplayingthejusticesystemandhavecausedhomeownersuntoldmiseryineviction,repairandclean-upcosts.’105WhatthespokespersondidnotevenhintatisthattherearegoodreasonswhypeoplelikeAlexprefertherisksofsquattingtothealternativeofoffersfromthelikesofPickles’s‘foyer’charity.TheMinistryofJusticelookedonlyatthecostsfortheownerofavacantproperty,atthoseclean-upcosts,andnotatthecostsofinsecurityforsquatters.TheMinistryofJusticehas
![Page 912: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/912.jpg)
averynarrowviewofjustice.Almostallsquattedbuildingsareemptypropertiesboughtforinvestmentpurposes;andmostarevacantcommercialpremises.Awiderviewofjusticewouldadd
themiseryofthesquatterstothoseclean-upcosts;and,atanextreme,thefeelingsofsuicidebroughtaboutbyeviction.Awiderviewofjusticewouldconsiderthedespairyougetwhenyouaretrappedbydebtandnegativeequityinapropertyyouwishyouhadneverbeenfooledintobuying.Itwouldtakeintoaccounthowa21-year-oldmightfeelaboutbeingplacedinadormitoryforthehomelessoutoftownwherethereisnoworkandlittlehope.Ifnecessary,allthesesocialevilscouldhaveamonetaryvalueattachedtothemto
![Page 913: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/913.jpg)
helppeoplewhofindithardtounderstandfeelingstodevelopabettersenseofjustice.Thereisagrowingbodyofnasty
right-wingopinionthatopposeswhatitcallsamorelavishsystemof‘socialhousing’onthebasisthatitcreatesanincentiveforindolence.Suchrhetoricisamodern-dayversionoftheVictorianregressivewhobelievedthathungerwasafarmoreeffectiveweaponthantheoverseer’swhipinencouragingworkerstotoil.Thosewhotodayareagainstthehomelessbeingdecentlyhousedarenotsoideologicallydifferentfromtheirpredecessorswhoopposedhealthcare,includingthe1930seugenicistswhobelievedanationalhealthservicewouldonlyhelptheweaktosurviveandbreed.
![Page 914: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/914.jpg)
Everyoneshouldbeabletobenefitfromthequietenjoymentofahome,freefromnoise,fromharassmentandfromfear.Butamongtherich,thefarrightseesthequietenjoymentoftheirproperty,nomatterhowbigtheirpropertymightbe,asbeingasimilarbasicright.Thatenjoymentextendstotheirwealth,theirhomesandtheirland,andtotherighttogrowtheirlegacyeverlarger.However,astheycannotliveinalltheirhomesatthesametime,theyleavealotofpropertyempty,andwhatshouldbearealhomeforarealfamilybecomesjustemptypropertygatheringdust.Theconceptofhouseholdshaving
therighttothequietenjoymentoftheirhomewasintroducedtotrytoprotecttenantsfrombeingharassed
![Page 915: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/915.jpg)
bylandlordsandloansharks;itspurposewasnottoprovideacovenantfortheprotectionoftherich.Justasfreedomofspeechdoesnotgiveyoutherighttoshout‘fire’inacrowdedtheatre,sothequietenjoymentofyourhomedoesnotgiveyoutherighttokeeppropertyemptyattheexpenseofotherfamilies.Itisarenewedconceptionofthe
apparentsanctityofprivatepropertythatis,perhaps,therealimpulsebehindthenewanti-squattinglaws.Thatwouldcertainlyexplainwhythenewlawsarefailingsodramatically.InApril2013morethantwodozenlawyersrevealedthatnotoneconvictionunderthenewsquattinglawshadprotectedowner-occupiers;instead‘theeffect…hasbeento
![Page 916: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/916.jpg)
facilitatekeepingpropertiesempty,despitethecurrenthousingcrisis.’106
Whywouldagovernmentchangethelawtokeepbuildingsempty?Atanyonetimebetween20,000
to50,000peopleintheUKsquat,almostallinabandonedbuildings,andonlyveryrarelyinonethatsomeoneelseactuallywantstolivein.Bydefinitionitishardtobemoreprecisethanthat;squatterstendnottobeagroupwellcoveredinsurveysorbyacensus.Butwedoknowthattheynumberaroundjust0.1%ofthepopulationoftheUK,orperhapsevenless.Worldwide,atenthofallpeoplesquat,aratethatisonehundredtimeshigherthanthatintheUK.MostofthepoorworldisfarmoreinequitablethantheUK.Andthemoreinequalitythereis,the
![Page 917: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/917.jpg)
higherbecomestheproportionofpeoplewhohavetosquat.Itisonlyinajustsocietythatthesquattingratecanfalltozero.Peoplesquatbecausethe
alternativesareworse–betheytheEricPickles’stypeof‘foyer’charityortheprivatesectorprofit-makingequivalent.Thecurrentgovernmentwantstocriminalizesquattingevenfurther,extendingthelegislationtoallowthepolicetoarrestandimprisonpeoplewhoaresleepinginabandonedcommercialbuildingsandoldbarnsandotherout-buildings.Yetsuchacrackdownwillproveeconomicallyunviable.Themorepeopletheyforceoutofsquatting,themoretheyforceintoemergencyhomelessnessaccommodationorthecheapestofroomsintheprivate
![Page 918: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/918.jpg)
rentalmarket,orontothestreet,whichwillmakethingsworseforeveryone.Anexampleoftenhelps,and
hundredsofthousandsofpeopleworldwidewereshownwhatisgoingwrongtodayinBritainwhenBloombergreportedonwhatjustoneplanningofficerwasfindinginoneLondonboroughin2012.ChristineLyonsistheChiefPlanningEnforceroftheLondonboroughofNewham.WhatshedescribedtoBloomberg’sreportersinthesummerof2012evokedscenesreminiscentofVictorianEngland.SheshowedthemillegallyrunpropertiesoccupiedbytenantswhowerecrammedintowhatthatTVchanneldescribedasslum-likeconditions,withentirefamilieslivinginsingledirtyroomsandin
![Page 919: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/919.jpg)
thosegardensheds.Asthechannelcrudelyputit:‘Surveyingthestinkingtoiletandfly-infestedkitchenareallinaday’sworkforChristine.’107ThiswashardlyagreatadvertforLondon.Whydopeopleputupwiththese
conditions,andwhydoLondonersasawholeallowtheircitytocontainsuchhousingmisery?TheinternationalviewersofBloombergmighthavewonderedwhatisgoingonintheUK.Perhapsthosepayingrenttoliveinsuchsqualoraretooafraidtosquatelsewhere.OnemaninthereportonChristine’sworkfoundthatwhathethoughtwasacupboardinthekitchennexttothefridgeturnedouttobetheplacesomeonewasrentingtosleep.Thehousewaslicensedforfivetosleep
![Page 920: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/920.jpg)
in,butitturnedoutthatthereweretwelveoccupants.Thelandlordwasfined–buthowlongbeforeanothertwelvedesperatetenantsmovein?Squattinggenerallyinvolvesaless
crampedexistencethanthebottomendoftheprivaterentedmarketorafull-uphomelessshelter;squattingisalsomoreaffordableandfreerinmanyothersenses.Youarefreeoftheexpenseofrenting,freetochoosewhereyouliveandhowyoulivethere.Squattersoftenrenovatetheemptypropertiestheyoccupy.Whywouldn’tthey?Thereclearlyisaneedforthatrenovation,butthereshouldbenoneedforsomanytosquat.Thereisenoughhousingforall,eveninacrowdedislandlikeBritain,evenintheheartofLondon(whereitreallycannotberepeated
![Page 921: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/921.jpg)
enoughthattherearestillmorebedroomsthanpeople).Whatwelackisahousingpolicythatiscollective,notindividualistic.Theincentivetolookafterjustour
owninterestscanbegreat.Ifyouareamortgage-payerhopingtosellinfuture,youmaythink:don’tdoupthehome,justpaintoverthecracksandsellitataprofit.Ifyouarealandlord,youmaythinkofaskingyourtenantsforanother£10aweek.Theycan’treallyaffordit,butyou’llgetanextranight’sskiingforthatextra£520yougainayear.Yougetanextra£3,120ifyouputuptherentwhenyouhavesixtenantssleepinginthehouse!Similarly,ifyouareatenantlivinginasocietypromotingmoreandmoreindividualism,youmightwellthinkofillegally
![Page 922: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/922.jpg)
sublettingyourhousingassociationflat.Everyoneelseisonthefiddle–whynotyou?Ultimatelyitisthinkingasanindividualandthenbeingfrustratedwithyourlife,withtheideathatyouhavetoolittle,whichbolstersalltheseattitudes,including,attheextreme,thethought:whynotgivetheblokesleepingroughakickingwhenyou’vehadadrink?He’sscum.Contemptgetsintotheverylanguageweuse;whenwetalkaboutsomepeopleastaxpayers,andothersaslivingonwelfare,wegrowcontemptuous.Andcontemptsoeasilybreedsmorecontempt.
![Page 923: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/923.jpg)
![Page 924: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/924.jpg)
8
Solutions
Theprimeministerurgedpeopleto‘trust’theBankofEngland,whichhasbeengivenanenhancedroleinmonitoringtheeffectofthe[‘help-to-buy’]schemeonprices…MrCameronalsousedhisAndrewMarrinterviewtostressthattherewouldbeno‘mansiontax’ifhewasprimeministerafterthenextelection,makingitclearthatthiswouldbeaso-called‘redline’–apointhewouldrefusetoconcede–incoalitionnegotiations.
–BBCNews,September20131
Sometimesitistemptingtosuggestthatpolicymakersshouldsimply
![Page 925: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/925.jpg)
lookatwhatthecurrentPrimeMinisterissuggestinganddotheopposite.Butprogressivepoliticsoftenmovesslowly,and,justwhenyouthinkthereisnohope,itmaterializes.Whenbettersolutionsareimplemented,oftenatfirstyouhardlyrecognizethem,theyhavebeensowatereddown.Thenyousaythattheyarenotenough.Nextyouchangewhatitwasyouweredemanding.Youkeeponfighting.Buteventually,oneday,youlookbackandsuddenlyrealizehowfaryouhavecome.Thatishowchangeshavebeenwonelsewhere;itishowtheywerewoninthepast.Itishowtheconsensusbecomessomethingelse,oftenimperceptiblyslowly;itishowprogressismade.
![Page 926: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/926.jpg)
THERIGHTNOTTOBERIPPEDOFF
…thepastwasbetter.Forthefuturetobebetter,weneedtobreakwithaneconomicmodelthatnolongerworks.
–PaulMason,BBCEconomicsEditor,
20122
Thecrisisofhousingispartofawidercrisis.Thosewhocurrentlybenefitfromthecrisishavemorefinancialcontroloverpoliticiansthanthosewholose.IntheUK,arecentinvestigationfoundthatbanks,insurers,hedgefundsandprivateequityfirmspayanestimatedannual£15.8milliontothirty-eightpublicaffairsconsultancies(includingseveralpublicrelationsfirms)tolobbythegovernmentontheirbehalf.Ontopofthatspending,currentlyoneinsixmembersoftheHouseofLordsbenefitspersonally
![Page 927: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/927.jpg)
fromdirectfinanciallinkswithfinancialservicesfirms.AmajorityofthemembersofthecommitteeoftheHouseofLordsthatscrutinizesthebudgetarealso‘paidbyfinancefirms’.3Noneofthisiscalledcorruptionbecausetheselordsdeclaretheseinterests,asifthedeclarationactuallyabsolvesthem.IntotaltheBritishfinancial
servicesindustryisestimatedtospend£92millionayearlobbyingbothpolicymakersandso-calledmarketregulatorstoactintheirfavourratherthaninthefavourofordinarycitizensandconsumers,orofresidents,familiesandhouseholds.4Infuturechildrenwillbetaughtabouthowunelectedmeninthepayofbankssatinachamberofthehousesofparliamentandacted
![Page 928: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/928.jpg)
toprotectafewrichvestedinterests;butasyetthatinformationhasnotreachedany‘classroomkit’.Partoftheunderlyingreasonfor
ourcurrenthousingcrisisisthetolerationofendemiccorruptioninourlegislatureandlegalandfinancialsystems.Whatallowedthatcorruptiontoincreaseweretheproblemsassociatedwiththegrowinginadequaciesofouroldhousingsystems,mostlysetuparoundacenturyago:statehousing,buildingsociety-fundedhousing,charity-providedhousing.Statehousinghasbeen‘residualized’andisnowreservedonlyforthoseperceivedasfailures;buildingsocietieshavemostlybeenprivatized.Charitablehousingassociationsnowmoreoftenbehave
![Page 929: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/929.jpg)
asifmotivatedbyprofitthanbycharitableconcern;oftenthistransformationiscalledputtingthemona‘soundfinancialfooting’.Financingthebuyingofahouse
throughamortgageisincreasinglyriskyformanypeople,giventhatthenatureofworkisbecomingincreasinglyprecarious.Thestateisnolongerseenasprovidingasafety-netforall,onlyaselectedfew,thedeserving,sosocialhousingisstigmatized.Ineraswhentherichtakemore,evencharitiescanbecomelesscharitable,alittlemoremean-spirited,alittlemorepejorative,describingtheiractionsasphilanthropyratherthanascampaigning.Theyhelpthepoortobudgetbetterinsteadofworkingharderagainsttheinjusticeoftheir
![Page 930: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/930.jpg)
poverty.Ihavewatchedthishappenoverthecourseofmylifetime,andthisoccursevenwhen,andperhapsbecause,thosewiththemosthaveevermoreto‘give’.Currently,acrossthedeveloping
world,peoplearebuyingfewerhomes,stayingintheircurrenthomesforlonger,borrowinglessiftheycan,slowlypayingbackdebts–and,insodoing,deflatingtheeconomy.Manyofthesetrendsreadlikegoodsigns,buttheydon’treflateaneconomydependentonever-growingconsumption.Whenpeoplearepessimistic,theirbehaviouralters;theydobudgetbetterwithouthavingtobetold.Fouryearsafterthecurrentcrisisbegan,inApril2012,some28%ofresidentsinGreatBritainstatedthattheythought
![Page 931: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/931.jpg)
theirpersonalfinancialsituationwouldgetworseoverthenextsixmonthsandonly22%thoughtthattheirsituationwouldgetbetter.Forthemajority,theirfinancialsituationdeteriorated.5
Thinkaboutwhatelsegoeswrongwhenhousinggoeswrong.Howhardisittorecruitschoolteachersinacitywherethepricesandrentsareastronomical?Howeasyisittogetpeopletomoveintoareaswherethehousingissocheapthattheysuspectsomethingisgoingwrongwiththelocaleconomy?Housingcoststheleastintheplacesthatneedthemosthelp,theplacesthatmostneedpeoplewithdisposableincome.But,forsomeperverseeconomicreason,lowhousingpricesarenotseenasattractive.Migrantsfromoutsidethe
![Page 932: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/932.jpg)
UK,andyoungmigrantswithinthecountry,tendtogotowherehousingcoststhemost,toLondonmorethananywhereelse.Butmigrantscomeonlywhenitisworthcoming,whenthereismoneytopayforjobstobedone,whentheyplantoearnratherthantospend.MervynKing,theformer
GovernoroftheBankofEngland,explainedthat‘mostofthehugedebtsaccumulatedbybankscouldbetiedtothehugebonusesexecutivesreceivedasrewardfortheirlending.’6Thosehugebonusesandtheimpressiontheygave–thatbankersweresimplyonapersonalmissiontoenrichthemselves–createdgreatmistrust.Thatmistrustofthebanks,themainmortgage-lenders,nowclearlyreachesrightto
![Page 933: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/933.jpg)
thetop,toBankofEnglandgovernors.ThelawsarebeingchangedataEuropeanleveltotrytobettercontrolthebankers’activities,andhopefullytheactivitiesofmanyotherswhotrytoprofitbyinsertingthemselvesbetweenahomeanditsoccupant.However,theUKgovernmentistryingtopreventthosechanges(inBrussels)toallowbankerstotakeasmuchmoneyinbonusesastheylike.7
Interestingly,inScotland,thefollowingfeesarenowunlawfulwhenchargedforpeopletryingtorentahome:feesforcarryingoutcreditchecks;feesforcarryingoutreferencechecks;chargesforcheckingandpreparinganinventoryofitemsinaproperty;anyadministrationchargetorenewan
![Page 934: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/934.jpg)
existingtenancy;anynon-refundable‘holdingfees’orsimilarpaymentasaninducementtograntatenancy;chargesforarrangingduplicatecopiesofthelease;apaymenttotransferformallyatenancytosomeoneelse(knownasan‘assignment’);andtheprovisionofoverpricedfurniture–includingthesaleoffurnituretoatenantforanexcessiveprice.InWestminster,manywoulddescribethatastoomuchregulation,unlikeinHolyrood.In2012ShelterScotlandlaunched
acampaigntoencourageprivatesectortenantstotaketheirlettingagentstocourttowinbackmoniestheyhadbeenwronglycharged.Onetenant,RachelRyan,saidofhersearchforahome:‘Weeventuallyfoundaflatthatwelikedand
![Page 935: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/935.jpg)
decidedtoarrangeaviewing.Theagentthatshowedusaround,answeredourquestionsabouttherent,deposit,andwhenwecouldmovein,buttheonethinghefailedtomentionbeforewepaidthe£250non-refundable“holdingfee”wasthatwewouldalsobeaskedtopay£175inagencyfeesand£35VAT.’8
Thatmeantthataswellaspayingtwomonths’rentinadvance–whichcameto£1,275–Rachelandherpartnerhadtopay£460inonelumpsumtotheagentiftheywantedtosecuretheflat.RachelcontactedShelterforadviceandsecuredarefundofalltheillegalcharges.IntotalShelterScotlandhelpedseventy-threepeoplestartproceedingsthatallowedthemtoreclaimover£11,400inthefirst
![Page 936: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/936.jpg)
twenty-fourhoursoftheirwebsite’soperation.9
Thatwasspring2012.BytheNovemberofthatyeartherehadbeena43%increaseincallstothecharity’shelpline,andShelterScotlanddeclaredthat‘Sofar,morethanaquarterofamillionpoundsinclaimshavebeenmade.’10AllthiswasachievedbyjusttwoShelterScotlandworkers.Thatisanannualtakefromunscrupulouslandlordsofover£125,000each.Ifyoueverthinknothingcanchange,looktoScotlandandtothiswork.However,realsuccesswouldbefortheShelterwebsitetonolongerbeneeded.Perhapslettingagentsshouldbeprosecutedfortheftandfraudwhentheycommitit?Theymightthenstarttopolicethemselves.
![Page 937: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/937.jpg)
Itisnotimpossibletoimagineadaywhen,tobewellhoused,wenolongerrelyontheactionsofcharities,evenonesaslaudableasShelterorCrisis,bothsetupafewdaysafterthefirstbroadcastoftheBBCtelevisionplayCathycomehome,in1966.Butcurrentlythatdaydoesseemratheralongwayoff,giventhecurrentUKpolicydirectionandthecontinuedrelianceofoureconomyonanoverheatedhousingmarket.Itneednotbelikethis.Wenolongerdependoncharitiestoprovidehealthcare.Peoplenolongergotothecharityhospital.Suchhospitalswerealmostallnationalizedin1948.Therecentincreaseinprivate
provisionwithintheNHSisastepbackwards,butinhousing,formost
![Page 938: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/938.jpg)
peopleinBritain(whodonotrelyonsocialhousing)wenevertookthestepforwardthatwasneededinthefirstplace.Implicitinthatstepistheideathatallshouldbewellhousedandnooneshouldprofitgreatlyoutofhousing.Ifyouthinkthataspirationfanciful,themostobviouscorrelateishownotrelyingoncharityfundinghaslargelytransformededucationinBritain;theschoolsthatclaimcharitystatustodayaremostlycharitiesfortherich.Andhardlyanyprivatefirmcurrentlyprofitsmuchfromdeliveringeducation,althoughsadlymoreandmorearetryingtoturnthatsectorintoamoney-spinner.Housing,healthandeducationareallessentials,buthardlyanyofuscanbecomeexpertsintheir
![Page 939: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/939.jpg)
consumption;thatisbecauseourpersonalinvolvementislargelythroughone-offevents,withchoicegreatlylimitedbycircumstance.Weneedadiversityofprovision,butwealsoneedprotectionfromthosewhowouldprofitbyhavingsomeinsideknowledge,vestedinterestsandfewerscruplesthanmost.
![Page 940: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/940.jpg)
![Page 941: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/941.jpg)
LansdowneflatswiththeLevertonGardenstowerblocksbehind,intheSharrow
neighbourhoodofSheffield.HousinghasalwaysbeenthedifficultthirdsectorofstateprovisioninBritain.The1944EducationActensuredthatfreesecondaryeducationwouldbecomeavailableto
all,asalsooccursintheUS.The1948implementationoftheNationalHealthServiceensuredthesameforhealthcare,whichwasapolicynotfollowedinAmerica.Whenitcomes
tohousing,andmoreinlinewiththeUS,governmentinBritainisincreasinglyconfiningitselftothedirectprovisionofhomesonlyfortheveryworst-off,withtheresultthatstatehousingisnowseenashousingforthepoor.Greaterstateinfluenceinhousingneednotmeanmorestatehousing.Itcouldincludecurtailingtheundueprofitthatismadefromprivatehousing,
controllingtheextentofcapitalgainsthatcanbemade,includingsellingonflatslikethese–flatsthatmayhavebeenboughtunder‘right-to-buy’.Morestatecontrolcouldalsomeanmorecontroloftherentsthatarechargedtotheprivatetenantsofwhatwasoncestatehousing.Itcouldincludeashiftfrombuildingsocialhousingunitstothenationalizationofsomeprivatehousingunder
various‘right-to-sell’schemes,allattheinstigationofthecurrentresidents.Whatever
![Page 942: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/942.jpg)
doeshappeninfuturewillnotreplicatewhathasoccurredinthepast:howwebecomebetter
housedisupfordebate.Butthefactthatwedoneedtobebetterhousedshouldbeobvioustoall.
CurrentlyintheUKprogressineducationandhealthseemstobeinreversegear,movinggraduallyawayfromnon-profitprovision,ashasbeenthecaseinhousingforsometime.Whenwewerelastaseconomicallyunequalaswearetoday,enoughpeopleactedsothathardlyanyoneinthepopulationhadtorelyoncharity.Thestepstakenweremany,andofteneachaloneappearedinsignificant;theyrangedfromstrikingtoimprovepaytovotingoutcorruptMPs.Lessobviouspoliticalactionscanbeimportant.Therewasagrowinggeneraldistasteofgreedfromthe
![Page 943: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/943.jpg)
1930sthroughtothe1970s.Peoplecommentedmoreandmoreopenlyonunfairnessandcampaignedforgreaterequality:betweenmenandwomen;betweenlandlordandtenant;andbetweenrichandpoor.Backwhensomuchofthe
provisionofhousingwasnotanentitlement–whennoonewouldhaveenvisagedB&Bsbeingusedforhomelessfamilies–backin1921,itwaspossiblefortheacademicRichardTawneytowritethat‘Noonehasforgottentheoppositionofferedinthenameoftherightsofpropertytofactorylegislation,tohousingreform…Eventothisday…anEnglishurbanlandlordcancrampordistortthedevelopmentofawholecitybywithholdinglandexceptatfancyprices,English
![Page 944: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/944.jpg)
municipalitiesarewithoutadequatepowersofcompulsorypurchase.’11
Thegreatchallengewefacetodayisthatmanypeoplehaveforgotten–orhaveneverbeentold–thatnotsolongagowewereamuchmoreequalsociety.Councilswould,forinstance,forcethepurchaseofpropertyfromprivatelandlordsatthelowpriceofitsactualworthanddemandthedemolitionoftheslums.Youcangetridoffilth.Ifonlywe
rememberedthat,ourpoliticalparties,charitiesandnewspaperswouldnotnowbesofeebleinpromotinghousingrights.Itisbecausewehaveforgottenwhatcanbeachievedthathousingcharitieshavebecomeincreasinglyessential.Oncemorechurchesandcharitiesarebeingreliedupontoprovidesoup
![Page 945: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/945.jpg)
kitchenstofeedhundredsofthousandsofpeopleintheUKatleastforpartoftheyear,noweachandeveryyear.12
ThediagrambelowwasproducedbyacharityestablishedtofightpovertyinAfricabutthatnowalsofocusesonwhereitbegan:inBritain.Wehavebecomelessabletolookafterourselves.Wehavebeentakenforarideandneedtorealizethatitistimetobecomelessstupid.
![Page 946: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/946.jpg)
Figure22.TheeffectofspendingcutsonpeopleinBritain,2010–16.
THERIGHTNOTTOBESTUPID
Forourworkersinthebigcities,freedomofmovementisthefirstconditionoftheirexistence,andlandownershipcouldonlybea
![Page 947: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/947.jpg)
hindrancetothem.Givethemtheirownhouses,chainthemonceagaintothesoilandyoubreaktheirpowerofresistancetothewagecuttingofthefactory-owners.Theindividualworkermightbeabletosellhishouseonoccasion,butduringabigstrikeorageneralindustrialcrisisallthehousesbelongingtotheaffectedworkerswouldhavetocomeontothemarketforsaleandwouldthereforefindnopurchasersorbesoldofffarbelowtheircostprice.
–FriedrichEngels,187213
Mostpeoplefindithardtoimaginegreatsocialchange.Theworldinwhichasingleindustrycandominateacityisending,buttheworldinwhicha‘generalindustrialcrisis’canharmthe‘market’valueofallpropertyiswithusasneverbefore.LooktoCyprusandtherunonitsbanksin2013,looktoGreece,toItaly,Spain,Portugal,overtoparts
![Page 948: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/948.jpg)
ofFrance,toallofIreland,uptoIceland,acrosstotheUSandtoDetroit–andofcoursetheUK.Attheheartofthehousingcrisis
arethosetheoriesthathousingisbestallocatedbyamarketopentospeculation.Shelterthenbecomesthecornerstoneoftheeconomy,themainsinkofwealthandsavings.Moremoneyisinvestedinhomes,lessinbusiness,andcertainlylessistrustedtothegovernment,eitherintaxorthroughthebuyingofgovernmentbonds.Thebest-offbelievetheirhomeswillearnthemaluxuryretirement.Theydon’tevenconsiderwhatthestatepensionmightbe;forthemitispocketmoney.Theworst-offknowthatiftheydonotstrive,theycouldeasilylosetheirhome.Beingmade
![Page 949: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/949.jpg)
homeless,apparently,isthethreatthatdrivesthemarket.Homelessnessisthestick;wealthisthecarrot.Marketsworkasefficient
distributorsofresourcesonlywhenpeoplecanoptoutofthem,whencustomerscansaytheywant‘noneoftheabove’.Butinhousingmarkets,evenifpeoplecannolongeraffordtopaythemarketrate,whetherinrentorthroughamortgage,theystillneedtobehoused.Theycan’t‘choose’togowithoutahome.Consequentlytheyareopentoexploitation.Looktomoreequitablecountries,wherethehousingmarketworksmuchbetter,wheretherearefewerhomelesspeopleandcheaperhomes.LooktoScandinavia,Japan,theNetherlands,AustriaandGermanyforcountries
![Page 950: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/950.jpg)
wherehousingmightbefarfromperfect,butwherebetterprovisionismadeforthemajority.14
Atparticulartimeshousingandpoliticscanbecomeaheadymixofenthusiasmandgoodwill.InBritain,inthe1950sand1960s,successivehousingministerspromisedtoconstructhundredsofthousandsmorehomesayearthantheirpredecessors.BothbeforetheFirstWorldWarandafterthe1970s,housingbecametheCinderellapolicy,theonethatneverquitegottothebudgetaryball.Itfeaturedneitherinthemanylistsofpastachievementsnorinmanifestodesires.Notevenanadministrationwithrealsocialambitionwasmuchcommittedtohousing,andfewpoliticiansviedtoholdtheportfolio.
![Page 951: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/951.jpg)
Whentimesgetreallybad,far-rightpartiesreartheirnastyheadandclaimthatcouncilhomesshouldgofirst(andhencealmostonly)topeoplewhoseparentsorgrandparentswerebornlocally.ThisisanattempttobringingbackanaspectofthePoorLaws,wherereliefwasgivenonlytothebest-behavedlocalsoftheparish.Byautumn2013itwasnottheremnantsofthefascistBritishNationalPartybutthemoremainstreamUKIndependencePartythatwasadvocatingthatonly‘locals’whohadfamilynearbyshouldqualifyforsocialhousing.15Sadly,attimestheLabourPartyhastoyedwithsimilarpolicies–‘Britishjobs’for‘Britishworkers’ratherthan‘Britishhomes’for‘Britishfamilies’–butnearenoughtocauseworry,
![Page 952: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/952.jpg)
althoughthankfullyLabourstillknowsthatracismremainsmoreunpopularthanimmigration.16
OneofthemostvocalsupportersofthelastLabourgovernment,PollyToynbee,explainsthat‘werememberallthatLabourdidbest:anNHSimmeasurablyimproved,20%morepupilswithfivegoodGCSEs,manymoreatuniversityorinfurthereducation,minimumwage,righttoroam,civilpartnerships,3,500SureStarts.’17But,insummingupthesupposedtriumphs,shesaysnothingaboutwhetherthenationwasbetterhousedafterthirteenyearsofthatLabourgovernment.Itwas;therewasahuge‘decenthomes’renovationprogrammecompletedbothwellontimeandonbudget;butthatwasnot
![Page 953: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/953.jpg)
news.Itdidnotevenbecomenewswhentheprogrammewasquietlyditchedin2010.18
Whenhousingroseupthenewsagenda,asthecrisisworsenedbetween2012and2013,ToynbeelookedbackatNewLabour’srecord.DespitenormallybeingacheerleaderforLabour,sheconcludedthat,despitetherenovationprogramme,whenitcametohousingandthefinancialcrisisintheUK,‘Labourisjustasmuchtoblame.GiganticbubblesinflatedhousepricestosuchadegreethatShelterestimatesachickenwouldnowcost£51iffoodpriceshadrisenasfastoverrecentdecades.’19Thereisnoneedforhousepricestohaverisensofarandsofast,butitdoeslookasifitwasaconsciousdecisiononthepartofthe
![Page 954: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/954.jpg)
lastLabourgovernmentnottotrytoreininthepricerises.Itwouldnothavebeennecessaryforthatgovernmenttohavebuiltmorehousinginordertobringthepricesdown.Rather,it‘just’neededasustainedprogrammeofrenovationofexistingstock,curbsonrentrisesandpoliciestopreventspeculation,includingbeefinguptheirpolicytopreventsomanyemptypropertiesbeingleftemptyforlong.IncontemporaryBritain,instead
ofanygovernmentplansforrefurbishmentandrenovation,rumoursofspeculativenewgreenbeltbuildingabound.Ithasbeensuggestedthat100,000homescouldbebuiltongreenbeltlandeastofBirmingham.ThiswouldintheprocesscreatetheUK’slargest
![Page 955: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/955.jpg)
conurbation,stretchingsomefortymilesfromCoventryupthroughtothenorthofWolverhampton.Thattheremightbesuchaplanwasrecentlydeniedbythegovernment–butitwas,nevertheless,revealedinaspeechbyAndrewMcNaughton,theChiefEngineerontheproposedhigh-speedraillineHS2,whichistorunfromLondontoBirmingham.Whenitbecameevidentthat,
undernewlawspassedbythecoalition,developerswouldbepermittedtobuildongreenbelt,DavidCamerontriedtodistancehimselffromanysuchschemes:‘hewasbroughtupinthe“beautifulvillage”ofPeasemoreinBerkshire,wherehelearnedtorideasayoungster.’20Theimplicationisthatthiscountry-rearedsonofa
![Page 956: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/956.jpg)
stockbrokerwouldnotcountenancesuchbuilding.However,hisgovernmenthaspassedtheplanninglawsthatwillallowit.Itisnotimpossibletoimaginea
chasmopeningupbetweentheConservatives–whoclaimthattheywillconservethegreenbeltevenwhilerelaxingplanninglaw–andLabourpoliticians,whosaytheywillencouragemuchmorenewhome-buildingbutwithgreaterstatecontrol.InhisSeptember2013conferencespeechEdMilibandpledgedthatLabourwouldensurethatprivatebuildersbuiltatleast200,000homesayear,everyyear,upto2020,amillionintotalinfiveyears,iftheyshouldgainpowerin2015.21HesaidtherewouldbearenewedNewTownsprogramme;
![Page 957: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/957.jpg)
thattownswouldbepermittedtogrowoutoftheir(oftenLabour-controlled)boundariesandintothe(oftenConservative-controlled)surroundingcountryside;thatdeveloperswhodidnotusetheirland-bankswouldlosethem;andthathewouldworktoputacommissioninplacebefore2015tomakeallthishappenshortlyafteraLabourelectionwin.Labour’sautumn2013plansoundedinspiring,butinfact(oncetheyearsofslumparefactoredin)itisjustareturntonormalbuildinglevels,anditdoesn’tbegintoaddresstheissuesofinequalityinhousing.WhatLabour’snewhousingpolicywouldensureisastabilizationofthesituation:enoughhomestocopewithrecentimmigration,butnoredistributionof
![Page 958: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/958.jpg)
ourexistingstock,tohelpusallfitbetterintowhatwealreadyhave.EdMilibandisthesonof
immigrants.Heperhapshasabettergraspthanthecountry-rearedsonofastockbrokerastowhymostpeopleneedjustonedecenthome,andhowprejudicecanleadthemtonotevengetthat.ButwhatMilibandisnotyetwillingtodoistotakeonthosewhohaveavestedinterestinthwartingamoreequitabledistributionofhousing.Intwooftherichest,butalsomost
inequitable,ofrichcountriesintheworld,politiciansonthecentre-leftpromisemorebutdeliverless.IntheUS,thePresidentisthegrandsonofamanwhowasimprisonedbytheBritish.22Unlikehisgrandfather,heisnorevolutionary,butObamadoes
![Page 959: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/959.jpg)
scaresomebankers,alittle.InMay2009BarackObamatoldtheCEOsofAmerica’slargestbanks:‘Myadministrationistheonlythingbetweenyouandthepitchforks.’23
HethenpromisedbeleagueredAmericanmortgagorshewouldrescuethem,butrenegedonthatpromiseforthreequartersofthosewhomhehadpledgedtohelp.HehadkeptthepitchforksawaybuthehadalsopreventedtheUSfromturningtowardsafairerfutureforhousing.AstheNewYorkTimes,apaper
normallysympathetictotheDemocrats,revealed:‘MrObamasaidinArizonaafewweeksaftertakingofficethatthegovernmentwouldhelp“asmanyasthreetofourmillionhomeownerstomodifythe
![Page 960: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/960.jpg)
termsoftheirmortgagestoavoidforeclosure”.’AsofMay[2012],4.3millionpeoplehadappliedforaid,butonlyonemillionhadreceivedgovernment-sponsoredmodifications,accordingtothemostrecentdata.Aboutathirdofthoseturnedawaylosttheirhomes,werefacingforeclosureorhadfiledforbankruptcy.24Allthis,however,wasmuchmorethanthecoalitiongovernmentintheUKwaspreparedtodo,andmorethanLabourhasyetpromisedtodo.Labourpromisestoboostnew
housingstartnumbers(buildinghomes)from100,000to200,000ayear,butnottoprotectfamiliesfromfutureforeclosure.ThefirstseriousassessmentofLabour’sMortgageRescueScheme(itsexperimental
![Page 961: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/961.jpg)
‘right-to-stay’policy)foundthat2,600householdshadbeenhelpedtoavoidrepossessionandhomelessness,butatacostofinexcessof£240million.Theoriginalplanhadbeentohelp6,000householdsforonly£205million.AstheheadoftheNationalAuditOfficeputit,inMay2011,whencommentingontheDepartmentforCommunitiesandLocalGovernment’soverallrecord:‘TheDepartmentmadeassumptionsaboutthelevelofdemandfortheMortgageRescueSchemeandmadethewrongcall.Therewasmoreneedthanexpectedformoreexpensivesupportandlessfortherelativelylowcostrescueoption.’25TheNationalAuditOfficesaidthatasaresulttheschemewasbadvalueformoney.
![Page 962: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/962.jpg)
Whattheydidn’tpointoutisthatifthebankshadbeengivenlesscompensation,itcouldhavebeenverygoodvalueformoneyindeed.Thecoalitiongovernmentmade
cutstotheMortgageRescueSchemeandscrappedotherschemesonceitcametooffice.Theschemehadpreventedanevengreaterriseinhomelessness,anditsimplementationalsomeantthatmanyhouseholdsthatdidnotintheendtakeitupinsteadgotgoodadvice;26butby2012itwasclearthatdemandfor‘mortgagerescue’wasnotgrowing.Withinterestratesfallingtosometimesaslowas2%,fewerhouseholdsweregettingintotroublewiththeirmortgagepayments.Butsuchlowinterestratesmeantthatthesellingpriceof
![Page 963: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/963.jpg)
housinginmanyareashadnotfallenfurther.Sonownewlyforminghouseholdsareunabletobuy,andthereisacontinuedslowingofthemarketandagrowingfearoftheinevitableeventualimpactoffutureinterestraterises.Thesoleconcessiontothe
conundrumwearenowin,andthecentrepieceofthegovernment’sMarch2013budget,whichhasbeendiscussedalreadyindetailmuchearlierinthisbook,wastotrytoshoreupthehousingmarket.Thatshoringuphas,amongotherthings,madeitcheapertobuysecondhomes,with£12billionpledgedfortheunderwritingofalargepartofmany,ifnotmost,newmortgagesforsevenyears.27Allthisdoesistomaintainhighhousingprices,thus
![Page 964: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/964.jpg)
preventingnewmortgagorsfrombuyingstarterhomesfromhouseholdsthathavegrownlargerandthatneedtomoveupandout.Themostexpensiveschemesstartin2014.ManycommentatorsbelievethattherealaimistodelayanycrashuntilaftertheGeneralElection,scheduledforspring2015.Amoreradicaloppositionparty
wouldadvocatechangingpolicytoshowwhatwouldstillbepossiblewhenthemoneyrunsout.Ashasbeensaidearlier,manyemptypropertiescanbebroughtbackintouse.Squattersdothis,andcriminalizingthemiscounterproductive.Compulsorypurchaseofpersistentlyemptypropertiesmaywellbeneeded,asEdMilibandnowadmits,butitwill
![Page 965: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/965.jpg)
actuallyhavetobecarriedoutoftenenoughforattitudestochange,notjustthreatened.Weknowthisbecause,asmentionedinthechaptersabove,NewLabourputalawonthebooksthatallowedabuildingtobepurchasedafterithadstoodvacantforsixmonths,butonlywhenthiscouldbejustifiedandtherewasnoalternative.Thatlawwashardlyusedatall.Asaresultoftheunderuse,whenthecoalitiongovernmentmadethelawlesseffectiveinNovember2012–byextendingtheperiodanyresidentialbuildingcanlieempty,withnoactionevenbeingproposed,totwoyears–hardlyanyonenoticed.28
Theywereactingintheinterestsoflandlordsandmultiple-propertyownersinlengtheningtheperiodto
![Page 966: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/966.jpg)
twoyears,butfewpeopleknew,becauseNewLabour,throughoutitsthirteenyearsinpower,hadneitherexplainedhowvaluabletheoldlawcouldbenorhaditutilizeditspotential.Foranypropertythathasbeen
emptyfortwoyears,anEmptyBuildingManagementOrdercanbemade.Peoplebeinghomelessorshockinglyhousednearbyareadequatejustifications.However,althoughitwouldbegoodtogetthetimeperiodbackdowntosixmonthsbeforeactioncanbetaken,itisnotthelegalitythatisreallystallingprogresstowardsconvertingmoreemptybuildingsintohomes;insteaditisalackofpoliticalwill.Thethreatofcompulsorypurchase,enactedenoughtimestobebelieved,
![Page 967: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/967.jpg)
wouldbeahuge‘incentive’fortheownersofemptypropertynottoleavethatpropertyempty.Convertingemptybuildingsintoresidentialpropertyduringacommercialpropertymarketslumpisacheapsolution.Itcanbemadeevencheaperifafuturegovernmentdeclaresthattheamountofcompensationproperty-ownerswillreceivewillbebasedonitsvaluewhenitwasvacated,withafurtherreductiondependingonhowlongithadremainedunoccupied.Manycommercialpropertiesare
empty:officeblocksnotbeingused,workshopsmothballed,andshopsboardedup.Conversiontoresidentialdwellingscouldrenewthehighstreetsthattheout-of-townsuperstoresandtheinternethave
![Page 968: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/968.jpg)
decimated.Itwouldnotbeeasy–eachresidentialpropertyneedsitsownfrontdoor,notadoorintoashop–butitispossible.Complaintsarealwaysmadeaboutchangeandsomepeoplewouldloseout.Thecomplaintswouldcomefromeverysector,andsomewouldbeunexpected.Forexample,artistswillcomplainthattheycannotfindcheapcommercialpropertytorentasstudios,placesinwhichtocreatetheirart.Afewalreadydowhenhousingschemeslikethisareproposed.Butshelterismoreimportantthanstudios.Amoreutopicvisionofthefuture
wouldseeusmakespaceforbothstudiosandhomes,forbothworkspacesandroomsforrecreation.Muchlandfromthecontinueddecay
![Page 969: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/969.jpg)
ofoldindustryremainstobefreedupacrosstherichworld.Moreandmorebrownfieldsitesarebecomingavailable.InBritaintheyaremostlyinthenorth,wherethehill-walkingisbetterandtheaircleanertoo.Moreandmorejobsaredonefromhome,ontheinternet,orattheveryleastdonotrequireamileandahalfofflatland,suchasusedtoberequiredbyasteelmill.Asourworkrequireseachofus,onaverage,tohavelessspacetoworkin,morespaceisfreeduptohouseusall.Sowhydoesnoneofthishappen?Whyarewebecomingmoreandmorecrammedintothesouth-eastofEngland?WhyarethenewRachmanlandlordsnotdemonized?Whycanwenotfixhousingaswefixeditbefore?Isitbecauseweneedcollectiveaction,
![Page 970: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/970.jpg)
buthavelostthewilltoactcollectivelyduringrecentdecades,decadesinwhichindividual‘aspiration’hastriumphed?Localvoluntarymodelswork
painfullyslowly,iftheyworkatall.TheEastLondonCommunityLandTrust,thefirstofitskindintheUKtotrytobuildhomesforlocalpeople,runbylocalpeople,isstillstumblingalongyearsafteritsinceptionin2007;itslatestnews(inFebruary2013)isamessagefromtheyearbefore,saying‘Youarecordiallyinvitedtoourcommunity-leddesignweekendtohelpdesignandbuildtheUK’sfirst-everurbanCommunityLandTrust!’29
Actinglocallyonhousingonlygetsyousofar,anditdoesnotgetyouthereveryfast.Itwasacting
![Page 971: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/971.jpg)
collectivelynationallythatachievedrentcontrolinthepast.ThatbeganwiththeRentRestrictionActof1915andtheHousing(HomelessPersons)Actof1977,justpartofalonglistthatcanbedrawnuptoshowthathousinginthepastwasimprovedmostlythroughcollectiveaction.30Actsofparliamenttorestoreandimproveoldrights,tochangethelawontenure,oncapitalgainsandoncounciltax,areonewayforward,butanewagerequiresmorethanjustnewlaws;itrequiresadifferentkindofthinking.Peopleneedtostopthinkingof
decenthousingassomethingonlyafewdeserve,andrealizethatitissomethingweallneed.Inalmostallrichcountrieswehaveneverhadasmuchhousingavailableaswehave
![Page 972: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/972.jpg)
now.Neverhasourfinancialmodelforallocatingthathousingbeenmoreobviouslywantingthanitisnow.
![Page 973: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/973.jpg)
![Page 974: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/974.jpg)
PostfortenantspastandpresentisleftinthehallwayofaGeorgianhouse,nowdividedintosixflats,inNetherEdge,Sheffield.Someonehasbeenstackingtheposteversoneatly.Someonecaresabouthowtheentrancetotheirhomelooksandiswillingtospendthetimeneededtokeepittidy.Theymightdoitbecausetheybegrudgetheirneighbours’tardyattitudetodealingwiththeirbills,buttheyknowthatiftheydidnotact,nooneelsewouldtidyup.Itiseasiertoactinacollectivewaywhenyoucanseetheimmediateimpactofyouractions,andittakesonlyafew
peopletoactcollectivelyforeveryone’senvironmenttobeimproved.Thealternativetocollectiveactionisamess.Inthiscasethepostwouldallbeinapile,andeachtenantwould
havetosortthroughthatpile,makingitmoreofamess.Theywouldhavetodothiswhenevertheywantedtoseeiftheyhadreceivedaletter.Wearepainfullyawareofourpersonalinfluenceon
others(andwhattheythinkofus)whenweworryaboutnotbargingaheadinaqueue,ornottakingmorethanourfairamountofspaceonthebusortrain,notputtingluggageonaseatwhenpeoplearestanding.Butwhenactionsarelessvisible–ifpeopledon’tknowthatyouareresponsibleforthatemptyhomeorshop,ortheybelieveyouwhenyousaythatyoucannotaffordtosellata
![Page 975: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/975.jpg)
lowerprice–oncewhatyouaredoingbecomeslessobvious,itiseasiertobeselfish.
CONCLUSIONS
Thestagnationofthelivingstandardsofthemajorityisnotatallunrelatedtothesuccessatthetop;ineffect,thoseattheverytopareplunderingthepoorandthemiddleclasses…themarketisatriskbecauseextremedifferencesofpowermakeamockeryofthevoluntarynatureofmarkettransactions.Thepoliticalsystemisatriskbecauseplutocracygraduallyreplacesdemocracy.
–fromareviewofJosephStiglitz’sworkby
AngusDeaton,201331
Inhousing,volatilityincreasesasinequalityincreases.WhenthedistinguishedeconomistAngusDeatonspokeofthestagnationoflivingstandardsthatmostcitizensoftheUShavebeenexperiencingfor
![Page 976: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/976.jpg)
nighonageneration,hewasdescribinghowwhatwasonceasolidcertainty–thatmostpeopleintheworld’srichestcountrywoulddowellandbehousedadequatelythroughouttheirlifetime–hasmeltedintothinairfollowingthe2008crash.Growinginequalityhasinducedevengreatervolatilityandcausedthemarkettofail.Volatilityisultimatelythereason
whyeventhosenotbotheredbytheideaofincreasinginequalityshouldbebothered.Youmaythinkyouaredoingfine–youownahomeanditisworthalot–butitsvalueisbeingproppedupbyagovernmentdesperateforyourvote,agovernmentthatappointsmemberstoitsnationalbank’sadvisoryboardwhowillensurethatinterestratesare
![Page 977: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/977.jpg)
keptathistoricallyunprecedentedlows.Lowinterestratescannotlastforever.Iffastmoneycanfindsomewherebettertogointheglobe,itwillgothere,andthequantitativeeasingthatmakessuchlowratespossiblecannotlastforever.Everythingdependsonconfidenceinthemarket–sothemorevolatilethemarket,thesooneritwillcrash.Aboringmarket,withfewer
second-andthird-homebuyers,becomesasafer,slowermarket.Arentalmarketwhererentsarebothlowerandlessvariable,becausetenantshavemoresimilarincomes,leadstoimprovedconditionsoftenureinplaceofafewbetter-offtenantsrentingswankyapartments.Wheninequalityrises,mostpeoplebecomeevermoredismayedbywhat
![Page 978: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/978.jpg)
theyaregettingfortheirmoney.Discontentbecomesrife.JosephStiglitzhasfoundthat,intheUS,plutocracyisalreadyreplacingdemocracy.Aplutocracyisasocietybothruledanddominatedbyatinyminorityofitswealthiestcitizens.AndweareindangerofplutocracyspreadingtoEurope.By2013itwasrevealedthatupto
athirdofallcouncilhomesthathadbeenpurchasedunderthe‘right-to-buy’hadbeensoldontojustafewrichlandlords.Take,forinstance,IanGow,whowastheministerwhopresidedovertheintroductionofThatcher’s‘right-to-buy’scheme.Hissonisnowahousingtycoon,owningmorethanfortyex-councilflatsinoneLondonestatealone.Asonecommentatorremarked,‘You
![Page 979: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/979.jpg)
couldn’tmakeitup.ThefamilyofoneoftheToryministerswhooversaw“right-to-buy”endsupowningswathesofex-councilhomes.’32IfAmericanplutocracyspreadstoEurope,itwillenterthroughtheUKfirst.Buttherearemanysignstosuggestthatthiswillnothappen.Astheyoftendo,eventsmaybe
movingfasterthanpolicy.InIrelandanewtaxisbeingintroducedonproperty,onethatincreasesinlinewiththevalueofthatproperty.Whilenotstrictlyalandvaluetax,itseffectmaywellbesimilarintermsofactingasabrakeonfuturerisinghousingprices.Unsurprisingly,themostvocaloppositiontothetaxhasbeenfromthewealthyresidentsofthosepartsofDublinwhereprices
![Page 980: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/980.jpg)
remainhighest.Ofcourse,therearemanyslightlylessaffluentareasinDublintherichcouldmovetoiftheywishedtoreducetheirtaxliability,andahugenumberofemptypropertiesfromwhichtochoose.Itisnotthethreatofbeingunabletoaffordahomethatworriesthem;itisthepossibilitythattheymaynotbeabletokeepalltheirwealthinalandwheresomanyhavelostallthattheyhad.Greatinequalityengendersagreatfearofsharing.ThenewIrishpropertytaxhas
embarrassedtheUKTreasury,whichclaimedthatimposingasimilartaxinBritainwouldbetoocostly.Alandregistrywouldbenecessarytoadministeranypropertytax,andtheUKalreadypossessesamostlycompleteone.Irelanddoesnothave
![Page 981: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/981.jpg)
oneatall,andyet‘theIrishrevenuecommissionersputthecostofsettingupthesystemat€25.9millionfor2013withanadditionalinitialIToutlayof€9million,themajorityofwhichwillbeattributedtothedevelopmentofthepropertyregister.’33Thisismuchlessthan3%ofallthemoneythat,itispredicted,thetaxwillraise.IftheBritishcouldmatchtheIrish,giventhatmuchoftheworkofregisteringpropertyhasalreadybeencompleted,thecostofadministeringanewlandvaluetaxcouldbelessthan1%ofallmoniesraised.Itisnotasifthereisnoprecedentforsuchatax:theUShasone.Iftheycanmakeitworkthere,wecanmakeitworkhere.IncertainUSstates,varioussmalllandvaluetaxesalreadyexist.Whenaland
![Page 982: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/982.jpg)
valuetaxisinplace,itbecomesfinanciallyfarlessprofitabletositonunusedlandandhomes.Indeed,ithasoftenbeenclaimedthatoneofthequickestwaystoimproveacountry’sinfrastructureortogeneratejobsistointroducesuchatax.TheUSlandvaluetaxiswidelycreditedwithhavingcuredthe1930sslump.34Alandvaluetaxisintheinterestsofthevastmajority,butthewealthydon’tviewallpeopleasequal.InBritainthejournalistKevin
Cahillcalculatedthat,in2002,69%ofthelandwasinthehandsof0.6%ofthepopulation.Governmentstatisticsshowthatsincethentheconcentrationhasintensified.Between2005and2011thenumberoflandholdingsinEnglandhad
![Page 983: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/983.jpg)
fallenby10%,whiletheaveragesizeofholdingshadrisenby12%.ThiscouldbeoneofthefastestconsolidationsofownershipsincetheHighlandClearances.35TheBritishhaveenoughlandandhousing;itisjustthatincreasinglymostofitisownedbyasmallerandsmallerelite.Acrisisisinevitableiftherichest
1%areallowedtocontinuetoobtainanever-greatershareofthenationalwealth.Therichhavetoholdthatshareinoneformofinvestmentoranother.Itcouldbeinshares,oringold,butitneednotbeinland.Thefundamentalproblemwiththerichistheirwealthandtheconsequenteffectsoftheirownershipofsuchagreatshareofthethingsweallneed.
![Page 984: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/984.jpg)
Butbettertoletthemhoardgoldthanlandandphysicalproperty.Weneedtorememberthathousing
isaspecialkindofgood–asocialgood–whichbringswithitwiderbenefits.Inthisitislikeeducationandhealth.Itisbetterforallofusifothersarealsowellhoused,welleducatedandhealthy.Thesimilaritiesdonotendthere.Housingisalsonotsomethingthatyoutendtobearepeatconsumerof,notifthingsgowell.Completelyfreemarketsworkwellonlywithgoodsthatyoubuyoften,sothatyoucanlearnfromyourpurchasingmistakes.Peopledonotwanttomovehomemanytimesintheirlives,buttheycanfeeltheyhavenoalternative.Thisvolatileenvironmentispreciselywhatthe
![Page 985: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/985.jpg)
housingmarketofthepastfewdecadeshasencouraged.Youcannotbeawell-informed
consumerofhousingunlessyouarealandlordorotherhousingagent.Theunfetteredmarketdoesnotworkwellinallocatinghousing,becauselevelsofknowledgearesounevenlydistributedandthereisnosanewayofbalancingoutsuchknowledge–notunlessyouwanteveryonetobecomelikeanestateagentintheirunderstandingofhousingmarkets.Youmightuseasearchenginetoshowyouallthepropertyavailableinyourareatorentortobuy,butdoyouknowhowoftensales,onceagreed,fallthrough?Whatistheaveragerentinsomestreets?Isitnormaltobeaskedtoputdownsixmonthsofrentasadeposit?And
![Page 986: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/986.jpg)
whyisthemortgagebrokersokeenforyoutotakeoutoneparticularproduct–doesshegetakick-back?Housingisbecomingharderandhardertosecureandtounderstand.Whatisclearisthatthehousing
marketwillnotbemademoreequitablethroughvoluntaryactiononthepartofthemostinterestedparties.Weneedtohelptherichtolearntocontrolthemselves.Asafirststepweshouldattheveryleastbeenactingpoliciessuchasthatsuggestedin2012byresearchersfromtheInstituteforPublicPolicyResearch:levyingalandvaluetaxon,ataminimum,allcurrentlyundevelopeddevelopablelandthatisworthabove£2millioninvalue.Thiswouldswiftlyencouragenewbuildingandraisefundsforthe
![Page 987: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/987.jpg)
governmentforhousinginvestment.36
Alandvaluetaxisevolution,notrevolution.Itisnowbeingproposedbysomeofthemostseriousofcommentators.ItisbeingintroducedinplaceslikeIrelandwiththeblessingofnot-too-radicalinternationaleconomists.TheexistingUKcounciltaxisaverycrudeandinefficientformofit.Manyhavecalledforabetterlandvaluetax,butonlyaworseningofthecurrenthousingcrisisislikelytowakenupthewiderpublictotheneedforit.Taxationmaybejustapartofany
solution,butitisfundamentallynecessaryfortworeasons.First,itcandiscourageexcessivelandandpropertyholdingbyaveryfew.
![Page 988: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/988.jpg)
Secondly,inraisingfundsfromthosewhohavethemosttogive,ithelpstohousethosewhomostneedhelp.Wealthisredistributed.Amongrichnations,wealth
inequalitiesarelowestinJapan,Spain,Italy,FinlandandAustralia.NextcomeNewZealandandtheNetherlands,thenPortugal,GermanyandCanada.OnlyafterthesetencountriesarepassedoverdowegettotheUK(moreunequalinwealththanallofthem).TherearethreelargerichcountriesthathavegreaterwealthinequalitythantheUK:France,DenmarkandtheUS.Theorderofcountrieschangesifincomeinequalitiesareusedtoranktheminsteadofwealthinequalities.Goingbyincome,bothFranceandDenmarkaremuchmoreequitable
![Page 989: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/989.jpg)
placestoliveinthantheUK.PartofthereasonwhyFranceandDenmarkhavesuchanunevendistributionofwealthisbecauseoftheiropennesstopoorerimmigrantswhoarrivewithsoverylittle;this,andthelegacyofslavery,accountsforwealthinequalitiesintheUS.Thesonsanddaughtersofslavesinheritnowealth,whichdisadvantagesgenerationsoftheirdescendants.InbothFranceandDenmark
inequalitiesinincomearelowerthanaverageforOECDstates,despitehigherwealthinequalities.Theacademicpaperthatfirstreportedthesestatisticsalsoshowedfarhighercorrelationsbetweenwealthinequalityandprematuremortalitythanbetweenincomeinequalityandpoorhealth.37Whereincome
![Page 990: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/990.jpg)
inequalitiesarecurrentlyhighest,wealthinequalitieswillgrowmostinfuture.Whereincomeinequalitiesarelowest,wealthinequalitiesmayalreadybefalling.Iwouldadvocategradually
reformingcounciltaxinto‘anationallandandpropertyvaluetax’;alsoextendingmortgagecontrolstopreventlendinggettingoutofhand;andintroducingamoreeffectivesafety-netformortgagors–that‘right-to-sell’andbecomeatenant,shouldyoufindyouareunabletopaythemortgage.Thealreadyestablished‘right-to-stay’laws,whicharecurrentlyusedverylittleandthenonlythroughtherecentlymuchmutedMortgageRescueScheme,couldbeenhancedintoa
![Page 991: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/991.jpg)
‘right-to-sell’thatcouldactuallymakeadifference.38
Mortgagecontrolsmaysoundscaryandimplygreatlevelsofstateintervention,butgreatstateinterventioniscurrentlyrequiredtosustain,promoteandexpandtheuncontrolledmortgagemarketintheUK.Simplypullingbackonthebankguaranteeswouldhelptocreateamorecontrolledmarket.IntheUSthesimilarloan-aidprogrammehasbeenfoundtohaveaidedbanksfarmorethanhome-buyers,tothetuneof$12billionby2012,withthemoneymostlygoingtoJ.P.MorganandWellsFargo;39ittoocouldbefruitfullycurtailed.TheUK’sown£12billionguaranteewentaheadearlyinOctober2013;and,intheend,ifthemarketweretofalland
![Page 992: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/992.jpg)
theguaranteeshadtobedrawnon,themoneywouldalsogomostlytoacoupleofthebigbanks,whilethemortgagorswhocouldnotkeepuptheirpaymentswouldbeleftindirestraits.Ifthemarketdoesn’tfall,thebankswinanyway.ItisgrosslyirresponsibleoftheUKgovernmenttogifta‘win-win’situationtothebanks.Althoughthe‘help-to-buy’
schemehasbeendescribedastheequivalentofarichdadgivinghischildrenmoneytohelpwiththeirdeposit,itisnot.Noonegivesthemortgagoranymoney;insteadtheyhavetotakeoutabiggermortgage.Theschemeisbettercharacterizedasarichdad,thegovernment,goingtothebankmanagerandgivinghimorherafinancialinducementto
![Page 993: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/993.jpg)
approveamortgagethatthebankmanagerconsideredrisky,theriskbeingthelikelihoodofthemortgagorgettingintoarrears.Thereis,however,anotherriskthatdoesnotimmediatelyaffectthebank.TheChancellor,GeorgeOsborne,thinkstheschemecouldsupportupto£130billionofnewmortgages,withgovernmentliabilityexpectedtobenomorethan£12billion.Ifthishappens,excessivehousepriceinflationisinevitable,makingthesituationworseforfuturebuyersandcreatingamarketatevergreaterriskofcrashing.Ifinterestratesweretoincrease,
propertyvalueswouldfallbuttherewouldbelarge-scaledefaultingonmortgagepayments.Therewouldalsobetherentincreasesimposedby
![Page 994: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/994.jpg)
landlordstocovertheirownincreasedmortgagepayments.Consequentlyawaywouldhavetobefoundtoavoidmassevictionsandtheaccompanyingmiseryandderelictionofpoorerareas,whichwouldbehardesthit.Butnosolutioncomesforfree.Monieswillneedtoberaised.Iftheprivatesectoristobedeterredfrominstigatinganyfurtherincreaseinevictions,the‘right-to-stay’willneedtobefunded.Themostsecurewaytoraisemoneyisbytaxingthepropertyandthelandofthosewithmorethantheyneed–wealthwhichofcoursecannotbemovedorhiddenawayinoffshorelocations.Oneofthemostfavouredestate
agentsoftheveryrichestinvestorshasalreadytriedtopourcoldwater
![Page 995: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/995.jpg)
ontheideaofintroducinghighlandtaxes,includingthemansiontaxnowproposedbybothLabourandtheLiberalDemocrats.InLabour’sversionanannuallevyof1%wouldbeplacedonhomesworthover£2million,raising£2billionayear.TheestateagentSavillssaiditwouldraiseonlyhalfthatamount,butithasagreatvestedinterestintryingtopreventtheimpositionoflandtaxes.Housingdevelopersaresimilarlyopposedtotheseproposedinterventions,but,asEdMilibandpointedoutinDecember2013,thefourlargestsawtheirprofitssoarby557%bytheendofthatyear.40
Manyarebeginningtotireoftherichtellingthemthatthereisnoalternative.41
![Page 996: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/996.jpg)
ThisbookhasbeenconcernedwithwhyitisthattheactivityanddignityandfreedomofmillionsofpeopleinBritain,andhundredsofmillionsofpeoplearoundtheworld,areatstakebecausetheycannotgetsecureaccesstodecenthousing.42
Or,toputitmoreasapoliticianmight,thesearepeoplewhoarenotfreetobewhotheycouldbe,todowhattheycoulddo,toholduptheirheadsandlivewithoutfearofdebt,tolivewhereitwouldbereasonabletolive.Thesepeoplecouldbeyou.Theyarethemajority.Ineconomicallyunequalcountriesitisnotthatpoorerorjustaveragepeopledonotworkhardenoughortrytosaveenough;itisthatwehaveallowedafewtobecometoorich,withtheresultthatmostofusfindit
![Page 997: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/997.jpg)
veryhardtofindsuitableplacestoliveinatall.Becauseofactionsbytherich–suchasbuyingpropertyforinvestmentpurposesandturning1970sflatsbackintogiant1920s-styletownhouses–housingbecomesmoreandmoreofastruggleforeachsuccessivegenerationintheUK.Incountriessuchasthe
NetherlandsandDenmarkhousingisfarbetterallocated,andthisallocationisgettingbetterovertime.ThesecountriesarenotdissimilartotheUK,yet,asthenumerousexamplesgiveninthepagesabovehaveshown,inmuchofmainlandEuropehousingisbettersharedout.Thisisnotjustbecausethesearemoreequitablesocieties.DenmarkevenhasamoreunevendistributionofwealththantheUK,asdiscussed
![Page 998: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/998.jpg)
above,butrespectively15%and10%ofthehouseholdsinthesetwocountriesreceivestatebenefitstowardstheirrent,incomparisonwith18%intheUK,whichisstillaproportionfargreaterthanthatinmostOECDcountries.43BothcountriescontrolrentsfarbetterthantheUKdoes,aswellasdampeningdownhouseprices.44AsaresultpeoplearefarfreertochoosewheretheyliveintheNetherlandsandDenmark–nearertheirplacesofwork,forexample.Thewayweorganizeourhousing
influencesmanyotheraspectsofourlives,includingourpreferredwayofgettingtoworkandhencehowfarfromworkwelive.CyclingwasmentionedinChapter6ofthisbook(p.221).IntheUKonly2%ofall
![Page 999: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/999.jpg)
journeysareundertakenonabike.Thiscompareswith27%intheNetherlandsand18%inDenmark.InanincreasingnumberofEuropeantownsmorethan50%ofalljourneysaremadebybike.45Togetadultsandchildrencycling,youneedpeopletobeabletolivenearenoughtowheretheyworktobeabletogiveupthecar.Youneedsensiblehousingpoliciesforthat.InJapan,carusehasbeenfallingforovertwodecades,andthisisnotunrelatedtothefactthathousingisfarmoremixedtherethanitisinBritain:46
smallerpropertiesarebuiltnexttolargerones,anditisnormal(evenifofficiallystillillegal)tocycleslowlyonpavements.Therearealsoveryfewverypoororveryrichenclaves.Peoplecanlivenearertheirwork.
![Page 1000: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1000.jpg)
Publictransportandotherpublicpoliciesaremoreeasilyimprovedwhenhousingpolicyisimproved.Bycontrast,themoreindividualististhehousingpolicythatacountryadopts,themoreindividualistitstransportbecomes.Allowurbansprawlandanincreasinglyinefficient‘free’marketbeginstodominate,whichforcesmanypeopletolivealongwayfromwheretheyareemployed.Moreandmorepeoplewillcometorelyoncarstogetthemtoalmostanydestination–toschool,tothelocalshops,andnotjusttowork.Andthemorepeoplerelyoncars,themoresegregatedeachresidentialneighbourhoodbecomes.Makerentingattractiveandaffordable,dampentheexpectationofspeculativegainsonbuyingproperty,
![Page 1001: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1001.jpg)
andpoorerareasriseinattractiveness,whileplacesthatweremainlypopularbecausetheywereexpensivebecomebothlesspopularandlessexpensive.Leftalone,themarketfailstomovetowardssuchequilibrium.Housingshowshowmarketscan
fail–andafailureinthisareamattersmorethaninalmostanyotherareaofourlives.Thatisbecauseweneedhousingeveryday,allofus,allthetime.Andweappeartobeforgettingthat.Forinstance,justoverfiftyyearsago,themajorproblemsfacinghousinginBritaininthePenguinSpecialonthesubject(releasedin1962)includedensuringkitchenswerebuiltwith‘roominthemforpeopletositdowntomealscomfortably’.47Housingissuesback
![Page 1002: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1002.jpg)
thenwerebeingaddressedmoreefficientlyandpractically;weweremovingintherightdirection.Thequestionswereaboutwhattoimprovenext.Wewerenotpreoccupiedbyoldproblemsthatwerebecomingmuchworse.Howhousingissueshavechanged
frombeingsopracticalandinclusiveintheiraimstobeingsodivisivecanbehardtograsp.Butifyoubelievethattheremustbeabetterway,thegoodnewsisthatyouarenotalone.ThelargestcontinuousInternationalSocialSurveyProgrammeundertakenworldwidehasfoundthatmostadultsinrichcountriesdothinkthatpeopleshouldbedecentlyhousedandthattheirgovernmentshaveadutytoensuresuchasituation.FortheBritish,thereisa
![Page 1003: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1003.jpg)
particularreasonwhyhopeiswarranted.Pastadvocacyforbetterhousinghasleftalastingmarkonourcollectiveconscious,asrevealedbyouranswersinthoseinternationalsurveys.Becauseofthis,futurecampaigningstartsfromahigherthreshold.Incomparisonwithsixteenotheraffluentdemocraciesforwhichthereisdata–Australia,Canada,Denmark,Finland,France,Germany,Ireland,Japan,theNetherlands,NewZealand,Norway,Portugal,Spain,Sweden,SwitzerlandandtheUS–in2012theBritishwere‘significantlymorelikelytobelievethegovernmenthasaresponsibilityto“providedecenthousingforthosewhocan’taffordit”…Morethan85%ofBritishrespondentssupportedthe
![Page 1004: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1004.jpg)
government’sresponsibilityforhousing.’48Thisisincomparisonwith‘only’77%ofadultsintheUSwhobelievegovernmentshouldbeinvolvedinhousing.Buteventherelessthanaquarterofthepopulationbelievethathowwearehousedisnobody’sbusinessbuttheindividual’s.Overthreequartersbelievegovernment–allofusactingcollectively–isresponsible.Thatargumentisalreadywon.Thenextargumentiswhatgovernmentmustdo,aswecometorealizethatwhatwehavebeendoingfordecadesnolongerworks.Recently,aformerUScabinet
secretaryaskedhismentorfromcollege,whohadbeenborninthe1930s,49whathopetheremightbeofmostAmericanscomingtoseethat
![Page 1005: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1005.jpg)
theyweregoingdownthewrongpath;theoldermananswered:‘Yes,andthey’restartingtounderstandthat…Andbeginningtoseethatthedistinctionbetweenthemiddleclassandpoorisdisappearing.Manywhowereinthemiddlehavefallenintopoverty;manymorewilldoso.’50
Hewentontoexplainthat,fordecades,thoseatthetophadtriedtoconvincethemiddleclassthattheireconomicenemieswereethnicminoritiesandthepoor.Butnowthatolddivide-and-conquerstrategyisstartingtofail.Andasitfails,hesuggested,itwillbepossibletocreateapowerfulpoliticalcoalitionofthepoorandthemiddleclasses.SoonAmericawillbeamajorityofminorities.Womenaregainingmoreandmoreeconomicpower.Hecould
![Page 1006: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1006.jpg)
seealotofreasonsforhope.ButhewasoldenoughtorememberthelasttimeUSsocietywasmademoreequitable.Theformercabinetsecretary
counteredthatthe400richestAmericansarenowwealthierthanthebottom150millionAmericansputtogetherandthattheyhavemorepoliticalinfluencethanever.Theoldermanreplied:‘Justyouwait.’Wehavealreadybuiltenough
homes.Wehavemorebedroomsthanwehaveeverhadbefore.Butafewhavebeentakingfarmorethantheirfairshare,increasinglysoeversince1980;andveryrecentlytheyhavebeentakingfarmoreagainwitheachyearthathaspassedsincethecrash.Manyattheverytopofsocietyhavebeenharmingtherest:
![Page 1007: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1007.jpg)
inevictingthepoorestfromtheirhomes,inpenalizingpeoplefarmorecrampedthantheyareforhavingaspareroom,inimpoverishingthemiddleearnersthroughhighrentandmortgages,indamagingthechancesofthoseinthetoptenth(butnotthetop1%ofsociety)byenticingthemtoborrowmore.ThevestedinterestsinBritishhousingarecurrentlystokinguptheembersofthelastcrashtocreateanewcrisis.Butacrisisisasgoodatimeasanytogetourhouseinorder.Whatwearecurrentlyseeingis
notaconflictbetweenoldandyoung,butanewrealanddangeroushistoricaltrend.Awholegenerationhasnowgrownupinaneconomybasedonmonopolisticmarketsandthemyththatthesearesomehowfree
![Page 1008: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1008.jpg)
markets.Thecutsand,formost,arecessionwithoutanendinsightdrivespeopleapartastheystrugglenottobeleftbehind.Inthesecircumstanceseveryone–richandpoor–isafflictedwithcontagiousinsecurity,mistrustandagrowingfearofthefuture.Itmatterswhoprovidesgoodsor
services,andunderwhatconditions.Itisnogoodsayingthatitdoesn’taslongascustomersaresatisfied.Itiswrongtoassumethattaxisapenaltyratherthanasubscriptiontosociety.Wearecurrentlyinaviciouscyclewherethelesssolidarityyouhave,thelessyouwant.Buthumanscontainwithinthemaninnatedesireforlarge-groupcohesion.It’swhywechantincrowdsandfeelhappyatfestivals.Wedevelopedtheimpulse
![Page 1009: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1009.jpg)
alongtimeagoinordertosurvive.Allthemodernthreatswefacecould,ifdescribedaccuratelyandaddressedcarefully,driveustorediscoverthisdesiretoworkbettertogether.Ifthethreattoourhousingandourchildren’schancesofbeingwellhousedisrealizedasoptional,ratherthaninevitable,thenthereishope.51
Manysuggestionshavebeenmadeinthechaptersofthisbookaboutwhatpoliciescouldbedonebetter.Toend,Itaketenoftheseandlistthem,notinanyparticularorder.Thereisnothingexhaustiveaboutthelistthatfollows,butanysinglepolicyonitsown,unlessintroducedinanerawhenattitudesarechanging,isunlikelytohaveagreateffect.Ourhousingwillbemade
![Page 1010: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1010.jpg)
moresolidthroughaconjunctionofnewpolicies,notthroughanysingleone.Butweneedlistsofoptionstothinkabout.Sohereismine:
1. Extendthecurrentcounciltaxbandsuptoband‘Z’withaviewtotransformingthetaxintoafairernationallandandpropertytax.
2. Enhancetheexisting‘right-to-stay’intoa‘right-to-sell’,givingmortgagorstherighttobecometenantsratherthanfaceeviction.
3. Secondhomes,holidayhomesandemptycommercialpropertyneedtobeincludedinafairerpropertytaxsystemtodiscouragewaste.
4. Sparebedroomsshouldnotbetaxed.Everyfamilyshouldbeabletoliveinahomewithaspareroomforvisitors.Wealreadyhaveenoughrooms.Everysingleadultwhowantstheirownspaceshouldhaveit.
5. Anenhancedhome-buildingprogrammewillbeneededifmorepeoplecomeintotheUKthanleave,ashasbeenthecaseinrecentyears.
![Page 1011: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1011.jpg)
6. Benefitsarenowsolowthattheymustsoonrisefasterthanwages,whichmustrisefasterthansalaries–allofwhichmustrisefasterthanhomeprices.Rentsneedtostaystill,ifnotfall.Alltheseareoutofbalance.
7. Greaterincomeandwealthequalitywouldbeimprovedbythereintroductionofrentcontrols,whichwouldalsoreducehousingbenefitbillsmassively.ThealreadycalculatedLocalHousingAllowancescouldbeusedtosetthemaximumfairrentinanarea.
8. Squattingandallotheractsthataredonepurelytoseekshelterandnottostealitemsforprofitshouldagainbeacivil,notacriminal,offence.Squattingisasymptomofaproblem,nottheproblem.
9. Illegalactionsbylandlordsandbankersthatdeprivepeopleoftheirhomeandsheltershouldbecomecriminal,ratherthancivil,offences.
10. Wehavetorecognizethathousingiscentraltoenvironmentalsustainability.Whenwebuild,weneedtobuildfortheverylongterm.
![Page 1012: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1012.jpg)
Ofallofthesesuggestionsthefirstandlastmaybethemostimportant.RecentlythemildlyconservativeInstituteforFiscalStudiescameoutinfavourofbetterlandvaluetaxationwhenitconcludedthatcurrenttaxationoflandandpropertyisinefficientandinequitable.52Therichwillnothoardlandandbuildingsiftheyaretaxedheavilyfordoingso.But,asthetaxesaresetasaproportionofcurrentvalue,andastheirintroductionwillreducethatvalue,theymightwellfallovertime,becausethelandvaluesthemselveswillfallduetothetax.Suchataxwouldprobablybeintroducedgradually,butevenknowingthatmorewastocomewouldinfluencepricesdownwards.Themoneycouldbeputtogooduseinensuringallare
![Page 1013: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1013.jpg)
wellhoused,butalsohousedinawaythatconsidersboththefutureandtheenvironmentasiftheymattered.Wecannotsimplybuildagainasfastaspossible.Mosthomessurviveforfarlongerthanmostpeople.Goodhousingstandsformanygenerations.Housingshouldbeaboutthelongterm,aboutprovision,notprofit.Shouldyouhavegottothispoint
andstillremaintobeconvincedthatthereisaseriousproblemtobeaddressed,ahousingcrisisrequiringverydifferentanswerstothosewhichareusuallyproffered,youcertainlyareamagnanimousreader,orperhapsonewillingtocountenanceviewsverydifferentfromyourown.Totrytofinallyconvinceyouthatallisfarfromsolidwhenitcomesto
![Page 1014: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1014.jpg)
housinginBritain,I’llleavethepenultimatewordstotheDublin-basedwriterJulianMercille.InanexhaustivestudyofhowthehousingbubbleinIrelandgrewsolarge,heconcludedthatsomanypeopleapparentlyshowedsolittleconcernforthefuturebecause‘priortothebubble’scollapse,themediamadelittlementionofit,remainedvagueaboutitortriedtorefuteclaimsthatitevenexisted,thussustainingit.’53
Whilefirstwritingthelastwordsofthisbook,inMay2013,IwatchedhowmutedwasthereactiontothedowngradingofCo-operativeBankstocks,whichweresuddenlyknockeddownsixlevelstojunkstatus.Thisnewswasmainlyconfinedtothespecialistfinancialpress.54Revisitingthosewordsinthe
![Page 1015: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1015.jpg)
autumnof2013,Iwonderwhytherewasnotmoreshockwhenitwasannouncedthat6,700landlordswouldbehavingtheirinterestratesgreatlyincreasedwithoutwarningbytheWestBromwichBuildingSociety(whichfoundanoteinthesmallprintallowingthemtodothis).ItgotafootnoteinthebroadsheetsandevenamentionontheBBC,55butwhynotmorecoverage?Nodoubtherewillpresentlybeanothereventand,asalways,I’mleftthinking,ifnotnow,thensoon.Ifthehousingcrisismustworsen
beforewecanbelieveinit,ourscopeforactionwillbelimited.Propertythathasbecomedevalued,becauseitwasnotbuiltinthe‘right’places,willbeunnecessarilyandwantonlydemolished;thehealthofmanywill
![Page 1016: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1016.jpg)
havebeenirreparablyharmed;financialsystems,havingforcedgreatdebtuponpeoplethatwillneverbefullyrepaid,willhavesunkfurtherintothemire;morepeoplewillhavebeentaughtthatlookingaftertheirowninterestsisalltheycandoandthattheywillgetbyonlyattheexpenseofothers.Thesoonerweact,theeasierit
willbe.Thelasttimewefacedacrisisasdeepasourpresentpredicamentthemassunemploymentandeventualwarthatfollowedchangedthecourseofhistory.Wehaveforgottensomuchofwhatwelearnedthen,butin1930,ayearafterthegreatcrash,apredictionwasmadefortheworldinacentury’stime.Itremainsapredictionthatcouldstillcometopassunlesswe
![Page 1017: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1017.jpg)
heeditswarningandthesolutionimpliedwithinit:
Ofcoursetherewillstillbemanypeoplewithintense,unsatisfiedpurposivenesswhowillblindlypursuewealth–unlesstheycanfindsomeplausiblesubstitute.Buttherestofuswillnolongerbeunderanyobligationtoapplaudandencouragethem.
–JohnMaynardKeynes,193056
Desistingfromapplaudingorencouragingthosewhowouldblindlypursuewealthturnedout,inthelongrun,nottobeenough.ThuswefindourselvesagaininthequandarythatKeynesidentified,alifetimeafterhewrotethosewords.Therewillalwaysbepeoplewhoaregreedy,buttherewillcomeatimewhenweproperlyrecognizethistobeaproblem,whenwelookatthe
![Page 1018: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1018.jpg)
relationsbetweenusmoresoberlythanwedonow,andwhenwearecompelledtoactonwhatwemoreclearlysee.AnotherprophecywasmadealifetimebeforeKeyneswaswriting.Itgavethisbookitstitle,andithasyettocometopass:
Allthatissolidmeltsintoair,allthatisholyisprofaned,andmanisatlastcompelledtofacewithsobersenses,hisrealconditionsoflife,andhisrelationswithhiskind.
–KarlMarxandFriedrichEngels,
184857
InJanuary2014theFinancialTimesreleasedananalysisshowingthatoverthecourseofjustthelastfiveyearstheequityofmortgageholdersinBritainhadfallenby£169billion,whilethatoflandlordshadrisen
![Page 1019: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1019.jpg)
byamassive£245billion.58
Thereisnosurersignofahousingcrisisturningintoadisasterthanthis.
![Page 1020: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1020.jpg)
Notes
1CRISIS
1.The61%figurecomesfromJ.Heartfield,Let’sbuild!Whyweneedfivemillionnewhomesinthenexttenyears,London:Audacity,2012.http://www.audacity.org/research.htm
2.P.Collinson,‘Houseprices:guidetopropertyhotspots’,Guardian,30March2012.http://www.guardian.co.uk/money/2012/mar/30/house-prices-guide-property-hotspots#
3.R.Lynch,‘UK“value”fallsby£94billion’,Independent,2August2010.http://www.independent.co.uk/news/uk/home-news/uk-value-falls-by-pound94-billion-2041594.html.OntheannualcostoftheNHS,thenaround£105billion,see:http://www.kingsfund.org.uk/projects/general-election-2010/faqs#budget
4.S.CarreraandJ.Beaumont,‘Incomeandwealth’,Socialtrends,No.41,Table5.http://www.ons.gov.uk/ons/rel/social-trends-rd/social-trends/social-trends-41/index.html
![Page 1021: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1021.jpg)
5.M.Easton,BBC,‘Housingcrisisdeepens’,BBCNews,12June2012.http://www.bbc.co.uk/news/uk-18416365
6.R.Ramesh,‘Sharpdropinnewaffordablehomesundercoalition,councildatashows’,Guardian,10February2013.http://www.guardian.co.uk/society/2013/feb/10/sharp-drop-new-affordable-homes
7.HPSauce,‘Cunningstunts’,PrivateEye,23August–5September2013,No.1,347,p.9.
8.S.HawkinsandJ.Bingham,‘EndoftheThatcherpropertyrevolution’,Telegraph,28June2013.http://www.telegraph.co.uk/news/politics/10149480/End-of-the-Thatcher-property-revolution.html
9.T.Ross,‘DavidCameron:mymortgageplanforstrugglingfamilies’,Telegraph,27September2013.http://www.telegraph.co.uk/news/politics/david-cameron/10342014/David-Cameron-My-mortgage-plan-for-struggling-families.html
10.https://www.gov.uk/government/news/montague-plan-offers-boost-to-private-rented-sector
11.ITN,‘Demandforhomesdoublestheratehousesarebuilt’,ITVNews,23August2012.http://www.itv.com/news/update/2012-08-23/reportoffers-blueprint-to-expand-private-rented-sector/
12.P.ThomasandH.Brennan,‘Osborneunveils£130billionMIGschemeand£3.5billionofsharedequityloans’,MoneyMarketing
![Page 1022: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1022.jpg)
Newspaper,20March2013.http://www.moneymarketing.co.uk/home/budget-2013/budget-13-osborne-unveils-130bn-mig-scheme-and-35bn-of-shared-equity-loans/1068076.article
13.C.Fincher,‘Governmentfleshesoutcontestedmortgageguaranteescheme’,Reuters,23July2013.http://uk.reuters.com/article/2013/07/23/uk-mortgage-guarantee-idUKLNE96M00820130723
14.M.d’Ancona,‘DavidCameron:aPrimeMinisterinahurry’,Telegraph,28September2013.http://www.telegraph.co.uk/news/politics/david-cameron/10341422/David-Cameron-a-Prime-Minister-in-a-hurry.html
15.L.Elliott,‘GeorgeOsborne’s“help-to-buy”scheme“amoronicpolicy”’,Guardian,4June2013.http://www.theguardian.com/business/2013/jun/04/george-osborne-help-to-buy-moronic
16.A.Withnall,‘Toriesbringforward“help-to-buy”:youngBritonstoget95%mortgagesnextweek’,Independent,29September2013.http://www.independent.co.uk/news/uk/home-news/tories-bring-forward-help-to-buy-young-britons-to-get-95-mortgages-next-week-8847350.html
17.InScotlandaverylimitedformoftheschemewillrun,onlysupportingmortgagesonnew-buildpropertyandthenonlythoseworthless
![Page 1023: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1023.jpg)
than£400,000:BBC,‘Scottish“help-to-buy”schemeunveiled’,BBCNewsScotland,27September2013.http://www.bbc.co.uk/news/uk-scotland-scotland-business-24297003
18.R.Ramesh,‘Extra10,000workingpeopleamonthreliantonhousingbenefit,saysreport’,Guardian,22October2012.http://www.theguardian.com/society/2012/oct/22/working-people-housing-benefit-report
19.G.Peev,‘Workingfamiliesonhousingbenefitsoar:numberofapplicationsrisingby10,000everymonth’,DailyMail,22October2012.http://www.dailymail.co.uk/news/article-2221111/Working-families-housing-benefit-soar-Number-applications-rising-10-000-month.html
20.D.Bartlett,‘WhydoestheUKsubsidizelandlordssomuch?’,LiverpoolDailyPost,28January2013.http://blogs.liverpooldailypost.co.uk/dalestreetblues/2013/01/why-does-the-uk-subsidise-land.html
21.Ramesh,‘Extra10,000workingpeopleamonthreliantonhousingbenefit’.
22.D.Johnson,‘Rentcontrols:shouldtheybereintroduced?’,Guardianhousingnetworkblog,5August2013.http://www.theguardian.com/housing-network/2013/aug/05/rent-control-debate
23.CommunitiesandLocalGovernmentCommittee,‘Supplementarywrittenevidence
![Page 1024: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1024.jpg)
submittedbyShelter’,February2013,postedonline16July.http://www.publications.parliament.uk/pa/cm201314/cmselect/cmcomloc/50/50ii06.htm
24.P.Inman,‘Bovisreportsboostinhalf-yearprofitsassalesrise18%withpricesup6%’,Guardian,20August2012.http://www.theguardian.com/business/2012/aug/20/housebuilder-bovis-boosts-half-year-profits
25.J.Titcomb,‘Barclayschiefwarnsofhousingbubble’,Telegraph,11September2013.http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/10301510/Barclays-chief-warns-of-housing-bubble.html
26.N.Klein,TheShockDoctrine:theriseofDisasterCapitalism,London:Picador,2008.
27.AttemptstosidelinethepoorintheUSshowthepriceofsuchfailure:‘Inpoorblackneighborhoods,evictionistowomenwhatincarcerationistomen:atypicalbutseverelyconsequentialoccurrencecontributingtothereproductionofurbanpoverty.’M.Desmond,‘Evictionandthereproductionofurbanpoverty’,AmericanJournalofSociology,Vol.118,No.1(2012),pp.88–133.
28.R.Frank,‘Fallingbehind:howrisinginequalityharmsthemiddleclass’,lecturepresentedtotheseventhAaronWildavskyForumforPublicPolicy,RichardandRhodaGoldmanSchoolofPublicPolicy,UniversityofCaliforniaatBerkeley,18–19October2001.ThebookbasedonthelecturewaspublishedbytheUniversityofCaliforniaPresson9July2007.
![Page 1025: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1025.jpg)
29.R.Frank,‘PositionalgoodsandkeepingupwiththeJoneses’,YoungFoundationandSmithInstitutejointseminar,No.11DowningStreet,September2006,replybyOliverJames.http://youngfoundation.org/publications/positional-goods-new-inequalities-and-the-importance-of-relative-position/
30.T.Walker,‘Society:theonlywayisFinland’,Independent,23May2012.http://www.independent.co.uk/news/uk/politics/society-the-only-way-is-finland-7778796.html
31.D.Dorling,Fairplay:areaderonsocialjustice,Bristol:PolicyPress,2012,Table44.1,p.349.
32.S.Pizzigati,Therichdon’talwayswin:theforgottentriumphoverplutocracythatcreatedtheAmericanmiddleclass,1900–1970,NewYork:SevenStoriesPress,2012.
33.‘Delinquency’isaUStermforpeopleinmortgagearrears.Seesectionbelowconcerningrepossessions,inChapter7byFigure20,page249.
34.Again,toseehowbadthesituationcanbecome,looktotheUS,where:‘Overall,thegovernment’sprioritiesremaininthewrongplace–itcontinuestospendthemajorityofitshousingsubsidiesonthosewhoneeditleast.’L.Cattell,etal.,Wecalltheseprojectshome,NewYork:RighttotheCityAlliance,2010,p.53.
![Page 1026: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1026.jpg)
http://www.righttothecity.org/index.php/resources/reports/item/61-we-call-these-projects-home
35.G.Oliver,‘Claim:“Draconianrulespreventingfirmsfrombuildinghomes”’,OxfordMail,21September2013.http://www.oxfordmail.co.uk/news/10669374.Claim_____Draconian_rules_preventing_firms_from_building_homes___/?ref=rc
2PLANNING
1.M.Stephens,‘TacklinghousingmarketvolatilityintheUK’,JosephRowntreeFoundation,researchreport,16May2012.http://www.jrf.org.uk/publications/tackling-housing-market-volatility-uk
2.Shelter,‘Buildingmorehomes’campaign,websiteaccessedAugust2013.http://england.shelter.org.uk/campaigns/why_we_campaign/building_more_homes
3.E.TwinchandN.Duxbury,‘Cablecallsformassivehouse-buildingprogramme’,‘InsideHousing’website,25September2012.http://www.insidehousing.co.uk/development/cable-calls-for-massive-house-building-programme/6523911.article
4.C.Hope,‘DavidCameronbacksNickBolesoverhouse-buildingplans’,Telegraph,5December2012.http://www.telegraph.co.uk/earth/hands-off-our-land/9724371/David-Cameron-backs-Nick-Boles-over-house-building-plans.html
5.D.Dorling,‘FairnessandthechangingfortunesofpeopleinBritain’,Journalofthe
![Page 1027: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1027.jpg)
RoyalStatisticalSociety(A),Vol.176,No.1(2013),pp.97–128.http://www.dannydorling.org/?page_id=3597
6.G.Speight,‘Thelendingfrenzyofthe1930s’,presentationmadeattheAshmolean,Oxford,2010.http://winton.ashmus.ox.ac.uk/PastSeminars/Michaelmas2010/Colloquium/Presentation%20Slides/Speight.pdf
7.F.Alvaredo,etal.,‘Thetop1%ininternationalandhistoricalperspective’,NationalBureauofEconomicResearchWorkingPaperNo.19075,May2013.http://www.nber.org/papers/w19075
8.H.Glennerster,‘WhywasawealthtaxfortheUKabandoned?Lessonsforthepolicyprocessandtacklingwealthinequality’,JournalofSocialPolicy,Vol.41,No.2(2012),pp.233–49.Page4offreeonlineversion:http://eprints.lse.ac.uk/42582/1/Why_was_a_wealth_tax_for_the_UK_abandoned_(lsero).pdf
9.R.Tunstall,‘Whatshouldweworryaboutwhenweworryabouthousingproblems?’,inaugurallecture,UniversityofYork,2012,Table2.http://www.york.ac.uk/chp/news/2012/inaugural/
10.Ibid.ThesefigurescomefromthesameTable2:ifanabsolutespacepovertylineisused,thatcanalsobeseentobegrowingfrom1991to2001,bywhichtimeover11%werepoorlyhoused.No2011figureshadyetbeencalculatedtocontinuethetimesseriesatthetimeofwritingthischapter,butsomeareincludedinChapter6below(seeFigure13)
![Page 1028: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1028.jpg)
andwhattheyrevealisadramaticriseinhousinginequality.
11.D.Dorling,Theno-nonsenseguidetoequality,Oxford:NewInternationalist,2012.
12.Figuresformedianageatdeatharenormallyhigherthanlifeexpectancybecauseinfantdeathsreducethemean.OfficeforNationalStatistics,‘MortalityinEnglandandWales:averagelifespan’,17December2012.http://www.ons.gov.uk/ons/dcp171776_292196.pdf
13.N.Cohen,‘Acoalitionofthecomplacent’,Spectator,7January2013.http://blogs.spectator.co.uk/nick-cohen/2013/01/a-coalition-of-the-complacent/
14.OfficeforNationalStatistics,‘Birthsbyareaofusualresidenceofmother,EnglandandWales,2011’,pressrelease,31October2012.http://www.ons.gov.uk/ons/rel/vsob1/births-by-area-of-usual-residence-of-mother--england-and-wales/2011/index.html
15.D.Dorling,ThepopulationoftheUK,London:Sage,2012(secondedition),Chapter2.
16.LondonCouncils(thelobbyingbodyofLondon’s32boroughcouncilsandtheCityofLondon),‘London’sschoolplaceshortage’,2013.http://www.londoncouncils.gov.uk/policylobbying/children/schools/primaryschools.htm
17.M.PemberReeves,Roundaboutapoundaweek,London:Virago,1913;1979reprint,p.35.
![Page 1029: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1029.jpg)
18.HouseofCommonsLibrary,‘Acenturyofchange:trendsinUKstatisticssince1900’,HouseofCommonsLibraryResearchPaperNo.99/111,UnitedKingdomParliament,21December1999.http://www.parliament.uk/documents/commons/lib/research/rp99/rp99-111.pdf(page12)/
19.C.Jones,‘BankofEngland’sMarkCarneyseekstowinoverguidancesceptics’,FinancialTimes,29August2013.http://www.ft.com/cms/s/0/bec5124e-0fd6-11e3-a258-00144feabdco.html
20.SeeA.Haldane,S.MillardandV.Saporta(eds.),Thefutureofpaymentsystems,London:RoutledgeInternationalStudiesinMoneyandBankingNo.43,2007,Chapter10byGeorgeSpeight.
21.G.Speight,‘Thelendingfrenzyofthe1930s’.22.T.Powley,‘UKgovernmentfacespressureto
drop“help-to-buy”mortgagescheme’,FinancialTimes,13August2013.http://www.ft.com/cms/s/0/43C4fob2-035d-11e3-b871-00144feab7de.html
23.B.Green,‘England’shousingstockgrowsslowerthanthepopulationforthefirsttimeindecades’,blogentryforBuilding.co.uk,30June2011.http://brickonomics.building.co.uk/2011/06/england’s-housing-stock-grows-slower-than-the-population-for-the-first-time-in-decades/
24.NationalHousingFederation,‘Parentsfeelthestrainasgrown-upkidsremainlivingat
![Page 1030: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1030.jpg)
home’,pressrelease,6September2013.http://www.housing.org.uk/media/press-releases/parents-feel-the-strain-as-grown-up-kids-remain-living-at-home
25.N.Crafts,‘Deliveringgrowthwhilereducingdeficits:lessonsfromthe1930s’,Centreforumpolicypaper,2011.http://www.centreforum.org/assets/pubs/delivering-growth-while-reducing-deficits.pdf
26.T.Leunig,‘Weneedtolearnfromthe1930s:inthe1930s,Britain’seconomygrewthankstolowinterestratesandhouse-building’,Telegraph,25April2012.http://www.telegraph.co.uk/news/politics/9226679/We-need-to-learn-from-the-1930s.html
27.L.Samy,‘“Theparadoxofsuccess”:theeffectofgrowth,competitionandmanagerialself-interestonbuildingsocietyrisk-takingandmarketstructure,c.1880–1939’,DiscussionPapersinEconomicandSocialHistoryNo.86,January2011,UniversityofOxford,Figure14.http://www.nuff.ox.ac.uk/economics/history/Paper86/Samy86.pdf
28.T.Greenham,headofFinanceandBusinessattheNewEconomicsFoundation,speakingonTheTodayProgramme,BBCRadio4,19December2012.http://news.bbc.co.uk/today/hi/today/newsid_9779000/9779870.stm
29.G.Eaton,‘Cameron’staxreturnisn’tenough’,NewStatesman,11April2012.http://www.newstatesman.com/blogs/staggers/2012/04/cameron-taxreferringtoTheTimes:
![Page 1031: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1031.jpg)
http://www.timesonline.co.uk/tol/news/politics/article6267193.ece?token=null&offset=84&page=8(firstaccessedbythisauthorwhenitwasnothiddenbehindapaywall,on15July2009).
30.DepartmentforCommunitiesandLocalGovernment,‘Livetablesondwellingstock(includingvacants).Table101:bytenure,UnitedKingdom(historicalseries)’,21May2013.https://www.gov.uk/government/statistical-data-sets/live-tables-on-dwelling-stock-including-vacants
31.T.Shepperson,‘TheRentAct1977incontext’,‘Landlord-Law’websiteblog,19July2011.http://www.landlordlawblog.co.uk/2011/07/19/the-rent-act-1977-in-context/
32.G.Horsfield,Familyspending:areportonthe2010livingcostsandfoodsurvey,London:OfficeofNationalStatistics,2012,p.13.http://www.ons.gov.uk/ons/rel/family-spending/family-spending/family-spending-2011-edition/index.html
33.Again,seeM.PemberReeves,Roundaboutapoundaweek,p.35.
34.P.K.Piff,etal.,‘Highersocialclasspredictsincreasedunethicalbehaviour’,ProceedingsoftheNationalAcademyoftheUnitedStates,publishedonline27February2013.http://www.pnas.org/content/early/2012/02/21/1118373109.full.pdf+html
35.A.Mani,etal.,‘Povertyimpedescognitivefunction’,Science,Vol.341,No.976(2013).
![Page 1032: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1032.jpg)
http://www.sciencemag.org/content/341/6149/976.full.pdf36.D.Dorling,‘Meanmachine:structural
inequalitymakessocialinequalityseemnatural’,NewInternationalist,Issue433(2012).http://newint.org/features/special/2010/06/01/structural-inequality/
37.M.Bennett-Smith,‘NiallFerguson:KeynesianeconomicsflawedbecauseKeyneswasgay,childless’,HuffingtonPost,4May2013.http://www.huffingtonpost.com/2013/05/04/niall-ferguson-keynesian-economics-gay-childless_n_3215427.html
38.M.Gongloff,‘NiallFergusonre-apologizesfordumbKeynesstatements,makesmoredumbstatements’,HuffingtonPost,5August2013.http://www.huffingtonpost.com/2013/05/08/niall-ferguson-apologizes-keynes_n_3238940.html
39.O.Wilde,‘Thesoulofmanundersocialism’,London:privatelyprinted,1891.http://www.marxists.org/reference/archive/wilde-oscar/soul-man/
40.Ibid.41.G.Fraser,‘Adebateoverwhetherdecent
housingisabasichumanrightislongoverdue’,Guardian,5July2013.http://www.guardian.co.uk/commentisfree/belief/2013/jul/05/debate-decent-housing-human-right
42.AttheNewYorkUniversitySchoolofLawand,inBritain,successortoIsaiahBerlinand
![Page 1033: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1033.jpg)
GeraldCohenastheChicheleProfessorofSocialandPoliticalTheoryatAllSoulsCollege,OxfordUniversity.
43.JeremyWaldron,thenProfessor,JurisprudenceandSocialPolicyProgram,BoaltHallSchoolofLaw,Berkeley,UniversityofCalifornia:J.Waldron,‘Homelessnessandtheissueoffreedom’,UCLALawReview,Vol.39(December1991),pp.295–324.http://faculty.washington.edu/pembina/all_articles/Waldron%201991.pdf
3FOUNDATIONS
1.ITN,‘Youngpeoplelockedoutofhousingmarket’,ITVNews,13June2012.http://www.itv.com/news/calendar/2012-06-13/young-people-locked-out-of-housing-market/
2.L.Bourke,‘Howtoleavepropertytoyourgrandchildren’,‘CityWire’websitemoneyblog,19September2012.http://citywire.co.uk/money/how-to-leave-property-to-your-grandchildren/a619412
3.Ibid.4.J.HillsandH.Glennerster,‘Whytheleft
needstotakewealthseriouslyagain’,Juncture,Vol.20,No.1(2013),pp.72–9.http://onlinelibrary.wiley.com/doi/10.1111/j.2050-5876.2013.00730.x/pdf
5.D.Dorling,etal.,Thegreatdivide:ananalysisofhousinginequality,London:
![Page 1034: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1034.jpg)
Shelter,2005.http://www.dannydorling.org/?page_id=460
6.J.Bingham,‘Twomillionelderlyplanningtosellhome’,Telegraph,21August2013.http://www.telegraph.co.uk/property/propertynews/10255271/Two-million-elderly-planning-to-sell-home.html
7.J.HillsandH.Glennerster,‘Whytheleftneedstotakewealthseriouslyagain’,p.74.
8.E.HowkerandS.Malik,Jiltedgeneration:howBritainhasbankrupteditsyouth,London:IconBooks,2010.
9.D.Willetts,Thepinch:howthebabyboomerstooktheirchildren’sfuture–andwhytheyshouldgiveitback,London:AtlanticBooks,2010.
10.J.Mercier,‘Greedisgood.Nowit’slegal’,‘SanlamPrivateInvestments’websiteblog,8August2013.http://www.spi.sanlam.co.uk/investment-thinking/investment-blog/greed-good-now-its-legal/
11.Theworld’sbest-off1%includeallofthebest-off10%intheUKandUS;becauseonlyaminorityofthisgrouparealsoholidayorsecond-homeowners,mostdonotseethemselvesaswealthy.SeethegraphinB.Sutcliffe,‘Theworlddistributionofgrossnationalincome’,EnvironmentandPlanningA,Vol.41,No.4(2009),p.764.http://www.envplan.com/abstract.cgi?id=a4227
![Page 1035: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1035.jpg)
12.N.Blackmore,‘Home-buyersinLondonneed£64,000deposit’,Telegraph,28August2013.http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/10271969/Home-buyers-in-London-need-64000-deposit.html
13.R.WilkinsonandK.Pickett,Thespiritlevel:whyequalityisbetterforeveryone,London:Penguin,2010.Notethisisthesecondeditionwithachangedsubtitle,becauseeventheveryrichestdobetterwhenallaremoreequal.
14.D.Staunton,NoamChomskyinterview:‘Thepubliccanmakeadifference–andinmoredemocraticsocieties,alotofdifference’,IrishTimes,1April2013.http://www.irishtimes.com/news/world/noam-chomsky-interview-the-public-can-make-a-difference-and-in-more-democratic-societies-a-lot-of-difference-1.1344852
15.TUCScotland(2010),‘Mythnumber7:theUK’sdeficitwascausedbyhighgovernmentspending’,report,2010.http://www.thereisabetterway.org/top-myths-about-the-crisis/the-uk-s-deficit-was-caused-by-high-government-spending
16.OfficeforNationalStatistics,‘Publicsectorfinances,March’,released23April2013.http://www.ons.gov.uk/ons/dcp171778_306382.pdf
17.S.P.ChanandM.Oliver,‘Budget2013:Britain’sdebtanddeficit’,Telegraph,20March2013.http://www.telegraph.co.uk/finance/budget/9932748/Budget-2013-Britains-debt-and-deficit.html
![Page 1036: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1036.jpg)
18.BBC,‘UKlosestopAAAcreditratingforfirsttimesince1978’,BBCBusinessNews,22February2013.http://www.bbc.co.uk/news/business-21554311
19.C.Keena,‘SeanDunnebankruptcyincontrastwithpositionofsmallborrowers:ifyouwantdebtforgiveness,youneedtohaveenormousdebts’,IrishTimes,3April2013.http://www.irishtimes.com/business/sectors/financial-services/sean-dunne-bankruptcy-in-contrast-with-position-of-small-borrowers-1.1346903
20.H.Spencer,Socialstatics;or,theconditionsessentialtohumanhappinessspecified,andthefirstofthemdeveloped,London:JohnChapman,1851.
21.USDepartmentofLabor,OnehundredyearsofUSconsumerspending:dataforthenation,NewYorkCity,andBoston:OfficeofPublicationsandSpecialStudies,2006.http://www.bls.gov/opub/uscs/
22.IncomeinequalityintheUSishighertodaythanatanytimesince1917.E.Saez,‘Strikingitricher:theevolutionoftopincomesintheUnitedStates’,workingpaper,UniversityofCalifornia,Berkeley,Figure2,updatedwith2012preliminaryestimates.http://elsa.berkeley.edu/~saez/saez-UStopincomes-2012.pdf
23.M.Easton,‘Rent“unaffordable”forlow-incomefamiliesinthirdofUK’,BBCNews,15July2013.
![Page 1037: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1037.jpg)
http://www.bbc.co.uk/news/business-23273448
24.ThatismoresquarefeetofhousingperpersonwhenitcomestoUKandUSmeasurements,squaremetreselsewhere.PossiblyjustaftertheBlackDeathwehadmore.Foranestimateoftheglobalhousingstockseedataat‘Worldmapper’website.http://www.worldmapper.org/display.php?selected=194
25.BBC,‘SocialhousingwaitinglistsriseinEngland’,BBCNews,15January2011.http://www.bbc.co.uk/news/uk-12198429
26.InEssex:J.Melley,‘Socialhousing:Essexhasthousandsonwaitinglists’,BBCNews,26January2013.http://www.bbc.co.uk/news/uk-england-essex-21202473
27.K.ReeveandE.Batty,‘Thehiddentruthabouthomelessness’,reportforCrisisandCRESR,May2011.http://www.crisis.org.uk/data/files/publications/HiddenTruthAboutHomelessness_web.pdf
28.That240,000figuremaybeanoverestimatemadefromassuming38%ofstreethomelesspeopleratherthanallhomelesspeoplehavesquatted.However,asanestimateofallthosewhohaveeversquatted,andgivenhowmanydidaschildrenwiththeirfamiliesaftertheSecondWorldWar,Ithinkitisreasonable.Forthesourcessee:K.Reeve,‘Squatting:ahomelessnessissue,anevidencereview’,reportpublishedbyCrisisandCRESR,
![Page 1038: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1038.jpg)
October2011.http://www.crisis.org.uk/publications-search.php?fullitem=327
29.A.Grice,‘NumbersofhomelesspeopleinUKupby17percent’,Independent,9September2011.http://www.independent.co.uk/news/uk/politics/numbers-of-homeless-people-in-uk-up-by-17-per-cent-2351644.html
30.A.McGibbon,‘Ifwewantthegovernmenttotakehousingseriously,anationaltenants’unionisthefirststep’,Independent,18February2013.http://www.independent.co.uk/voices/comment/if-we-want-the-government-to-take-housing-seriously-a-national-tenants-union-is-the-first-step-8500068.html
31.EmptyHomesAgency,‘StatisticalarchivesoftheEmptyHomesAgency’,June2011.http://emptyhomes.test-host.net/wp-content/uploads/2011/06/amended-stats-08-09-1.pdf
32.ThereisalsoavibrantpositivesquattingmovementgrowingagainacrossEuropebutittendstobefortheyoungandchildless.http://sqek.squat.net/;and,inparticular,SquattingEuropeKollective,SquattinginEurope:radicalspaces,urbanstruggles,NewYork:MinorCompositions,2013.http://sqek.squat.net/wp-content/uploads/2013/03/sqek-book.pdf
![Page 1039: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1039.jpg)
33.D.HenkeandR.Evans,‘ThemanyhomesofMichaelMeacher’,Guardian,20January2001.http://www.theguardian.com/uk/2001/jan/20/politics.labour
34.B.Obama,quotedandrecordedinK.Q.SeelyeandK.Bennett,‘ObamacountsMcCain’shouses’,politicalcommentblogoftheNewYorkTimes,21August2008.http://thecaucus.blogs.nytimes.com/2008/08/21/obama-counts-mccains-houses/
35.Thetruenumbermaybehigher.D.M.Halbfinger,‘TheMcCainproperties’,NewYorkTimes,23August2008.http://www.nytimes.com/ref/us/politics/mccain-properties.html?ref=politics
36.J.Steenhuysen,‘USlifeexpectancyfallsslightlyin2008:CDC’,Reuterspressrelease,9December2009.http://www.reuters.com/article/2010/12/09/us-life-expectancy-idUSTRE6B86K720101209Seesection‘Healthandeviction’belowastohowhousingisbecomingmoreconnectedtohealth.
37.D.Dorling,Unequalhealth:thescandalofourtimes,Bristol:PolicyPress,2013.
38.L.Berman,‘Death(certificates)tookholidayinwakeofbankruptcyfiling’,DetroitNews,29August2013.http://www.detroitnews.com/article/20130829/METRO01/308290046
39.TheoldphraseattributedtoFrancisBaconin1625comestomind:‘Moneyislikemuck,nogoodunlessitisspread.’Forthemodern-day
![Page 1040: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1040.jpg)
equivalentsofthistruism,seethe‘EqualityTrust’website.http://www.equalitytrust.org.uk/research/educationandhttp://www.equalitytrust.org.uk/research/mental-health
40.ChildWelfareInformationGateway,Howmanychildrenwereadoptedin2007and2008?,Washington,DC:USDepartmentofHealthandHumanServices,Children’sBureau,September2011.https://www.childwelfare.gov/pubs/adopted0708.pdf
41.BBC,‘Halfoftheworld’sprisonpopulationofaboutninemillionisheldintheUS,ChinaorRussia’,BBCNews,report,2013.http://news.bbc.co.uk/1/shared/spl/hi/uk/06/prisons/html/nn2page1.stm
42.JusticePolicyInstitute,Thepunishingdecade:prisonandjailestimatesatthemillennium,Washington,DC:JusticePolicyInstitute,2000.http://www.justicepolicy.org/images/upload/00-05_rep_punishingdecade_ac.pdf
43.Guardian,‘Housingcrisis:homeeconomics’,editorial,2September2012.http://www.guardian.co.uk/commentisfree/2012/sep/02/housing-crisis-home-economics-editorial
44.RoyalInstituteofCharteredSurveyors,‘RoyalInstituteofCharteredSurveyors/CiPortuguesehousingmarketsurvey:lettingssectorshowsfirstsignsofweakness’,pressrelease,November2012.
![Page 1041: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1041.jpg)
http://www.rics.org/Global/Portuguese-Housing-Market-Survey-November-2012.pdf
45.G.Tremlett,‘MorethanaquarterofSpanishworkforcearejobless’,Guardian,24January2013.http://www.theguardian.com/world/2013/jan/24/quarter-spanish-workforce-jobless
46.RTÉ,‘Fitchexpectsfurther20%dropinIrishhouseprices’,RTÉNews,9January2013.http://www.rte.ie/news/2013/0108/361799-fitch-sees-further-20-drop-in-irish-house-prices/
47.S.Binge,‘StillnobottomforSpanishhouseprices’,PropertyShowRooms,onlinemagazine,17September2013.http://www.propertyshowrooms.com/spain/property/news/still-no-bottom-for-spanish-house-prices_312902.html
48.ColmMcCarthy,describingtheresponsetoanewsitemonIrishTVon2October2008,quotedinM.Lewis,Boomerang:themeltdowntour,London:AllenLane,2011,p.98.
49.M.Lewis,‘WhenIrisheyesarecrying’,VanityFair,March2011.http://www.vanityfair.com/business/features/2011/03/michael-lewis-ireland-201103.print
50.J.Smyth,‘Ireland.Bleakhouses:thecountryfacesamortgagecrisisthatcouldtriggermassevictionsandjeopardisestability’,FinancialTimes,29April2013.
![Page 1042: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1042.jpg)
http://www.ft.com/cms/s/0/f5d742a8-a3a1-11e2-ac00-00144feabdc0.html
51.S.Garrett,‘AustralianswarnedofIrish-stylehousingcrash’,IrishTimes,2September2013.http://www.irishtimes.com/business/sectors/commercial-property/australians-warned-of-irish-style-housing-crash-1.1512560
52.P.Geoghegan,‘RebuildingIceland’,SundayBusinessPost,22May2011.http://www.petergeoghegan.com/?p=462
53.P.Eavis,‘Irelandplansboldmeasurestolifthousing’,NewYorkTimes,9October2012,p.A1(NewYorkedition).http://dealbook.nytimes.com/2012/10/08/ireland-mortgage-bill-aims-to-aid-owners-and-jump-start-economy/
54.J.Smyth,‘Irelandactsonunsustainablemortgages’,FinancialTimes,13March2013.http://www.ft.com/cms/s/0/fc299d74-8bfd-11e2-b001-00144feabdc0.html
55.R.BurtenshawandA.Robinson,DavidHarveyinterview:‘Theimportanceofpost-capitalistimagination’,RedPeppermagazine,August2013.http://www.redpepper.org.uk/david-harvey-interview-the-importance-of-postcapitalist-imagination/
56.R.Kitchin,S.O’CallaghanandJ.Gleeson,‘Unfinishedestatesinpost-CelticTigerIreland’,NorthernIrelandStatisticsandResearchAgencyWorkingPaperNo.67,
![Page 1043: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1043.jpg)
2012,p.13.http://ebookbrowse.com/nirsa-working-paper-67-unfinished-estates-in-post-celtic-tiger-ireland-pdf-d312024595
57.P.Geoghegan,‘Icelandicmyths’,LondonReviewofBooks,25June2012.http://www.lrb.co.uk/blog/2012/06/25/peter-geoghegan/icelandic-myths/
58.HMTreasury,ReportunderSection2oftheLoanstoIrelandAct2010:1October2012to31March2013,London:HerMajesty’sTreasury,2013.https://www.gov.uk/government/publications/bilateral-loan-to-ireland
59.D.O’Donovan,‘Propertycrash“over”asMoody’sinsistsmarketatbottom’,IrishIndependent,14November2013.http://www.independent.ie/irish-news/property-crash-over-as-moodys-insists-market-at-bottom-29753716.html
60.J.Mackintosh,‘Europe’shousepricebubbles:Iceland,IrelandandSpainupdated’,FinancialTimes,‘LongShort’blog,13March2013.http://blogs.ft.com/ft-long-short/2013/03/13/europes-house-price-bubbles-iceland-ireland-and-spain-updated/
61.S.Lyall,‘AbruisedIcelandhealsamidEurope’smalaise’,NewYorkTimes,7July2012.http://www.nytimes.com/2012/07/08/world/europe/icelands-economy-is-mending-amid-europes-malaise.html?_r=1
![Page 1044: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1044.jpg)
62.OnlythreecountriesinEuropearemoreequitablethanGermany,accordingtotheir90:10incomeinequalityratios:Sweden,NorwayandFinland.Housingmarketswerefarmorelikelytogetintocrisisincountrieswithhighincomeinequalities.SeeD.Dorling,Injustice:whysocialinequalitypersists,Bristol:PolicyPress,2010,p.323,n.37.
63.R.Rayasam,‘“Cementgold”:Germanpropertymarketsoarsamideurocrisis’,DerSpiegel,22June2012.http://www.spiegel.de/international/germany/german-real-estate-market-soars-amid-euro-crisis-a-838437.html
64.C.Bryant,‘Germany’sgoldstandardjobsrecordmaskshiddenflaws’,FinancialTimes,2September2013.http://www.ft.com/cms/s/0/0bf80e46-0fc2-11e3-99e0-00144feabdc0.html
65.O.Hatherley,‘Aterracehousefor£1or£250million–Britain’sbizarrehousingcrisis’,Guardian,24April2013.http://www.theguardian.com/commentisfree/2013/apr/24/terraced-house-250m-housing-crisis
66.N.Blechner,‘DrohtinDeutschlandeineImmobilienblase?’(‘IsGermanythreatenedbyrealestatebubble?’),ARD.deNews,15January2013.http://boerse.ard.de/performance-und-rendite/vorsorge/droht-in-deutschland-eine-immobilienblase100.html
![Page 1045: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1045.jpg)
67.LandRegistry,‘Housepriceindex,July’,released29August2013.http://www.landregistry.gov.uk/__data/assets/pdf_file/0010/54001/HPIReport20130822.pdf
68.I.Birrell,‘Thehousingcrisis:anightmarecausedbyoursanctifiedsuburbandreams’,Guardian,20August2012.http://www.guardian.co.uk/commentisfree/2012/aug/20/planning-housing
69.RoyalInstituteofCharteredSurveyors,‘NewRICScommissionintotheUKhousingcrisis’,RICSpressrelease,7February2013.http://www.rics.org/uk/knowledge/news-insight/press-releases/new-rics-housing-commission-calls-for-evidence/
70.S.Nolan,‘Britainfacesslowesthousingmarketrecoveryonrecordwithsomepropertypricesnotsettopeakagainuntil2021’,DailyMail,6January2013.http://www.dailymail.co.uk/news/article-2257916/Britain-faces-slowest-housing-market-recovery-record-property-prices-set-peak-2021.html
71.H.Brennan,‘“Help-to-buy”couldspark30%surgeinhouseprices’,MoneyMarketing,7May2013.http://www.moneymarketing.co.uk/news-and-analysis/mortgages/help-to-buy-could-spark-30-surge-in-house-prices/1070754.article
72.RoyalInstituteofBritishArchitects,‘2013budget:amissedopportunityonaffordablehousingandgreengrowth’,RIBApress
![Page 1046: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1046.jpg)
release,20March2013.http://www.architecture.com/NewsAndPress/News/RIBANews/News/2013/2013BudgetAmissedopportunityonaffordablehousingandgreengrowth.aspx
73.HPSauce,‘GeorgeOsborne’s£15.5billion“help-to-buy”’,PrivateEye,No.1337(5April2013),p.9.
74.L.Chiswick,‘“FirstBuy”:flawed,andsuchsmallportions–agovernmentinitiativetoreignitethehousingmarketoffersalifelinetobuildersbutlittleforbuyers’,‘CityWire’websitemoneyblog,22June2011.http://citywire.co.uk/money/firstbuy-flawed-and-such-small-portions/a502558
75.A.Jones,‘CompanybehindthenewNotts.campusgoesbust’,NottinghamTabStudentNewspaper,1April2013.http://nottingham.tab.co.uk/2013/04/01/opal-goes-bust/
76.A.Jupp,‘ThirteenOpalcompaniesfallintoadministration’,ManchesterEveningNews,13March2013.http://www.manchestereveningnews.co.uk/business/property/further-13-companies-within-manchester-1741874
77.BBC,‘UKwagesdeclineamongworstinEurope’,BusinessNews,11August2013.http://www.bbc.co.uk/news/business-23655605
78.H.Wilson,‘Nearly2,500Britishbankerspaidover€1million,saysEUregulator’,Telegraph,15July2013.http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10180313/Nearly-2500-British-bankers-paid-over-1m-says-EU-regulator.html
![Page 1047: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1047.jpg)
79.B.Brady,‘Labourrevivesplantoprotectprivatetenants’,Independent,13January2013.http://www.independent.co.uk/news/uk/politics/labour-revives-plan-to-protect-private-tenants-8449404.html
4BUILDING
1.H.Rifkind,‘Whyweshouldfearthenewhousingbubble’,Spectator,17August2013.http://www.spectator.co.uk/columnists/hugo-rifkind/8993311/why-we-should-fear-the-new-housing-bubble/
2.J.Rickards,‘RepealofGlass–Steagallcausedthefinancialcrisis’,USNews,27August2012.http://www.usnews.com/opinion/blogs/economic-intelligence/2012/08/27/repeal-of-glass-steagall-caused-the-financial-crisis
3.L.Adelman,‘Racialpreferencesforwhites:thehousesthatracismbuilt’,SanFranciscoChronicle,29June2003,quotedonSlide23ofS.Carlson,‘AhistoryofhomelessnessinAmerica:homelessness101’,two-dayworkshop.http://mesh-mn.org/workshops-events/homelessness-101/RelyinggreatlyinturnonKenKusmer’sDownandout,ontheroad:thehomelessinAmericanhistory,Oxford:OUP,2002.
4.A.Smithers,Theroadtorecovery–howandwhyeconomicpolicymustchange,
![Page 1048: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1048.jpg)
Chichester:Wiley,2013.5.M.West,‘Capitallosses:theinteractivemap
thatshowstheLondonboroughswherehousepricesareactuallyFALLING’,DailyMail,17September2013.http://www.thisismoney.co.uk/money/mortgageshome/article-2423620/The-London-boroughs-house-prices-falling-just-like-rest-country.html
6.A.HullandG.Cooke,‘Togetherathome:anewstrategyforhousing’,InstituteforPublicPolicyResearch,report,21June2012,p.53.http://www.ippr.org/publication/55/9279/together-at-home-a-new-strategy-for-housing
7.L.Boyce,‘OECDrevealstheworld’scheapestandmostovervaluedpropertymarkets’,DailyMail,‘ThisisMoney’website,1June2013.http://www.thisismoney.co.uk/money/mortgageshome/article-2333944/Property-prices-Britain-31-high-says-OECD.html
8.P.Wintour,‘Weneedtobuildhousesonathirdmoreland,saysplanningminister’,Guardian,27November2012.http://www.guardian.co.uk/society/2012/nov/27/housebuilding-needs-more-open-land
9.W.Hurst,‘Labourfireswarningoverland“hoarding”’,BuildingMagazine,21June2013.http://www.building.co.uk/news/labour-fires-warning-over-land-hoarding/5056698.article
10.L.Mark,‘BovisHomesbossslamslandhoardingclaimsas“nonsense”’,Architects’
![Page 1049: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1049.jpg)
Journal,21August2013.http://www.architectsjournal.co.uk/news/bovis-homes-boss-slams-land-hoarding-claims-as-nonsense/8652223.article
11.Staffreporter,‘WhoownsBritain:topUKlandowners’,CountyLife,11November2010.http://www.countrylife.co.uk/countryside/article/506868/Who-owns-Britain-Top-UK-landowners.html
12.W.Johnson,‘UKmigrationfallsbyaquarterasstudentandforeignworkernumbersfall’,Telegraph,29November2012.http://www.telegraph.co.uk/news/uknews/immigration/9711047/UK-migration-falls-by-a-quarter-as-student-and-foreign-worker-numbers-fall.html
13.OutsideofSydney!NotehousingpricesarehighintheUKbecausewealthinequalitiesarehigh.Inothercountrieswithfarlesshousingavailableperperson,pricesareoftenlower.
14.A.Hill,‘Woman,81,lefttostarveafterimmigrationraidoncarecompany’,Guardian,9May2013.http://www.guardian.co.uk/society/2013/may/09/woman-left-to-starve-raid-care-company
15.C.Blackhurst,‘LibDemsinfreshrowover“racistleaflet”’,Independent,11November1993.http://www.independent.co.uk/news/uk/lib-dems-in-fresh-row-over-racist-leaflet-1503514.html
![Page 1050: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1050.jpg)
16.W.Johnson,‘Curbingmassimmigrationcouldbringdownhouseprices,TheresaMaysays’,Telegraph,12December2012.http://www.telegraph.co.uk/news/uknews/immigration/9739590/Curbing-mass-immigration-could-bring-down-house-prices-Theresa-May-says.html
17.R.Syal,‘BorisJohnsoncriticizesTheresaMayoverimmigrationclaim’,Observer,16December2012.http://www.guardian.co.uk/politics/2012/dec/16/boris-johnson-theresa-may-immigration
18.AllthesefigurescomefromTable209ofagovernmentstatisticaldatasetasaccessedon17January2013from:https://www.gov.uk/government/statistical-data-sets/live-tables-on-house-building
19.SeeChapter6ofthisbookfordetailsofwhatthelatestcensusrevealsaboutboththenumbersofroomsandbedroomsinresidentialhousinginBritainin2011andhowroomsperpersonhaveincreased.
20.T.Lloyd,‘Letcouncilsbuild–andborrow’,Shelter,policyblog,13March2013.http://blog.shelter.org.uk/2013/03/let-councils-build-and-borrow/
21.P.Collinson,‘Equityreleaseisnotthesolutionforolderpeoplewhoneedextracash’,Guardian,16March2013.http://www.guardian.co.uk/money/blog/2013/mar/16/equity-release-older-people-cash
22.E.Klinenberg,‘Iwanttobealone:theriseandriseofsolo-living’,Guardian,30March
![Page 1051: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1051.jpg)
2012.http://www.guardian.co.uk/lifeandstyle/2012/mar/30/the-rise-of-solo-living.
23.D.Dorling,Population10billion,London:Constable,2013,p.229.
24.PersonalcommunicationswithAlexFenton,referringinturntotheestimatesmadeofrequiredstockrepairsintheEnglishHousingSurvey.Seealsothe1984workofA.Curtis,‘ThegreatBritishhousingdisaster’.http://www.youtube.com/user/AdamCurtisFilms/videos
25.Oxfam,Theperfectstorm:economicstagnation,therisingcostofliving,publicspendingcutsandtheimpactonUKpoverty,Oxford:Oxfam,2012.poverty,http://policy-practice.oxfam.org.uk/publications/the-perfect-storm-economic-stagnation-the-rising-cost-of-living-public-spending-228591
26.Rightmove,‘Summersellingchallenge’,JulyIndex,2012.http://www.rightmove.co.uk/news/house-price-index/july-2012
27.H.Osborne,andJ.Treanor,‘Mortgagelendingstallsoversix-monthperiod’,Guardian,25March2013.http://www.guardian.co.uk/money/2013/mar/25/mortgage-lending-stalls-six-months-bba
28.Althoughestateagentsputthefalldowntorisingstampduty;seeR.Neate,‘Foreignbuyersbehindhalfof£2million-plushomesalesinLondon’,Guardian,6May2013.
![Page 1052: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1052.jpg)
http://www.guardian.co.uk/business/2013/may/06/foreign-buyers-luxury-home-sales-london
29.H.Jones,‘Averagetwo-bedprimeLondonpropertytohit£1million’,‘IntroducerToday’website.http://www.introducertoday.co.uk/news_features/average-two-bed-prime-london-property-to-hit-C2A31-million?tickertape=yes
30.StatutoryInstrumentNo.2,625,‘Housing,England:TheHousing(EmptyDwellingManagementOrders)(PrescribedPeriodofTimeandAdditionalPrescribedRequirements)(England)(Amendment)Order2012’,made17October2012;laidbeforeparliament23October2012;cameintoforce15November2012.http://www.legislation.gov.uk/uksi/2012/2625/pdfs/uksi_20122625_en.pdf
31.N.Duxbury,‘PMtobewarned–cutgreenleviesandyouwillincreasebillsforpoor’,‘InsideHousing’website,25October2013.http://www.insidehousing.co.uk/eco/pm-to-be-warned-cut-green-levies-and-you-will-increase-bills-for-poor/6529212.article
32.Shelter,personalcommunication–withresearchersofthecharityattemptingtoestimatethenumber,London,June2013.Asyetnopolicydocumenthasbeenpublishedgivinganactualestimate.
33.A.Fenton,‘Housingbenefitreformandthespatialsegregationoflow-incomehouseholdsinLondon’,report,UniversityofCambridge(AlexisnowbasedattheLondonSchoolof
![Page 1053: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1053.jpg)
Economics);anonlinecopyofthereportishere:http://www.cchpr.landecon.cam.ac.uk/outputs/detail.asp?OutputID=240SeealsoA.Fenton,etal.,‘Publichousing,commodification,andrightstothecity:theUSandEnglandcompared’,Cities,Vol.35(2013),pp.373–8.http://dx.doi.org/10.1016/j.cities.2012.10.004
34.ForabriefhistoryofsimilarattacksseeT.Slater,‘Grievingforalosthome,revisited:theBedroomTaxanddisplacement’,UniversityofEdinburgh,SchoolofGeosciencesblogentry,23September2013.http://www.geos.ed.ac.uk/homes/tslater/bedroomtax.html
35.B.ThomasandD.Dorling,IdentityinBritain:acradle-to-graveatlas,Bristol:PolicyPress,2007.http://www.dannydorling.org/?page_id=1467
36.LondonBoroughofHammersmithandFulham,cabinetbriefing,23April2012,p.141.http://image.guardian.co.uk/sys-files/Guardian/documents/2012/05/02/hamm.pdf
37.R.Ford,‘Knee-jerkIslamaphobia:whyTrevorKavanaghiswrongaboutBritishMuslims’,NewStatesman,21January2013.http://www.newstatesman.com/politics/2013/01/knee-jerk-islamophobia-why-trevor-kavanagh-wrong-about-british-muslims
38.HomeOwnersAlliance,‘Thedeathofadream:thecrisisinhomeownershipintheUK’,report,2012,p.10.http://hoa.org.uk/campaigns/publications-
![Page 1054: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1054.jpg)
2/the-death-of-a-dream-the-crisis-of-homeownership-in-the-uk/
39.D.Leigh,H.FraymanandJ.Ball,‘Revealed:therealidentitiesbehindBritain’ssecretpropertydeals’,Guardian,26November2012.http://www.guardian.co.uk/uk/2012/nov/26/indentities-behind-secret-property-deals
40.R.Brooks,Thegreattaxrobbery:howBritainbecameataxhavenforfatcatsandbigbusiness,London:OneworldPublications,2013,p.161oftypescript.
41.J.Ball,‘SecretfilmshowshowbuyersofluxuryLondonhomescanavoidmillionsintax’,Guardian,16December2012.http://www.guardian.co.uk/uk/2012/dec/16/london-property-tax-avoidance-offshore
42.O.Wainwright,‘Billionaires’basements:theluxurybunkersmakingholesinLondonstreets’,Guardian,9November2012.http://www.guardian.co.uk/artanddesign/2012/nov/09/billionaires-basements-london-houses-architecture
43.Andtheoldandthepoorarepushedoutandoff.ForavividaccountseeB.Dumbleton,Helpus,somebody:thedemolitionoftheelderly,London:TheLondonPress,2006.
44.BBC,‘Highstreetvacanciesstillstubbornlyhigh,saysreport’,BBCBusinessNews,10September2013.http://www.bbc.co.uk/news/business-24025297
![Page 1055: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1055.jpg)
45.G.LynnandE.Davey,‘Londonlettingagents“refuseblacktenants”’,BBCNewsLondon,14October2013.http://www.bbc.co.uk/news/uk-england-london-24372509
46.J.Bingham,‘WhitegroupsfacingunspokenracisminUK,saysDoreenLawrence’,Telegraph,19February2013.http://www.telegraph.co.uk/education/educationnews/9880562/White-groups-facing-unspoken-racism-in-UK-says-Doreen-Lawrence.html
47.S.Beasor,‘Housingbenefitandwelfarereform:impactoftheproposedchangesonblackandminorityethniccommunities’,BetterHousingBriefingPaperNo.18,RaceEqualityFoundation,April2011.http://www.better-housing.org.uk/briefings/housing-benefit-and-welfare-reform-impact-proposed-changes-black-and-minority-ethnic-commu
48.S.Swinford,‘UNreportcriticizingBedroomTaxis“absolutedisgrace”saysGrantShapps’,Telegraph,11September2013.http://www.telegraph.co.uk/news/politics/10301297/UN-report-criticising-bedroom-tax-is-absolute-disgrace-says-Grant-Shapps.html
49.RollingitouttoallareasbytheendofSeptember2013:DepartmentofWorkandPensions,‘Benefitcap:finalstagestarts’,pressreleaseissuedunderthepolicyheadingof‘Simplifyingthewelfaresystemandmakingsureworkpays’,12August2013.
![Page 1056: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1056.jpg)
https://www.gov.uk/government/news/benefit-cap-final-stage-starts
50.BBC,‘BorisJohnsoncriticizedfor“Kosovo”benefitsremark’,BBCNews,28October2010.http://www.bbc.co.uk/news/uk-politics-11640219
51.A.Gentleman,‘Squeezedout:Londonlandlordsevicttenantshitbyhousingbenefitcap’,Guardian,24April2010.http://www.guardian.co.uk/society/2012/apr/24/london-landlords-housing-benefit-cap
52.Thereissadlyalongprecedentfordoingnothinginthefaceofobviousunfairness.InhousinghistoryseeP.Marcuse,‘Gentrification,abandonmentanddisplacement:connections,causesandpolicyresponsesinNewYorkCity’,JournalofUrbanandContemporaryLaw,Vol.28(1985),pp.195–240.
53.R.Ramesh,‘CamdenCouncilplanstomove761poorfamiliesfromLondon’,Guardian,13February2013.http://www.guardian.co.uk/uk/2013/feb/13/london-council-relocation-benefits-cap
54.P.ButlerandB.Ferguson,‘HomelessfamiliestobeexpelledfromLondonbycouncils’,Guardian,4November2012,includingarecord1,448commentsfrommembersofthepubliconthewebsite.http://www.guardian.co.uk/society/2012/nov/04/london-boroughs-housing-families-outside-capital
![Page 1057: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1057.jpg)
55.N.Cohen,‘Dumpingthepoor:NickCohenunravelsthehomes-for-votesscandalengulfingDameShirleyPorter’,Independent,16January1994.http://www.independent.co.uk/news/uk/dumping-the-poor-nick-cohen-unravels-the-homesforvotes-scandal-engulfing-dame-shirley-porter-and-reveals-that-her-successors-on-westminster-council-are-still-1407226.html
56.M.Macdonald,‘Localelections:favourableverdictonhomes-for-votes’,Independent,7May1994.http://www.independent.co.uk/news/uk/local-elections-favourable-verdict-on-homesforvotes-1434137.html
57.R.Kay,‘UntoldtaleofDameShirleyPorter’sscandal’,DailyMail,1September2009.http://www.dailymail.co.uk/debate/article-1210385/RICHARD-KAY-Untold-tale-Dame-Shirley-Porters-scandal.html
58.J.Dromey,oppositionhousingspokesman,quotedinR.Ramesh,‘Londoncouncilsfacequestionsforhousingfamiliesoutsidethecapital’,Guardian,3December2012.http://www.guardian.co.uk/society/2012/dec/03/london-councils-housing-families-outside-capital
59.C.Hartman,Cityforsale:thetransformationofSanFrancisco,Berkeley:UniversityofCaliforniaPress,2002.
60.J.Silver-Greenberg,‘ACLUsuesMorganStanleyovermortgageloans’,NewYork
![Page 1058: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1058.jpg)
Times,15October2012.http://www.nytimes.com/2012/10/15/business/aclu-to-sue-morgan-stanley-over-mortgage-loans.html
61.B.ThomasandD.Dorling,IdentityinBritain:acradle-to-graveatlas,Bristol:PolicyPress,2007(seechaptersontheelderly,mapsoftenureofpeopleagedoversixty-fiveinLondon).
62.ThomasandDorlingasabove,butnowlookatthechapteronchildrenandthemapsontheirethnicity.Somecanbeviewedforfreehere:http://www.dannydorling.org/books/identity/
63.InEnglandandWalesin1911:‘Domesticserviceisstillthemainoccupationforworkingwomen,employing1,345,358’.http://www.hastingspress.co.uk/history/1914bluebook.htm
64.B.Roberts,‘BorisJohnsonrace-rowfury:DavidCameronwasblastedafterrefusingtocondemnBorisJohnsonforcallingblackchildren“piccaninnies”’,DailyMirror,10December2007.http://www.mirror.co.uk/news/uk-news/boris-johnson-race-row-fury-527310
65.D.Dorling,‘Migration:along-runperspective’,InstituteforPublicPolicyResearch,paper,2009.http://www.ippr.org/publication/55/1688/migration-a-long-run-perspective
![Page 1059: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1059.jpg)
5BUYING
1.F.Islam,‘Homeownership:howthepropertydreamturnedintoanightmare’,Observer,18August2013.http://www.theguardian.com/books/2013/aug/18/default-line-extract-faisal-islam-housing
2.Oxfam,Theperfectstorm:economicstagnation,therisingcostofliving,publicspendingcuts,andtheimpactonUKpoverty,Oxford:Oxfam,2012,p.41.http://policy-practice.oxfam.org.uk/publications/the-perfect-storm-economic-stagnation-the-rising-cost-of-living-public-spending-228591
3.D.Clapham,etal.,‘Housingoptionsandsolutionsforyoungpeople’,JosephRowntreeFoundationreport,June2012.http://www.jrf.org.uk/publications/housing-options-solutions-young-people
4.Ibid.,p.43.5.J.Rankin,‘Prudentialinvestsin“Generation
Rent”in£100milliondeal’,Guardian,3April2013.http://www.guardian.co.uk/business/2013/apr/03/prudential-invests-generation-rent-100m-deal
6.G.White,‘PrudentialbossTijaneThiam’spaysoarsto£7.8million,despiteFSAcensure’,Telegraph,5April2013.http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/insurance/9974069/Prudential-boss-Tijane-Thiams-pay-soars-to-7.8m-despite-FSA-censure.html
7.D.Clapham,etal.,‘Housingoptions’,p.45.
![Page 1060: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1060.jpg)
8.M.Sergeant,‘Housing:theGrantShappsvJackDromeyrowdeconstructed’,BBCNews,13June2012.http://www.bbc.co.uk/news/uk-politics-18415715
9.R.Ramesh,‘UKhousingshortageturningunder-thirtiesinto“GenerationRent”’,Guardian,13June2012.http://www.guardian.co.uk/society/2012/jun/13/generation-rent-uk-housing-shortage
10.‘Theimpactofwelfarereformonhousingassociations’,HouseMarkNews,Issue612(2013).http://www.housemark.co.uk/Newsletter.nsf/1/33BD59ABE761608780257B01003AEDA3?OpenDocument
11.A.HullandG.Cooke,‘Togetherathome:anewstrategyforhousing’,InstituteforPublicPolicyResearch,report,21June2012,p.53.http://www.ippr.org/publication/55/9279/together-at-home-a-new-strategy-for-housing
12.D.Dorling,TheNo-nonsenseguidetoequality,Oxford:NewInternationalist,2012.
13.‘January2012nightcount’(633,782people),NationalAlliancetoEndHomelessness(NAEH),2013.http://www.endhomelessness.org/pages/faqsandhttp://www.naeh.org/
14.Seethe‘CharteredInstituteofHousing’website.http://www.cihhousing.com/asaccessedJanuary2013.BySeptember2013itwasalreadyadvertisingthe2014conference(24–6Juneifinterested)!
![Page 1061: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1061.jpg)
15.Forquotesonthe2013conferencesee:http://www.cihhousing.com/page.cfm/Link=63andforphotographsoftheCapitaandKierstands,andfetchingimagesofJohnPrescottandMichaelHeseltine,seethephotogallery:http://www.cihhousing.com/page.cfm/Action=photoGallery/
16.S.Hodkinson,‘HowtheConservativesruinedsocialhousing’,Independent,1October2012.http://www.independent.co.uk/voices/comment/how-the-conservatives-ruined-social-housing-8192726.html
17.P.Toynbee,‘Howtoturnahousingcrisisintoahomelesscatastrophe’,Guardian,18February2013.http://www.guardian.co.uk/commentisfree/2013/feb/18/housing-crisis-bedroom-tax-failure-to-build
18.L.Simpson,‘Moresegregationormoremixing?’,EconomicandSocialResearchCouncilCentreonDynamicsofEthnicity,report,December2012.http://www.ethnicity.ac.uk/census/869_CCSR_Bulletin_More_segregation_or_more_mixing_v7NW.pdf
19.N.Ledwith,‘Sparebedroomtaxonunoccupiedcouncilhouseroomscouldforcepensionerstomoveintosmallerhomes’,DailyMail,18February2013.http://www.dailymail.co.uk/news/article-2280358/Spare-bedroom-tax-force-pensioners-smaller-homes.html#
20.P.Butler,‘FostercarerswithmorethanonechildwillstillfaceBedroomTax’,Guardian,14March2013.
![Page 1062: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1062.jpg)
http://www.guardian.co.uk/society/2013/mar/14/foster-carers-bedroom-benefits-cut
21.Aspareroomisoftenneeded,forinstance,duetouncontrolledshoutingatnight,notjusttostoreequipmentsuchasawheelchair;orbecauseextraspacebythesideofabedisrequiredforotherequipment.
22.NationalHousingFederation,‘BedroomTax’webpage.http://www.housing.org.uk/policy/welfare_reform/%E2%80%98under-occupation%E2%80%99_penalty.aspx
23.IhadbetterkeephisidentityanonymousincasetheMetropolitanHousingAssociationgetsupset.
24.C.Brown,‘LordsfearBedroomTaxwillhurtdisabledtenants’,‘InsideHousing’website,17October2012.http://www.insidehousing.co.uk/tenancies/lords-fear-bedroom-tax-will-hurt-disabled-tenants/6524235.article
25.D.Long,‘Prettyvacant?Howpoliciesonunderoccupationwillhitnortherntenants’,Guardian,housingnetworkblog,3October2011.http://www.guardian.co.uk/housing-network/2011/oct/03/pretty-vacant-under-occupation-northern-tenants
26.ThepseudonymbeingClareBelzofNorthStaffordshire.http://www.theguardian.com/housing-network/2011/oct/03/pretty-vacant-under-occupation-nothern-tenants#start-of-comments
![Page 1063: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1063.jpg)
27.J.Harris,‘Thesparebedroomtax:amessofcontradictionandimpossibility’,Guardian,25January2013.·http://www.guardian.co.uk/society/2013/jan/25/spare-bedroom-tax-contradiction-impossibility
28.E.Lester,‘Socialhousingspareroomsaluxury–welfareminister’,BBCNews,6June2012.http://www.bbc.co.uk/news/uk-politics-13671653
29.K.Mudie,‘Loadsofroomtotalk!BedroomTaxToryLordFreudlivesineight-bedroomcountrymansion’,Mirror,19January2013.http://www.mirror.co.uk/news/uk-news/bedroom-tax-tory-lord-freud-1545677
30.E.Budd,‘Havingababytogetacouncilhouse?Notin2012’,‘Mumsnet’website,2012.http://www.mumsnet.com/Talk/am_i_being_unreasonable/a1568974-Having-a-baby-to-get-a-council-house
31.ObservationbyLyneLeesHollen,madein1990,quotedinK.C.Martin,Hardandunrealadvice:mothers,socialscienceandtheVictorianpovertyexperts,NewYork:Palgrave,2008,p.55.
32.Shelter,‘“GenerationRent”familiesdoubleintenyears’,pressrelease,1July2013.http://england.shelter.org.uk/news/july_2013/generation_rent_families_double_in_10_years
33.P.Hetherington,‘England’shousingcrisisisbeingignoredbypoliticians’,Guardian,8January2013.http://www.guardian.co.uk/society/2013/jan/08/england-housing-crisis-ignored-politicians
![Page 1064: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1064.jpg)
34.Barclays,‘Buyingbeatsrentingbyalmost£200,000overalifetime’,pressrelease,18June2012.http://www.personal.barclays.co.uk/BRC1/jsp/brccontrol?site=pfs&task=homefreeopenplanwealth&value=18997
35.B.Appelbaum,‘Familynetworthdropstolevelofearly1990s’,NewYorkTimes,11June2012.http://www.nytimes.com/2012/06/12/business/economy/family-net-worth-drops-to-level-of-early-90s-fed-says.html?_r=2
36.D.BlanchflowerandA.J.Oswald,‘Doeshighhomeownershipimpairthelabourmarket?’,EconomicsDepartmentworkingpaper,UniversityofWarwick,May2013.http://www.andrewoswald.com/docs/finalmayHomeOwnershipUnemBlanchflowerOswald2013.pdf
37.S.Nolan,‘“Anationofestateagents”:propertysectorjobssoarasVinceCablewarnsofdangersofanewhousingbubble’,DailyMail,12September2013.http://www.dailymail.co.uk/news/article-2418402/Property-sector-employment-soars-Vince-Cable-warns-George-Osborne-dangers-new-housing-bubble.html
38.P.Aldrick,‘Estateagenthiringboomhelpsdrivejobsgrowth’,Telegraph,11September2013.http://www.telegraph.co.uk/finance/jobs/10301646/Estate-agent-hiring-boom-helps-drive-jobs-growth.html
39.F.S.Fitzgerald,TalesoftheJazzAge,NewYork:CharlesScribner’sSons,1922.
![Page 1065: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1065.jpg)
http://fitzgerald.narod.ru/crackup/056e-eho.htm
40.OfficeforNationalStatistics,‘Middleincomehouseholds,1977–2011/12’,London:OfficeforNationalStatistics,2December2013.http://www.ons.gov.uk/ons/dcp171776_341133.pdf
41.D.AlexanderandM.Prisk,‘Nextstepsfor£10billionhousingguarantees’,‘GOV.UK’website,1February2013.https://www.gov.uk/government/news/next-steps-for-10-billion-housing-guarantees
42.D.Orr,‘Hometruths2012:England’,NationalHousingFederation,report,22October2012.http://www.housing.org.uk/media/home_truths/home_truths_2012_england.aspx
43.Staffreporter,‘Britishtenants“facehighestrentsinWesternEurope”’,Telegraph,28June2013.http://www.telegraph.co.uk/finance/personal-finance/7858800/British-tenants-face-highest-rents-in-western-Europe.html
44.N.King,‘UKhomeownershipfallstolowestlevelsince1988’,Guardian,16November2012.http://www.guardian.co.uk/money/2012/nov/16/home-ownership-lowest-since-1988
45.LSLPropertyServices,‘RentsreachrecordhighinSeptember’,report,18October2013.http://www.lslps.co.uk/documents/buy_to_let_index_sep13.pdf
46.T.CaveroandP.Krisnah,Acautionarytale:thetruecostofausterityandinequalityinEurope,Oxford:Oxfam,2013.http://policy-
![Page 1066: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1066.jpg)
practice.oxfam.org.uk/publications/a-cautionary-tale-the-true-cost-of-austerity-and-inequality-in-europe-301384
47.LouisBoyson,1931,quotedinW.N.GoetzmannandF.Newman,‘Securitizationinthe1920s’,NationalBureauofEconomicResearchWorkingPaperNo.15650,January2010.http://www.nber.org/papers/w15650
48.D.Harvey,Rebelcities,London:Verso,2012.49.AsIwrite,figuresfromScotlandhaveyetto
bereleased.ForEnglandandWalesseeT.Smith,‘Whatdidthecensusfeedingfrenzytellusabouthousing?’,Guardian,2January2013.http://www.guardian.co.uk/housing-network/2013/jan/02/social-housing-census-data-2011
50.R.Lynch,‘Unemploymentfallswithriseinpart-timeworkers’,Independent,14July2013.http://www.independent.co.uk/news/uk/home-news/unemployment-falls-with-rise-in-parttime-workers-2026252.html
51.K.Gulliver,‘“Allinittogether?”Measuringtheimpactofausterity,housingstrategyandwelfarechangesonvulnerablegroupsinsocialhousing’,HumanCityInstituteBulletinNo.10,March2012.http://www.humancity.org.uk/publications.htm
52.Ibid.53.M.Seamark,‘RaquelRolnik:adabblerin
witchcraftwhoofferedananimalsacrificetoMarx’,DailyMail,12September2013.
![Page 1067: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1067.jpg)
http://www.dailymail.co.uk/news/article-2418204/Raquel-Rolnik-A-dabbler-witchcraft-offered-animal-sacrifice-Marx.html
54.Oxfam,Theperfectstorm.55.OfficeforNationalStatistics,‘Theeffectsof
taxesandbenefitsonhouseholdincome,2011/12’,statisticalbulletin,2013.http://www.ons.gov.uk/ons/dcp171778_317365.pdf
56.B.Mason,‘Britain:children’scharityfindsriskof“socialapartheid”’,‘WorldSocialist’website,9September2013.http://www.wsws.org/en/articles/2013/09/09/pove-s09.html
57.B.Marshall,‘Thehousingeconomy:boom,bustandconsumersentiment’,IpsosMORISocialResearchInstitute,May2012,p.12.http://www.ipsos-mori.com/_emails/sri/understandingsociety/may2012/mobile/no4.htmlAyearaftermakingthestatementaboveBenMarshallrevealedmorepollfindings,suggestingthat‘thefurtheryoutravelawayfromBritain,thebetterBritainlooks’:‘HowdoestheworldviewBritain?’,UnionJack,19January2013,p.1.http://www.unionjacknews.com/articles/how-does-the-world-view-britain/.PartofthereasonBritainlooksbetterfromadistanceisbecause–fromadistance–you’renotpayingtolivehere.
58.Alldetailswereatthis‘FirstSteps’websiteasof8January2013.
![Page 1068: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1068.jpg)
http://www.firststepslondon.org/property-details.asp?PropId=7501
59.D.Binns,‘PeopleonhousingwaitinglistinWalthamForestcannowapplytoliveatOlympicPark’,EppingGuardian,31January2013.http://www.guardian-series.co.uk/news/10198108.People_on_housing_waiting_list_can_now_apply_to_live_at_Olympic_Park/
60.Althoughinhisautumnstatementof2013theChancellorannouncedmeasurestomakesuchcircumventingalittleharderthanithadbeen,butstillnotimpossible.Hereducedtheperiodinwhichyouwereallowedtoclaimahomewasyourmainresidence,evenifyouwererentingitout,toeighteenmonthsafteryoustatedthatyouhadlastlivedinit.Landlordswhoevicteveryyearandclaimtomoveinforamonthbeforerentingoutagainwouldstillbeabletoavoidcapitalgainstaxand,nodoubt,therearelesstroublesomewaysthanthat,butnonethataregoodforthetenants.
61.Eurostat,‘Housingstatistics:datafromOctober2012’,‘EuropeanCommission’website,2012.http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Housing_statistics
62.R.Ramesh,‘CamdenCouncilplanstomove761poorfamiliesfromLondon’,Guardian,13February2013.http://www.guardian.co.uk/uk/2013/feb/13/london-council-relocation-benefits-cap
63.Nowforaslongastwoyearswithnothreatofanyactionbeingtakenbylocalgovernment–seethereferencetotherelevant
![Page 1069: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1069.jpg)
legislation,StatutoryInstrument2625of2012,whichisgiveninChapter4ofthisvolume,p.111above.
64.AssociatedPress,‘Mortgageratesfalltoarecordlow’,NewYorkTimes,4October2012.http://www.nytimes.com/2012/10/05/business/mortgage-rates-fall-to-a-record-low.html
65.D.Orr,‘Hometruths2012’.66.Reuters,‘Homepricesup5.5%fromayear
ago’,NewYorkTimes,29January2013.http://www.nytimes.com/2013/01/30/business/home-prices-up-5-5-from-a-year-ago.html
67.P.Collinson,‘Housepricescreepupover2012’,Guardian,29January2013.http://www.guardian.co.uk/money/2013/jan/29/house-prices-creep-up-2012-land-registry
68.D.Blanchflower,‘Housepricesareboomingagainbutthebustthat’sboundtofollowwillcostusdear:ariseinrateswouldinevitablycauseanimmediateanddeephousepricecrash’,Independent,1September2013.http://www.independent.co.uk/voices/comment/house-prices-are-booming-again-but-the-bust-thats-bound-to-follow-will-cost-us-dear-8793316.html
69.SeequotefromDavid(Danny)Blanchflowerinthesectionbelowtitled‘LendingSlowdown’,p.231.AndalsoA.Monaghan,‘Debtcrisis:UKhousingslumpwilldeepen,warnsIMF’,Telegraph,19July2012.http://www.telegraph.co.uk/finance/financialcrisis/9413200/Debt-
![Page 1070: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1070.jpg)
crisis-UK-housing-slump-will-deepen-warns-IMF.html
70.E.J.LevinandG.Pyce,‘ThedynamicsofspatialinequalityinUKhousingwealth’,DepartmentofUrbanStudiesdiscussionpaper,UniversityofGlasgow,p.19.http://www.academia.edu/775502/The_dynamics_of_spatial_inequality_in_UK_housing_wealth_Housing_Policy_Debate_Vol._21_No._1_January_2011_99-132
71.Seetheleadingquoteatthestartofthesectionimmediatelybelow,‘London’,p.176.
72.LloydsTSBPrivateBanking,‘£34,000extratolivenearEngland’stopstateschools’,pressrelease,10September2012,reportedinawidevarietyofmedia.http://www.propertyreporter.co.uk/view.asp?ID=10154
73.N.O’Brien,‘Anothercountry:London’sseparatenessfromtherestofBritainbecomesmorepronouncedeveryyear’,Spectator,14April2012.http://www.spectator.co.uk/features/7779258/another-country/
74.A.Ashworth,‘IsatectonicshiftmovingNewcastletotheMidlands?’,SundayTimes,15February2013.http://www.thetimes.co.uk/tto/life/property/article3688460.ece
75.J.Mathew,‘UKhousepricesfallinSeptemberamidheatwave’,InternationalBusinessTimes,16September2013.http://www.ibtimes.co.uk/articles/506331/20130916/rightmove-uk-house-price-forecast-london.htm
![Page 1071: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1071.jpg)
76.Althoughwhatthereiscanbeacute,includinghomelessnessinblue-colouredtentcities,butorderedhomelessinacountrywithabouthalftheflatlandofEnglandandmorethantwicethepopulation.
77.J.Waterson,‘Tokyotopscostoflivingtable–butLondonrisestosixteenthplace’,‘CityA.M.’website,5February2013.http://www.cityam.com/latest-news/tokyo-tops-cost-living-table-london-rises-16th-place
78.J.Grainger,‘Superhomes–inaleagueoftheirown’,RiponGazette,12February2013.http://www.ripongazette.co.uk/lifestyle/home-garden/property-news/superhomes-in-a-league-of-their-own-1-5350104
79.B.Wassener,‘BuilderstraveltoAsiatocourtbuyersfornewLondonhomes’,NewYorkTimes,14February2013.http://www.nytimes.com/2013/02/15/greathomesanddestinations/15iht-property15.html
80.D.Dorling,‘Britain’sautumnstatement:thebutterflyeffect?’,Economistblog,7December2013.http://www.dannydorling.org/?page_id=3893
81.Meanwhile,thosepartsofsouthernEuropetendtohaveverylowbirthratesandmightbenefit,inthelongterm,ifthathousingcurrentlyusedbypensionersfromthenorthofEuropeinsteadhousedyoungfamiliesfromfurthersouthandeast,fromjustoutsideofEurope.AsimilarcasecanbemadeforsomuchofthehousingbuiltinIrelandand
![Page 1072: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1072.jpg)
currentlylyingunusedasyoungadultsleavethatislandandthepopulationages.
82.RichardDonnell,quotedinP.Collinson,‘Houseprices:guidetopropertyhotspots’,Guardian,30March2012.http://www.guardian.co.uk/money/2012/mar/30/house-prices-guide-property-hotspots#
83.D.Hipwell,‘OutragegreetsRICS’callforactiontolimithousepriceinflation’,TheTimes,14September2013.http://www.thetimes.co.uk/tto/business/economics/article3868899.ece
84.A.Gentleman,‘Thewomanwholivesinashed:howLondonlandlordsarecashingin’,Guardian,9May2012.http://www.guardian.co.uk/society/2012/may/09/london-landlords-desperate-tenants
85.GeoInformationGroup,‘NewShedBaseMapping’,pressreleasesenttotheauthor,12March2013.http://www.geoinformationgroup.co.uk/uncategorized/new-shed-base-mapping#more-4544
86.No‘outhouse’canbeusedtohousepeoplewithoutthepermissionoftherespectivecouncil.SeeEalingCouncil’sadvice,accessedDecember2013.http://www.ealing.gov.uk/info/100007/housing/1385/illegal_outhouses
87.Staffreporter,‘Bedsinshedsprogrammeuncoversmorethan200suspectedproperties’,SloughObserver,26June2013.http://www.sloughobserver.co.uk/news/roundup/articles/2013/06/26/90679-beds-in-sheds-programme-uncovers-more-than-200-suspected
![Page 1073: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1073.jpg)
88.P.Collins,‘LeaveLondonandyou’llfindfantasyisland’,SundayTimes,15February2013.http://www.thetimes.co.uk/tto/opinion/columnists/philipcollins/article3688788.ece
89.AsIhavestatedpubliclybefore:D.Dorling,‘Letter:Borisisrighttofighthousingcuts’,LondonEveningStandard,1November2010,p.47.http://www.dannydorling.org/?page_id=1927
90.C.Spillane,‘BonuscutsleavelesscashforLondonluxury-homepurchases’,BloombergNews,28February2013.http://www.bloomberg.com/news/2013-02-28/london-luxury-home-cash-purchases-plunge-on-lower-bonus-payments.html
91.AccordingtoLucianCook,DirectorofResidentialResearchatSavills,quotedinB.Barrow,‘Ataleoftwonations:riseinvalueofaLondonflatenoughtobuyahouseinthenorth’,DailyMail,1March2013.http://www.dailymail.co.uk/news/article-2286269/Rise-value-London-flat-buy-house-North.html
92.C.Whitehead,etal.,Housingintransition:understandingthedynamicsoftenurechange,London,ResolutionFoundation,8June2012.
93.A.Harrison,‘Helpelderlydownsizehousing,saysDemos’,BBCNews(EducationandFamily),12September2013.http://www.bbc.co.uk/news/education-24050607
![Page 1074: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1074.jpg)
6SLUMP
1.T.Slater,‘Grievingforalosthome,revisited:the“BedroomTax”anddisplacement’,UniversityofEdinburgh,SchoolofGeosciencesblogentry,23September2013.http://www.geos.ed.ac.uk/homes/tslater/bedroomtax.html
2.A.Morton,‘HowtotackleBritain’sNIMBYsandendcrisisinnewhouse-building’,‘CityA.M.’website,9September2013.http://www.cityam.com/article/1378688019/how-tackle-britain-s-nimbys-and-end-crisis-new-house-building
3.Wecannowfindoutinaninstanthowmuchourpropertyisworthon‘Zoopla’or‘Rightmove’,thetwinoligopoliesoftheonlineUKpropertyworld.Itissurprisingsomanysurveyorsstayinbusiness,giventhese‘tools’.Maybeinthesamewaythattheadventofschoolleaguetablescausedparentstomovetowardstheareaswithsupposedlybetterschools,theseonlinetoolsnowsteerbuyerstowardsareaswheretheythinktheyshouldfitin,areasofthecitywithintheirprecisepricebracket.
4.J.Joyce,‘“Shoeboxhomes”becometheUKnorm’,BBCNews,14September2011.http://www.bbc.co.uk/news/uk-14916580
5.R.Tunstall,‘Whatshouldweworryaboutwhenweworryabouthousingproblems?’,inaugurallecture,UniversityofYork,2012.
![Page 1075: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1075.jpg)
http://www.slideshare.net/djgb500/inaug-slides-final
6.Whichitistokeengardeners,buttheyareaminorityinmanyareas.Youcantellfromthegardens.Manypeopleimaginethattheywillbemoreinterestedingardeningthantheyturnouttobeuponbuyingahomewithagarden.Manyotherswithoutagardenlongforoneandwoulduseitwell.
7.Incaseyouarewonderingaboutthemillion-pluspeoplewhodonotliveinhouseholdsinEnglandandWales.Bedsandbedroomsincommunalestablishments,hallsofresidence,prisons,hospitals,carehomesandhotelsarenotcountedhere.Alltheseratiosareforthe‘householdpopulation’.
8.Thesefiguresareonlyforpeoplelivinginflatsandhousesandarefoundinthe2011censustablesKS101EWandKS403EW:rooms7,425,253;bedrooms,3,647,493;householdresidents3,011,182.
9.Ibid.:rooms126,176,638;bedrooms63,088,319;householdresidents52,059,931.
10.AsProfessorRebeccaTunstallexplainedinherinaugurallectureasthenewDirectorfortheCentreforHousinginYork;seenote5above.
11.Wehavetosay‘appeared’becausethecensusrecordsonlythosepresentinahomeatthetimeitistaken,notthosewhomighthavedecidedtoextendthathome,sellitandmoveon.
![Page 1076: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1076.jpg)
12.D.Dorling,‘Underclass,overclass,rulingclass,supernovaclass’inA.Walker,A.SinfieldandC.Walker(eds.),Fightingpoverty,inequalityandinjustice,Bristol:PovertyPress,2011,Chapter8.http://www.dannydorling.org/?page_id=2446.
13.RedrawnfromD.Dorling,‘FairnessandthechangingfortunesofpeopleinBritain’,JournaloftheRoyalStatisticalSociety(A),Vol.176,No.1(2013),pp.97–128.http://www.dannydorling.org/?page_id=3597
14.R.Tunstall,‘Relativehousinginequality:ThedeclineandreturnofhousingspaceinequalityinEnglandandWales,1911–2011’,personalcommunication(Figure6).
15.Intriguingly,asofSeptember2013,the‘Wikipedia’entryonthisreadsexactlyasifitwereeditedbycivilservants,notbyindependentmembersofthepublic;butitdoesgivethecorrectdatesofintroductionevenifitisalittledisingenuousabout‘underoccupyingtheirhome’(youcanofcourseeditthissource).http://en.wikipedia.org/wiki/Local_Housing_Allowance#Bedroom_Requirement
16.B.Thomas,personalcorrespondencewithBethanThomas,whokindlysuggestedthesereasonsatatimewhenshethoughtshewasnotthinkingclearly,butatleastfarmoreclearlythanme!
17.C,SpillaneandN.Callanan,‘Sultan’staxdiscountonLondonhouseshowslawfavoursrich’,BloombergNews,25October2012;
![Page 1077: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1077.jpg)
alsoreportedintheIndependent.http://www.independent.co.uk/news/uk/home-news/sultans-tax-discount-on-london-house-shows-law-favours-rich-8229543.html
18.Theytendnottooverlapgreatlywiththosewhoseetaxationasthepriceyoupayforcivilization.ThenearestorganizationinBritaintotheTeaPartyistheTaxPayers’Alliance,agroupthatappearstobefundedbyatinynumberofpeoplewhoavidlydislikepayingtaxes.
19.Ramesh,‘Localauthoritiesexpecthalfofpoorresidentstorefusetopaycounciltax’,Guardian,15October2012.http://www.guardian.co.uk/money/2012/oct/15/local-authorities-residents-council-tax[notetheestimateoftwomillioncomesfromdividing£500millionby£5and52weeksinayear].
20.C.Brown,‘Londoncounciltomakeupcounciltaxbenefitloss’,‘InsideHousing’website,1November2012.http://www.insidehousing.co.uk/care/london-council-to-make-up-council-tax-benefit-loss/6524474.article
21.N.Triggle,‘Whatthecaponcarecostsdoesn’tdo’,BBCHealthNews,11February2013.http://www.bbc.co.uk/news/health-21411148
22.G.Morgenson,‘TheBritish,atleast,aregettingtough’,NewYorkTimes,7July2012.http://www.nytimes.com/2012/07/08/business/barclays-
![Page 1078: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1078.jpg)
case-opens-a-window-on-wall-st-fair-game.html
23.J.Waldron,‘Homelessnessandtheissueoffreedom’,UCLALawReview,Vol.39(1991),p.322.http://faculty.washington.edu/pembina/all_articles/Waldron%201991.pdf
24.G.Esler,‘Canlocalsbepersuadedtobacknewhousingintheirarea?’,Newsnight,9January2013.http://www.bbc.co.uk/programmes/b01psky9
25.Itusedtobeaminimum10%discountbutnowsomelocalcouncilshavenodiscounttotrytoreducetheamountofpropertythatisempty,suchasinGwynedd,inWales.Others,suchasCountyDurham,plantoincreasethecounciltaxonsecondandholidayhomessubstantiallytoavoidcutselsewhere.InCamdentheywillsoonbe‘chargingcounciltaxat150%forpropertiesemptyfortwoyearsormore.Intotaltherearemorethan7,000emptyandsecondhomesintheborough.’Source:M.Katz,‘Rebuildthetaxbasetofundservices’,letter,Guardian,13March2013.http://www.guardian.co.uk/money/2013/mar/12/rebuild-tax-base-fund-services
26.G.Eaton,‘LabourwillsoonpledgetoscraptheBedroomTax,saysScottishwelfarespokesman’,NewStatesman,14September2013.http://www.newstatesman.com/politics/2013/09/labour-
![Page 1079: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1079.jpg)
will-soon-pledge-scrap-bedroom-tax-says-scottish-welfare-spokesman
27.FalseEconomy,‘OurresearchintheIndependent:BedroomTax–50,000peoplefaceeviction’,‘FalseEconomy’websiteblog,18September2013.http://falseeconomy.org.uk/blog/our-research-in-the-independent-bedroom-tax-50000-people-face-eviction
28.M.Pennycook,‘Thecoalition’swelfarecutsmeanadramaticriseincounciltaxforthepoorest’,31January2013.http://www.resolution-foundation.org/blog/2013/Jan/31/coalitions-welfare-cuts-mean-dramatic-rise-council/alsopublishedintheNewStatesman.
29.Z.Conway,‘Oneinthree“behindonrent”sincehousingbenefitchanges’,BBCBusinessNews,19September2013.http://www.bbc.co.uk/news/business-24149763
30.Reuters,‘Luxuryhome-builderreportsarevenuegainof41%’,NewYorkTimes,22August2012.http://www.nytimes.com/2012/08/23/business/toll-brothers-reports-revenue-gain-of-41.html
31.AlsoaboardmemberatForbessinceJune2010:http://www.forbes.com/profile/douglas-yearley/
32.BBC,‘Whatisquantitativeeasing?’,BBCBusinessNews,7March2013.
![Page 1080: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1080.jpg)
http://www.bbc.co.uk/news/business-15198789
33.Staffreporter,‘Homepricesinregionstayflat’,LosAngelesTimes,17December2013,p.B1.
34.S.Fleming,‘RecordpropertypricesboostUSconfidence’,TheTimes,31July2013.http://www.thetimes.co.uk/tto/business/industries/construction-property/article3829959.ece
35.G.Topham,‘Helicoptercrash:strictrulesgovernLondonairspace’,Guardian,16January2013.http://www.guardian.co.uk/uk/2013/jan/16/helicopter-crash-strict-rules
36.S.Hamilton,‘RightmoveraisesUKhousepriceforecastaftersummerlull’,BloombergNews,16September2013.http://www.bloomberg.com/news/2013-09-15/rightmove-raises-u-k-house-price-forecast-after-summer-lull.html
37.W.D.Cohen,‘WhyWallStreetloveshousesagain’,Atlantic,19September2013.http://www.theatlantic.com/magazine/archive/2013/10/why-wall-street-loves-houses-again/309454/
38.Ibid.39.A.Hilton,‘Thesuper-richarepushing
workersoutofthecapital’,EveningStandard,4February2013.http://www.standard.co.uk/comment/comment/anthony-hilton-the-superrich-are-pushing-workers-out-of-the-capital-8480115.html
![Page 1081: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1081.jpg)
40.J.KolleweandR.Neate,‘LondonpropertyoffersstableinvestmentforwealthyEuropeans’,Guardian,1June2012.http://www.guardian.co.uk/uk/2012/jun/01/london-property-stable-investment-europeans
41.M.West,‘Capitallosses:theinteractivemapthatshowstheLondonboroughswherehousepricesareactuallyFALLING’,DailyMail,18September2013.http://www.thisismoney.co.uk/money/mortgageshome/article-2423620/The-London-boroughs-house-prices-falling-just-like-rest-country.html
42.M.BrignallandH.Osbourne,‘Londonpropertyboomleavessuper-richscratchingaroundforanewpad’,Guardian,20September2013.http://www.theguardian.com/business/2013/sep/20/london-property-boom-super-prime-market
43.Staffreporter,‘Britain’smostexpensivebeachhutsellsfor£170,000’,Telegraph,18June2012.http://www.telegraph.co.uk/news/newstopics/howaboutthat/9340653/Britains-most-expensive-beach-hut-sells-for-170000.html
44.Goingupinincrementsof£100,000atatime,buthadhisspeechwriterbeenquickerhecouldhavecalleditthe‘J2Opolicy’andaddedsomequipaboutthisparticularbrandofjuicebeinggoodforyou.
45.D.Dorling,‘CounciltaxAtoZ’,letter,LondonEveningStandard,24September
![Page 1082: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1082.jpg)
2012.http://www.yppuk.org/2012/09/readers-letter-of-day.html
46.R.WilkinsonandK.Pickett,Thespiritlevel:whyequalityisbetterforeveryone,London:Penguin,2010.
47.N.Nowatzki,‘Wealthinequalityandhealth:apoliticaleconomyperspective’,InternationalJournalofHealthServices,Vol.42,No.3(2012),pp.403–24.
48.T.ShipmanandJ.Salmon,‘MortgagesfromtheBankofNanandGranddad:NickCleggrevealsplanforpensionpotstohelpyoungergenerationgetonthefirstrungofthehousingladder’,DailyMail,23September2012,storyupdated24September.http://www.dailymail.co.uk/news/article-2207367/Lib-Dem-conference-Nick-Clegg-reveals-plan-pension-pots-help-younger-generation-rung-housing-ladder.htm
49.S.Hughes,‘Handsoffourhomes:fromLondontotheLakeDistrict,thewealthyarebuyingpropertiestheyrarelyuse.Councilsneedpowerstopreventthis’,Guardian,24September2012.http://www.guardian.co.uk/commentisfree/2012/sep/24/homes-for-living-in
50.A.HullandG.Cooke,‘Togetherathome:anewstrategyforhousing’,InstituteforPublicPolicyResearch,report,21June2012,p.2.http://www.ippr.org/publication/55/9279/together-at-home-a-new-strategy-for-housing
![Page 1083: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1083.jpg)
51.EstateOffice,‘Newtaxbreakforoverseaspropertyinvestors’,‘LondonPropertyConsultants’website,21January2013.http://www.estate-office.com/news/new-tax-break-for-overseas-uk-property-investors-254.htm
52.S.Jenkins,‘ThedetailofEdMiliband’smansiontaxisdaft’,Guardian,15February2013.http://www.guardian.co.uk/commentisfree/2013/feb/15/ed-miliband-mansion-tax
53.SimonWood,RupertFastandNicoleSochor,letters,Telegraph,20February2013.http://www.telegraph.co.uk/comment/letters/9881083/Ed-Milibands-mansion-tax-policy-threatens-Britains-historic-homes.html.
54.P.Krugman,Thereturnofdepressioneconomicsandthecrisisof2008,London:Penguin,2008,p.171.
55.BethanThomasandIwereoriginallyquotedhigherfiguresthanthese,butovertimethepricesdrop.http://data.gov.uk/forum/general-discussion/property-price-paid-data-for-£50k
56.E.Hammond,J.K.AllenandC.Jones,‘LondonfuelsrecordgrowthinUKhouseprices’,FinancialTimes,17September2013.http://www.ft.com/cms/s/0/0d15ebae-1f8f-11e3-8861-00144feab7de.html
57.NewYorkTimesNewsService,‘London’sfinancialcenterahubtoscandaloflate’,‘TheLedger’website,13July2012.
![Page 1084: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1084.jpg)
http://www.theledger.com/article/20120713/NEWS/120719712?p=1&tc=pg
58.‘AheatwavecausedhousepricestotumbleinSeptemberasbuyersandsellersweredistractedfromthehousingmarketbytheweather,accordingtopropertywebsite“Rightmove”.’I.Silvera,‘Rentssoartoeleven-yearhighdespitehouse-pricedip’,InternationalBusinessTimes,23September2013.http://www.ibtimes.co.uk/articles/508315/20130923/house-prices-rents-buy-mortgage-london-barnard.htm
59.ITN,‘Morepeoplestrugglingtopayrentasarrearsgrow’,ITVNews,18January2013.http://www.itv.com/news/update/2013-01-18/more-people-struggling-to-pay-rent-as-arrears-grow/
60.ITN,‘BedroomTaxblamedforforcingfamiliesintoarrears’,ITVNews,19September2013.http://www.itv.com/news/central/update/2013-09-19/bedroom-tax-forcing-families-into-rent-arrears/
61.AccordingtoLSLPropertyServices,betterknownthroughitssubsidiaries:severalcharteredsurveyorbusinesses;andtheestateagentsYourMoveandReedsRains.Thereportwaspublishedinnumerousplaces,includingon17Februaryathttp://www.mortgagestrategy.co.uk/housing-market/rents-rise-in-january-for-first-
![Page 1085: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1085.jpg)
time/1046371.article.Perhapsbycompletecoincidencethesamecompanyreporteda6.3%riseinLondonhousingpricesjustoversixmonthslater.http://www.ftadviser.com/2013/09/04/mortgages/mortgage-data/ftb-market-is-bubbling-nicely-lsl-property-ulTofnIX54WPSeQ41HEwYM/article.html
62.D.Newman,‘Tenantsfeelthefestivepinchdespiterentalreprieve’,LSLPropertyServices,report,18January2013.http://www.lslps.co.uk/documents/buy_to_let_index_dec12.pdf
63.D.Harvey,Rebelcities,London:Verso,2012,p.32.
64.Staffreporter,‘Businessthisweek’,Economist,9February2013.http://www.economist.com/news/world-week/21571489-business-week
65.D.Leigh,H.FraymanandJ.Ball,‘Revealed:therealidentitiesbehindBritain’ssecretpropertydeals’,Guardian,26November2012.http://www.guardian.co.uk/uk/2012/nov/26/indentities-behind-secret-property-deals
66.Hehasmadethispredictionmanytimes;in2013itwasfirstreportedinS.O’ConnorandC.Giles,‘Housepricesseenasstilltoohigh’,FinancialTimes,1January2013.http://www.ft.com/cms/s/0/416dca4c-5407-11e2-bb50-00144feab49a.html#axzz2LrMKpj2l
![Page 1086: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1086.jpg)
67.D.Bowie,‘Tacklingsqualour:thepivotalroleofsocialhousing’,Class:CentreforLabourandSocialStudies,policypaper,2013.http://classonline.org.uk/pubs/item/tackling-squalor
68.D.Dorling,Population10billion,London:Constable,2013.
69.BankofEngland,‘Trendsinlending:seasonallyadjustednetofcancellations’,January2013.http://www.bankofengland.co.uk/publications/Documents/other/monetary/trendsjanuary13.pdf
70.M.Chadbourn,‘USmortgage-lendingup38%,racialdisparitiespersist’,Reuters,18September2013.http://www.reuters.com/article/2013/09/18/us-usa-housing-idUSBRE9880X120130918
71.ThesourceofthefiguresusedhereistheFederalReservespreadsheet‘D.2:creditmarketborrowing’,foundat:www.federalreserve.gov/releases/Z1/Current/,latestfiguresJanuary2013.
72.OnhowthelatestfiguresreleasedbytheFederalReservecomparewithwhatitknewin2009orhowmuchborrowingwastakenoutin2006,comparetheirlatestestimatesof2006withthoseusedinFigure23,p.293,ofD.Dorling,Injustice:whysocialinequalitypersists,Bristol:PolicyPress,2010.
73.Staffreporter,‘NewHampshirehasthethird-highestpropertytaxinthecountry’,NewHampshireTelegraph,23July2012.http://www.politifact.com/new-
![Page 1087: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1087.jpg)
hampshire/statements/2012/jul/23/jackie-cilley/no-income-or-sales-tax-new-hampshire-does-rely-hea/
7SPECULATION
1.S.Hamilton,‘RightmoveraisesUKhousepriceforecastaftersummerlull’,BloombergNews,16September2013.http://www.bloomberg.com/news/2013-09-15/rightmove-raises-u-k-house-price-forecast-after-summer-lull.html
2.TwentyyearslaterIpublishedsomeofthosemapsinD.Dorling,Thevisualizationofsocialspatialstructure,Chichester:Wiley,2012.Ifyouareinterestedinwhattheanatomyofacrashlookslike,see:http://www.dannydorling.org/books/visualisation/Homepage.htmlandseeFigures5.12and5.13here:http://www.dannydorling.org/books/visualisation/Graphics/Pages/Figures.html
3.R.Neate,‘Rightmovetriplesitsestimateforhousingpricerises’,Guardian,16September2013.http://www.theguardian.com/politics/2013/sep/16/rightmove-triples-estimate-house-price-increase
4.K.Allen,‘Housepricescouldriseby8%nextyear,saysRightmove’,Guardian,16December2013.
5.A.Raval,‘PaceofUShousepricerisesslowsasmortgageratesclimb’,FinancialTimes,24September2013.http://www.ft.com/cms/s/0/9ade322a-251b-
![Page 1088: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1088.jpg)
11e3-9b22-00144feab7de.html#axzz2ftukXFmB
6.BBC,‘UShousepricesinbiggestannualriseforsevenyears’,BBCBusinessNews,24September2013.http://www.bbc.co.uk/news/business-24225746
7.A.Khouri,‘Homepricesinregionstayflat’,LosAngelesTimes,p.B1,17December2013.
8.D.Graeber,Debt:thefirst5,000years,NewYork:MelvilleHousePublishing,2013edition.
9.Shelter,‘1.4millionBritonsfallingbehindwiththerentormortgage’,pressrelease,4January2013.http://england.shelter.org.uk/news/january_2013/1.4_million_britons_falling_behind_with_the_rent_or_mortgage
10.L.Jansen,‘BritainwillbeThirdWorldeconomyby2014’,CNBCNews,reportingonLarryElliottandDanAtkinson’sGoingsouth:whyBritainwillhaveaThirdWorldeconomyby2014,London:PalgraveMacmillan,2012.http://www.cnbc.com/id/49568596/Britain_Will_Be_Third_World_Economy_by_2014_Authors
11.R.BurrowsandJ.Ford,‘Self-employmentandhomeownershipaftertheenterpriseculture’,Work,EmploymentandSociety,Vol.12,No.1(1998),pp.97–119;andJ.Ford,‘Casualworkandowneroccupation’,Work,EmploymentandSociety,Vol.3,No.1(1989),pp.29–48.
12.KenLivingston,formerMayorofLondon,quotedbyO.Wright,‘Angerontheleft:
![Page 1089: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1089.jpg)
anxiousLabourmainstreammovestodistanceitselffromhardliners’celebrationsafterMargaretThatcher’sdeath’,Independent,9April2013.http://www.independent.co.uk/news/uk/politics/anger-on-the-left-anxious-labour-mainstream-moves-to-distance-itself-from-hardliners-celebrations-after-margaret-thatchers-death-8565095.html
13.ThiswaswhenIwasunderthesupervisionofTonyChampionandhiscolleagues.Tonykindlyagreedtocommentonanearlierdraftofthisbook.Ihadlastworkedwithhimovertwodecadesearlier.Onsomeofthatearlierwork,see:D.DorlingandJ.Cornford,‘Thedistributionofnegativeequityin1993’,reporttotheLordsCommissionersofH.M.Treasury;laterpublished(withhelpfromChrisGentle)asC.Gentle,D.DorlingandJ.Cornford,‘Negativeequityin1990sBritain’,UrbanStudies,Vol.31,No.2(1994),pp.181–99.
14.BankofEngland,Trendsinlending,January2013,London:BankofEngland,2013.http://www.bankofengland.co.uk/publications/Documents/other/monetary/trendsjanuary13.pdf
15.L.Howard,‘Daysarenumberedforinterest-onlymortgages’,‘Moneysupermarket.com’websiteblog,30November2012.http://www.moneysupermarket.com/c/news/days-are-numbered-for-interest-only-mortgages/0015487/
![Page 1090: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1090.jpg)
16.PressAssociation,‘WestBromwichBuildingSocietyhits“buy-to-let”borrowerswith2%ratehike’,DundeeCourier,23September2013.http://www.thecourier.co.uk/business/news/west-bromwich-building-society-hits-buy-to-let-borrowers-with-?2?-rate-hike-?1.134093
17.Shelter,‘1.4millionBritonsfallingbehindwiththerentormortgage’.
18.FromtheHousingRightsServiceinNorthernIreland,wherenegativeequityisworse:UTV,‘Homerepossessionsatcriticallevel’,webvideoreport,19February2013.http://www.u.tv/News/NI-home-repossessions-at-critical-level/ElsewhereintheUKtheratesofrepossessionweregoingdownatthesametime,butthatmaybetemporary.
19.Andasexplainedinmoredetailinthe‘HomeTruths’sectioninChapter3ofthisvolume,p.68.
20.StatisticBrain,‘Homeforeclosuresstatistics’.http://www.statisticbrain.com/home-foreclosure-statistics/RelyinginturnondatareleasedbyRealtyTrac,theFederalReserveandEquifax,15October2012.
21.Shelter,‘Evictionriskhotspotsrevealed’,pressrelease,14December2012.http://england.shelter.org.uk/news/previous_years/2012/december_2012/eviction_risk_hotspots_revealed
22.G.Lamarca,‘ResistingevictionsSpanishstyle’,NewInternationalist,April2013.
![Page 1091: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1091.jpg)
http://newint.org/features/2013/04/01/sparks-from-the-spanish-crucible/
23.Mysourcewishestoremainanonymousbecausefinancialandhousinganalystswithingovernmentanditsnumerousagenciesliveinfearofbeingseenasresponsibleforsparkingacrash.Asaresulttheyissuenoseriouswarnings,andthepotentialbonfireofhopes,dreamsandunsustainablelendingmodelsgrowslarger.
24.R.Kitchin,etal.,‘Placingneoliberalism:theriseandfallofIreland’sCelticTiger’,EnvironmentandPlanning(A),Vol.44(2012),pp.1,302–26.
25.J.CurrieandE.Tekin,‘Istherealinkbetweenforeclosureandhealth?’,NationalBureauofEconomicResearchWorkingPaperNo.17310,2011.http://ideas.repec.org/p/nbr/nberwo/17310.html
26.Anonymouspersonalcommunication,2013:fromtheseniorpublichealthanalystwhohadbeenhighlightingthefigures,allofwhichareinthepublicdomain.InJuly2013theHealthServiceJournalpostedthereporthere:http://www.hsj.co.uk/Journals/2013/07/23/u/j/e/Weekly-and-monthly-provisional-figures-on-deaths-registered-in-England-and-Wales--16?th-July.doc.
27.PublicHealthEngland,‘Excesswintermortality2012–13’,15August2013.https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/229819/Excess_winter_mortality_2012.pdf
![Page 1092: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1092.jpg)
28.‘PHE[PublicHealthEngland]hasalsopublishedaletterfromitschiefknowledgeofficeraboutthedecisiontostoptheweeklyreportswhichhighlightedtheissue.’A.McLellan,‘PHEpublishesreportonexcesswinterdeaths’,HealthServiceJournal,15August2013.http://www.hsj.co.uk/news/hsj-live/hsj-live-?150813?-phe-publishes-report-on-excess-winter-deaths/5062297.article#.Uj1fStIqjzY.Then,inwhatwasdescribedasaunrelateddevelopment,OfficeforNationalStatisticssuggestednotproducingtheweeklyseriesatalltosavebetween£10,000and£50,000ayearincosts.http://www.ons.gov.uk/ons/about-ons/get-involved/consultations/consultations/statistical-products-2013/index.html
29.D.StucklerandM.McKee,‘Whyaredeathratesrisinginpeopleagedovereighty-five?’,‘BetterHealthforAll’websiteblogoftheFacultyofPublicHealth,23August2013.http://betterhealthforall.org/2013/08/23/why-are-death-rates-rising-in-people-aged-over-85/
30.TheUKwasoneofonlytwocountriesreportingthelowestleveloffluintensityduringthe2012/13seasonacrossallofEurope.ThismakesthesuggestionthattherisingmortalityintheUKisduetofluverydubious:EuropeanCentreforDiseasePreventionandControl,‘InfluenzainEurope:
![Page 1093: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1093.jpg)
season2012/13’,2013.http://ecdc.europa.eu/en/healthtopics/seasonal_influenza/PublishingImages/influenza-europe-weekly-infographic.jpg
31.InstituteofFinancialAccountants,‘Lifeexpectancyatretirementfallsformenandwomen’,‘ProfessionalAdviser(IFA)’website,quotingRichardWillets,6November2013.http://www.ifaonline.co.uk/ifaonline/news/2305397/life-expectancy-at-retirement-falls-for-men-and-women.Seealso:http://www.ons.gov.uk/ons/rel/subnational-health2/excess-winter-mortality-in-england-and-wales/2012-13--provisional--and-2011-12-final-/stb-ewm-12-13.html#tab-Final-EWM-in-2011-12-by-underlying-cause-of-death
32.D.Dorling,‘Inplaceoffear:narrowinghealthinequalities’,thinkpiece,CLASS:CentreforLabourandSocialStudies,21May2013.http://www.dannydorling.org/?page_id=3711
33.S-SChange,etal.,‘Wastheeconomiccrisis1997–1998responsibleforrisingsuicideratesinEast/South-eastAsia?Atime-trendanalysisforJapan,HongKong,SouthKorea,Taiwan,SingaporeandThailand’,SocialScienceandMedicine,Vol.68,No.7(2009),pp.1,322–31.
34.D.Stuckler,etal.,‘BankingcrisesandmortalityduringtheGreatDepression:evidencefromUSurbanpopulations,1927–
![Page 1094: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1094.jpg)
1939’,JournalofEpidemiologyandCommunityHealth,publishedonline24March2011.doi:10.1136/jech.2010.121376.D.Stuckler,etal.,‘Effectsofthe2008recessiononhealth:afirstlookatEuropeandata’,Lancet,9July2011online:378(9786):124–5.doi:10.1016/S0140-6736(11)61079-9.
35.S.Burgen,‘Spanishhelplinereportsriseinnumberofcallersconsideringsuicide’,Guardian,5September2013.http://www.theguardian.com/world/2013/sep/05/spanish-helpline-rise-callers-considering-suicide
36.A.Deaton,‘What’swrongwithinequality?ReviewofJosephStiglitz,Thepriceofinequality’,Lancet,Vol.381,No.9,864(2February2013),p.362.http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(13)60154-3/fulltext
37.InstituteofHealthMedicine,UShealthininternationalperspective:shorterlives,poorerhealth,Washington:NationalAcademyofSciences,2013.http://www.iom.edu/Reports/2013/US-Health-in-International-Perspective-Shorter-Lives-Poorer-Health.aspx
38.Ibid.,p.5.39.Onevictionssee:Neoskosmos,‘Greece
passeslawtohelpdebt-strickenhouseholds’,report,3August2010.http://neoskosmos.com/news/en/Greece-debt-relief-bill-papandreau-katseli.Andalsosee:
![Page 1095: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1095.jpg)
http://www.protothema.gr/economy/article/?aid=75847(inGreekbutcanbeautomaticallytranslated).
40.ProfessorTomokiNakaya,RismumeikanUniversity,Kyoto,Japan,personalcommunication,22December2013.SeealsoZ.Ward,‘GoodnewsforrentersinJapan:securitydeposits,keymoneyonthedemise’,JapanToday,30March2012.http://www.japantoday.com/category/opinions/view/good-news-for-renters-in-japan-security-deposits-key-money-on-the-demise
41.M.B.Veléz,‘Banksandtheracialpatterningofhomicide:astudyofChicagoneighborhoods’,InternationalJournalofConflictandViolence,Vol.3,No.2(2009),pp.154–71.http://www.ijcv.org/index.php/ijcv/article/viewArticle/3
42.D.StucklerandS.Basu,Thebodyeconomic:whyausteritykills,London:AllenLane,2013.
43.OfficeforNationalStatistics,‘Generallifestylesurvey’,2013.SeeTable7.1,‘Self-perceptionofgeneralhealthNo.1:2005to2011’.http://www.ons.gov.uk/ons/rel/ghs/general-lifestyle-survey/2011/index.html
44.See:http://www.property118.com/help-us-to-protect-your-tracker-margins/43709/,asaccessed26September2013.
45.C.Savage,‘WellsFargowillsettlemortgagebiascharges’,NewYorkTimes,12July2012.
![Page 1096: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1096.jpg)
http://www.nytimes.com/2012/07/13/business/wells-fargo-to-settle-mortgage-discrimination-charges.html
46.G.Hiscott,‘Barclaystorefund300,000customersafterblunder’,DailyMirror,17September2013.http://www.mirror.co.uk/money/city-news/barclays-refund-300000-customers-after-2280151#ixzz2fX6xT1xl
47.Inthesection‘Recentinequality’,pp.24–6,S.Saulny,‘Whenlivinginlimboavoidslivingonthestreet’,NewYorkTimes,3March2012.http://www.nytimes.com/2012/03/04/us/when-living-in-limbo-avoids-living-on-the-street.html?ref=us&_r=1&
48.MortgagecompaniesarethefinancialservicesequivalentoftheNeutronBomb,thatatomicweapondesignedtoremovepeoplebutleavethepropertytheylivedinstandingtobereused.
49.S.Morris,‘Vulnerablepeoplefacingevictionaftercouncilcutssupportforhostelresidents’,Guardian,25September2013.http://www.theguardian.com/society/2013/sep/25/vulnerable-people-facing-eviction-bristol-hostels
50.J.Waldron,‘Homelessnessandtheissueoffreedom’,UCLALawReview,Vol.39(1991),pp.295–324.http://faculty.washington.edu/pembina/all_articles/Waldron%201991.pdf
51.QuotedinS.Saulny,‘whenlivinginlimbo’.Noteaswellthat,asthelargestlender,Wells
![Page 1097: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1097.jpg)
FargoisalsothelargestUSbankwhenallarerankedbymarketcapitalization.
52.‘Bob’,commentinresponsetoabovestorybySaulny,4March2012,Boonsboro.
53.Ifyouareinterestedinthatera,theresultingpaperscanbefoundonthewebifyousearchfortheirtitles:D.Dorling,‘ThenegativeequitymapofBritain’,Area,Vol.26,No.4(1994),pp.327–42;D.DorlingandJ.Cornford,‘Whohasnegativeequity?Howhouse-pricefallsinBritainhavehitdifferentgroupsofbuyers’,HousingStudies,Vol.10,No.2(1995),pp.151–78;C.Pattie,D.DorlingandR.Johnston,‘Adebt-owningdemocracy:thepoliticalimpactofhousingmarketrecessionattheBritishgeneralelectionof1992’,UrbanStudies,Vol.32,No.8(1995),pp.1,293–315;G.DaveySmithandD.Dorling,‘I’mallright,John:votingpatternsandmortalityinEnglandandWales,1981–92’,BritishMedicalJournal,Vol.313(1996),pp.1573–7.
54.A.Hill,‘Trapped:theformercoupleswhocan’taffordtomoveon’,Guardian,20November2012.http://www.guardian.co.uk/society/2012/nov/20/trapped-couples-partners-relationships
55.R.Whelan,‘Negativeequitymorewidespreadthanpreviouslythought,reportsays’,WallStreetJournal,24May2012.http://blogs.wsj.com/developments/2012/05/24/negative-
![Page 1098: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1098.jpg)
equity-more-widespread-than-previously-thought-report-says/
56.J.Christie,‘Californiacitybacksplantoseizenegativeequitymortgages’,Reuters,11September2013.http://www.reuters.com/article/2013/09/11/us-richmond-eminentdomain-idUSBRE98A0FN20130911
57.G.Morgenson,‘Howtofindweedsinamortgagepool’,NewYorkTimes,8September2012.http://www.nytimes.com/2012/09/09/business/how-to-find-weeds-in-a-mortgage-pool-fair-game.html
58.Thesagaisongoing:‘ResCapislikelytoenditsbankruptcythismonthafterwinningcourtapprovalofaliquidationplanthatresolvesmorethan$100billioninpotentiallawsuits.’SeeC.DolmetschandC.Smythe,‘ResCapaffiliatesuesUBS,SunTrustovermortgagesecurities’,BloombergBusinessWeek,17December2013.http://www.businessweek.com/news/2013-12-17/rescap-affiliate-sues-ubs-suntrust-over-mortgage-securities-1
59.OfficeforNationalStatistics,‘Consumerpriceinflation,August2013’,pressrelease,17September2013.http://www.ons.gov.uk/ons/rel/cpi/consumer-price-indices/august-2013/index.html
60.R.Kitchin,S.O’Callaghan,S.andJ.Gleeson,‘UnfinishedestatesinPost-CelticTiger
![Page 1099: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1099.jpg)
Ireland’,NorthernIrelandStatisticsandResearchAgencyWorkingPaperNo.67,2012,p.10.http://ebookbrowse.com/nirsa-working-paper-?67?-unfinished-estates-in-post-celtic-tiger-ireland-pdf-d312024595
61.D.Coleman,‘IrelandpreparestosaybyebyetoTroikaasFinanceMinisterMichaelNoonanwarns:thismustneverhappenagain’,IrishMirror,13December2013.http://www.irishmirror.ie/news/irish-news/politics/country-exits-troika-rule-finance-2924434
62.S.Castle,‘Irelandseekseasingofitsdebtterms’,NewYorkTimes,1March2013.http://www.nytimes.com/2013/03/02/business/global/ireland-seeks-easing-of-its-debt-terms.html
63.Staffreporter,‘Bargainhunterssplashout€13.7millionatpropertyauction’,IrishIndependent,2March2013.http://www.independent.ie/irish-news/bargain-hunters-splash-out-137m-at-property-auction-29104233.html#
64.T.O’Brien,‘NAMAoffers4,000homesforsocialhousing’,IrishTimes,18September2013.http://www.irishtimes.com/news/ireland/irish-news/nama-offers-4-000-homes-for-social-housing-1.1531855
65.D.O’Donovan,‘NAMAsaleof10,000apartmentstoshakeupthehousingmarket’,IrishIndependent,26September2013.http://www.independent.ie/irish-news/nama-
![Page 1100: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1100.jpg)
sale-of-10000-apartments-to-shake-up-the-housing-market-29611569.html
66.D.O’Donovan,‘FocusIrelandrejectedofferofproperties,revealsNAMA’,IrishIndependent,1December2013.http://www.independent.ie/business/irish/focus-ireland-rejected-offer-of-properties-reveals-nama-29798406.html
67.Whichcontinues:‘First,intheplacewherewelive,withtheknowledgethatwe’resurroundedbycapitalismeverywhere;andlater,inAndalusia,andtheworld.’See:Anticap,‘Protestoftheday’,20August2012.http://anticap.wordpress.com/2012/08/20/protest-of-the-day-142/
68.Staffreporter,‘Greekhousingmarketremainsextremelydepressed’,UnitedPressInternational,14September2013.http://www.upi.com/Business_News/2013/09/14/Greek-housing-market-remains-extremely-depressed/UPI-20891379183674/
69.Nigentesincasa,nicasassingente.D.Stelfox,‘HowtheCorralamovementisoccupyingSpain’,Guardian,4March2013.http://www.guardian.co.uk/world/2013/mar/04/corrala-movement-occupying-spain
70.A.Fotheringham,‘InSpain’sheart,aslumtoshameEurope’,Independent,27November2011.http://www.independent.co.uk/news/world/europe/in-spains-heart-a-slum-to-shame-europe-6268652.html
![Page 1101: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1101.jpg)
71.J.Christie,‘Californiacitybacksplantoseizenegativeequitymortgages’.
72.Referredtointhesectiononheathandevictionabove;seenote39onthereportbyNeoskosmos.
73.DepartmentforCommunitiesandLocalGovernment,‘Streamlininginformationrequirementsforplanningapplications’,pressrelease,27December2012.https://www.gov.uk/government/consultations/streamlining-information-requirements-for-planning-applications
74.L.Hanley,‘Livinginlimbounderfailedhousingrenewalplans’,Guardian,21September2012.http://www.guardian.co.uk/commentisfree/2012/sep/21/housing-renewal-plans-fail-living-limbo
75.ItwasDemocraticUnionistPartyministerNelsonMcCauslandwhostalledonimplementation.Ifyouareinterestedinwhy,havealookatthe22June2013entryofhisblog,whereheappearsmoreinterestedinparadingpastCatholicchurchesthanhousing:http://theministerspen.blogspot.co.uk/
76.SeeD.Dorling,‘Housingandidentity:howplacemakesrace’,BetterHousingBriefingPaperNo.17,RaceEqualityFoundation,March2011.http://www.better-housing.org.uk/briefings/housing-and-identity-how-place-makes-race;andespeciallyifyouareinterestedintheargumentsforhowsuchplanswouldreduce
![Page 1102: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1102.jpg)
racisminhousing.IfirstdebatedthiswhengivingtheLordPittMemorialLectureontheseproposalsinMarch2011asthecrisiswasdeepeninganditwasbecomingclearthatnon-whiteLondonerswerebeingproportionatelymoredisadvantaged.See:http://www.raceequalityfoundation.org.uk/training/events/lord-pitt-memorial-lecture-how-place-makes-race
77.C.Shephard,personalcommunication,Sheffield,2013.
78.Whenitwascutbyafurther10%,andsowasabletohelpfewerpeoplethantheyearbefore,despitethedemandformoneyadviceandhousingadvicegrowing:CitizensAdviceBureau,‘CutsinCABfundingleavingthousandswithnowheretoturnforhelp’,6September2011.http://www.citizensadvice.org.uk/index/pressoffice/press_index/press_20110906.htm
79.A.HullandG.Cooke,‘Togetherathome:anewstrategyforhousing’,InstituteforPublicPolicyResearch,report,21June2012,p.53.http://www.ippr.org/publication/55/9279/together-at-home-a-new-strategy-for-housing
80.D.Garvie,‘Areturntorevolving-doorhomelessness?’,‘Shelter’websitepolicyblog,9November2012.http://blog.shelter.org.uk/2012/11/a-return-to-revolving-door-homelessness/
81.DepartmentforCommunitiesandLocalGovernment,AplainEnglishguidetotheLocalismAct,London:DepartmentforCommunitiesandLocalGovernment,
![Page 1103: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1103.jpg)
November2011.https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/5959/1896534.pdf
82.C.Brown,‘PMconfirmsagelimitplanforhousingbenefit’,‘InsideHousing’website,10October2012.http://www.insidehousing.co.uk/ihstory.aspx?storycode=6524142
83.J.Waldron,‘Homelessnessandtheissueoffreedom’,p.313,quotingfrom‘Doorsclosingasmoodonthehomelesssours’,NewYorkTimes,18November1989.
84.Shelter,‘Oneinfourisjustapaychequeawayfromhomelessness’,pressrelease,18December2012.http://scotlandshelter.org.uk/news/december_2012/one_in_four_are_just_a_pay_check_away_from_homelessness
85.K.Mercer,‘HomelessWestminsterfamiliesinfour-starhotels’,BBCNews,7February2013.http://www.bbc.co.uk/news/uk-england-london-21362391
86.Inotherwordsitisbasedonwhattherentsfortheveryworsthousinginanareatendtobeandnotonthemedianhome,andupratingwillnotincludethehousingelementofinflation!C.Shephard,personalcommunication,Sheffield,2013.
87.Fordetailsseehttp://www.socialfinance.org.uk/andclick‘Aboutus’tofindoutwhichhedgefundmanagersareboardmembers.Ihavetoadmitheretobeingsuspicious.Itmaybebecauseabusinessmodelisbeingusedthatsuchexactfiguresareincludedinthe‘SocialFinance’
![Page 1104: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1104.jpg)
website.Thenumber5,678estimateforpeoplesleepingroughjustquoteddoeslooklikesomeonetappingconsecutivekeysonthekeyboard,anditishardtogetatthemethodology.
88.Itisnotclearhowmanyindividualroughsleepershavetobecometenantsforproviderstoberewarded,forhowlongtheywillhavetoremaintenants,orwhatqualityofhometheyshouldlivein.
89.SocialFinance,‘ImprovingoutcomesforLondon’shomeless’,report,accessed29January2013.http://www.socialfinance.org.uk/homelessnessHowever,asofSeptember2013,thatreporthasbeenremovedfromtheirwebsite.Asfortheorganizationitself,TobyEccles,itsDevelopmentDirector,claimsthatitis‘interestedinaligningthesocialwiththefinancialratherthanfindingacleverwheezeformakingmoney.Weareincentivizedtoworkwiththecomplicatedandwiththosewillingtochange.’A.Travis,‘Willsocialimpactbondssolvesociety’smostintractableproblems?’,Guardian,6October2010.http://www.guardian.co.uk/society/2010/oct/06/social-impact-bonds-intractable-societal-problems.Scepticsremainunconvinced.
90.B.Thomas,‘Homelessnesskills:ananalysisofthemortalityofhomelesspeopleinearlytwenty-firstcenturyEngland’,Crisis,report,2012.http://www.crisis.org.uk/publications-
![Page 1105: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1105.jpg)
search.php?fullitem=371orat:http://sasi.group.shef.ac.uk/publications/reports/Crisis_2012.pdf
91.E.Drabble,‘Shouldwebuildmorehomes?’,Shelter,GuardianTeacherNetwork,13December2012.http://teachers.guardian.co.uk/teacher-resources/11697/Should-we-build-more-homes-By-Shelter
92.DepartmentforCommunitiesandLocalGovernment,‘MarkPriskchallengescouncilstofindstablehomesforfamilies’,pressrelease,7June2013.https://www.gov.uk/government/news/mark-prisk-challenges-councils-to-find-stable-homes-for-families
93.MotherofthreequotedinR.Ramesh,‘IllegaluseofB&Bstohousehomelesssoarsby800%’,Guardian,18February2013.http://www.guardian.co.uk/society/2013/feb/18/illegal-use-bandbs-house-homeless
94.Staffreporter,‘HalfofallhomelessfamiliesforcedtoliveinbedandbreakfastsareinLondon’,EveningStandard,5September2013.http://www.standard.co.uk/news/london/half-of-all-homeless-families-forced-to-live-in-bed-and-breakfasts-are-in-london-8800303.html
95.BBC,‘Newrightsforthehomelesscomeintoforce’,BBCScotlandPolitics,30December2012.http://www.bbc.co.uk/news/uk-scotland-scotland-politics-20870160
![Page 1106: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1106.jpg)
96.Staffwriters,‘NumberoffamilieslivinginB&Bsatten-yearhighinEngland’,‘Ekklesia’website,19September2013.http://www.ekklesia.co.uk/node/19086
97.L.Barker,‘Homelessbound?HomelessnessinLondon,thesouth-eastandeastofEngland’,NationalHousingFederation,report,13November2012,p.7.http://www.housing.org.uk/publications/find_a_publication/general/homeless_bound.aspx
98.DetailsonPickles’sdepartmentalwebpagesandalsotobefoundatChinditsHouse,ChinditsLane,Brentwood,EssexCM145LF.http://www.foyer.net/level3.asp?level3id=71
99.Formoredetailsofthisstory,searcharoundonthewebalittleusingEricPickles’snameandsee:http://www.brentwoodweeklynews.co.uk/news/9965532.Homeless_shelter_evacuated_after_chemical_scare/?ref=rss
100.E.Drabble,‘Shouldwebuildmorehomes?’.101.T.ChampionandJ.Goddard,‘The
containmentofurbanEngland’,chapterinaforthcomingbookcelebratingthelifeandworkofPeterHall,personalcorrespondence.
102.ForrealambitioninBritain,considerwhathasbeenachievedbytheLowImpactLivingAffordableCommunity(LILAC)inLeeds,wherethefirstresidentswhodesignedtheirownnewgreenhousingmovedinduringspring2013.http://www.lilac.coop/,butseealsop.302.
103.S.Rose,‘Squattersarenothomestealers’,Guardian,3December2012.
![Page 1107: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1107.jpg)
http://www.guardian.co.uk/society/2012/dec/03/squatters-criminalised-not-home-stealers
104.H.Wilcox,‘Criminalizingsquatting–privatizingemptyspace’,‘NewLeftProject’website,13September2012.http://www.newleftproject.org/index.php/site/article_comments/criminalising_squatting_privatising_empty_space
105.BBC,‘JailedsquatterAlexHaigh’smothercallsforleniency’,BBCNews,28September2012.http://www.bbc.co.uk/news/uk-england-london-19759056
106.A.Arden,‘Anti-squattinglawshouldberepealed’,letter,Guardian,25March2013.http://www.guardian.co.uk/society/2013/mar/25/squatting-law-should-be-repealed
107.S.ClarkandC.Spillane,‘EastEndhasthousandsinillegalsqualornearOlympics’,BloombergNews,26July2012.http://www.bloomberg.com/news/2012-07-25/east-end-has-thousands-in-illegal-squalor-near-olympics.html
8SOLUTIONS
1.BBC,‘DavidCameronbringsforward“help-to-buy”scheme’,BBCNewsandPolitics,29September2013.http://www.bbc.co.uk/news/uk-politics-24319583
2.P.Mason,‘Thegraduatesof2012willsurviveonlyinthecracksofoureconomy:uniquely,thiscohortcanexpecttogrowuppoorerthantheirparents’,Guardian,1July2012.
![Page 1108: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1108.jpg)
http://www.guardian.co.uk/commentisfree/2012/jul/01/graduates-2012-survive-in-cracks-economy?Thequotationcontinues:‘Forthegraduatewithoutafutureisahumanexpressionofaneconomicproblem:theWest’smodelisbroken.Itcannotdeliverenoughhigh-valueworkforitshighlyeducatedworkforce.Yettheessentialcommodity–adegree–nowcostssomuchthatitwilltakedecadesoflow-remuneratedworktopayforit.’PaulMasonnowworksforUKtelevision’sChannel4.
3.N.Mathiason,M.Newman,M.McClenaghan,‘Revealed:the£93millionCitylobbymachine’,‘TheBureauofInvestigativeJournalism’website,2012.http://www.thebureauinvestigates.com/2012/07/09/revealed-the-93m-city-lobby-machine/
4.Ibid.That£92millionfigureisestimatedbytheBureauofInvestigativeJournalists.
5.OfficeforNationalStatistics,‘Averageincomefallsinthelastyear’,pressrelease,20September2012.http://www.ons.gov.uk/ons/dcp29904_279770.pdfSeealsothefollowingwebsitewhichgivesagraphfor2001to2012foremployees:http://www.ons.gov.uk/ons/rel/regional-trends/regional-economic-analysis/changes-in-real-earnings-in-the-uk-and-london-2002-to-2012/art-changes-in-real-earnings-in-the-uk-and-london-2002-to-2012.html#tab-2--Changes-in-earnings-of-employees-in-the-UK-and-its-regions--2002-12
![Page 1109: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1109.jpg)
6.P.Inman,‘HowMervynKingfinallygotBobDiamond’,Guardian,10July2012.http://www.guardian.co.uk/business/2012/jul/10/how-mervyn-king-got-bob-diamond?
7.J.Quinn,‘ChancellorfileslegalchallengetoEUcaponbankbonuses’,Telegraph,25September2013.http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10333831/Chancellor-files-legal-challenge-to-?EU?-cap-on-bank-bonuses.html
8.ShelterScotland,‘LettingagentfeesareunlawfulinScotland’,reclaimingform,2012.http://www.reclaimyourfees.com/
9.G.Brown,‘Parliamentfailstoaccommodategrowinghousingproblem’,Guardian,10May2012.http://www.guardian.co.uk/society/2012/may/10/parliament-accommodate-growing-housing-problem
10.ShelterScotland,‘Digitalawardfor“Reclaimyourfees”’,pressrelease,29November2012.http://scotland.shelter.org.uk/news/november_2012/digital_award_for_reclaim_your_fees
11.R.H.Tawney,Theacquisitivesociety,London:Collins,1961reprintof1921edition,p.26.
12.Oxfam,Theperfectstorm:economicstagnation,therisingcostofliving,publicspendingcutsandtheimpactonUKpoverty,Oxford:Oxfam,2012,p.24.poverty,http://policy-practice.oxfam.org.uk/publications/the-perfect-storm-economic-stagnation-the-
![Page 1110: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1110.jpg)
rising-cost-of-living-public-spending-?228591
13.F.Engels,‘Thehousingquestion.PartII:howthebourgeoisiesolvesthehousingquestion’,DerVolksstaat,1872,§I.http://www.marxists.org/archive/marx/works/1872/housing-question/ch02.htm
14.J.vonBrühl,‘WhytheGermansrentinsteadofbuy’,Süeddeutsche,10April2013.http://www.sueddeutsche.de/geld/immobilien-warum-die-deutschen-mieten-statt-kaufen-1.1645266.NotethatinJapanthehomelessarehighlyvisiblebutmakeuponly2peopleper10,000,whereastheUKhas‘oneofthehighestlevelsofhomelessnessinEuropewithmorethan4peopleper1,000estimatedtobehomeless’,morethantwentytimesasmanyasinJapan.Manysourcescanbefoundbuttheeasiesttouseis:http://www.homelessworldcup.org/content/homelessness-statistics(asofSept.2013)
15.R.Syal,‘UKIPtogiveprioritytocouncilhouseapplicantswithparentsbornlocally’,Guardian,19September2013.http://www.theguardian.com/politics/2013/sep/19/ukip-council-house-parents-local
16.R.Behr,‘Westminstermaydabbleinxenophobia,buttherealityisthatracismisn’tpopular’,NewStatesman,15August2013.http://www.newstatesman.com/politics/2013/08/westminster-may-dabble-xenophobia-reality-racism-isn%E2%80%99t-popular
![Page 1111: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1111.jpg)
17.P.Toynbee,‘TonyBlair:godfatherofrealpolitik–andMurdoch’sdaughter’,Guardian,28May2012.http://www.guardian.co.uk/commentisfree/2012/may/28/tony-blair-rupert-murdoch-leveson
18.NationalAuditOffice,‘Thedecenthomesprogramme’,report,21January2010.http://www.nao.org.uk/report/the-decent-homes-programme/
19.P.Toynbee,‘Howtoturnahousingcrisisintoahomelesscatastrophe’,Guardian,18February2013.http://www.guardian.co.uk/commentisfree/2013/feb/18/housing-crisis-bedroom-tax-failure-to-build
20.ThatarticlealsorevealedthatapparentlythePrimeMinisterenjoysfeedinglambsandgrowingvegetables.Idon’tthinkhe’sintorenovatinghouses.Healsotendsnottothreatenbankers.AsofSeptember2013,heisopposingaproposedEuropeanbanonexcessivebankers’bonuses.SeeI.Oakeshott,‘CountryDavechampionsthegreenbelt’,SundayTimes,25March2012.http://www.thesundaytimes.co.uk/sto/news/Politics/article1001939.ece
21.A.Grice,‘LabourPartyConference:Labour“willbuild200,000homesayearby2020”,saysEdMiliband’,Independent,24September2013.http://www.independent.co.uk/news/uk/politics/labour-party-conference-labour-will-build-200000-homes-a-year-by-2020-says-ed-miliband-8835593.html
![Page 1112: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1112.jpg)
22.B.MacintyreandP.Orengoh,‘BeatingsandabusemadeBarackObama’sgrandfatherloathetheBritish’,TheTimes,3December2008.http://web.archive.org/web/20090120210653/http://www.timesonline.co.uk/tol/news/world/africa/article5276010.ece
23.Staffreporter,‘ObamatobankCEOs:“Myadministrationistheonlythingbetweenyouandthepitchforks”’,HuffingtonPost,4May2009.http://www.huffingtonpost.com/2009/04/03/obama-to-bank-ceos-my-adm_n_182896.html
24.B.Appelbaum,‘CautiousmovesonforeclosureshauntingObama’,NewYorkTimes,19August2012.http://www.nytimes.com/2012/08/20/business/economy/slow-response-to-housing-crisis-now-weighs-on-obama.html
25.NationalAuditOffice,‘TheMortgageRescueScheme’,report,25May2011.http://www.nao.org.uk/report/the-mortgage-rescue-scheme/
26.J.Birch,‘Rescuecall’,‘InsideHousing’website,25May2011.http://www.insidehousing.co.uk/blogs/rescue-call/6515707.blog
27.Staffreporter,‘Osborne’s“help-to-buy”schemecouldbeusedforsecondhomes’,YorkshirePost,22March2013.http://www.yorkshirepost.co.uk/news/at-a-glance/general-news/osborne-s-help-to-buy-scheme-could-be-used-for-second-homes-1-5519958
![Page 1113: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1113.jpg)
28.Areferencetothelegislation,StatutoryInstrument2625of2012,isgiveninthesectiontitled‘Renovationsandreality’inChapter4,note30,p.335.
29.CommunityLandTrust,‘Community-leddesignweekendannounced!’,latestnewsarticle,5December2012,asreadinApril2013.http://www.eastlondonclt.co.uk/#/latest-news/4571131363
30.A.McGibbon,‘Ifwewantthegovernmenttotakehousingseriously,anationaltenantsunionisthefirststep’,Independent,18February2013.http://www.independent.co.uk/voices/comment/if-we-want-the-government-to-take-housing-seriously-a-national-tenants-union-is-the-first-step-8500068.html
31.A.Deaton,‘What’swrongwithinequality?ReviewofJosephStiglitz,Thepriceofinequality’,Lancet,Vol.381,No.9,864(2February2013),p.362.http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(13)60154-3/fulltext
32.N.Sommerlad,‘GreatToryhousingshame:thirdofex-councilhomesnowownedbyrichlandlords’,DailyMirror,5March2013.http://www.mirror.co.uk/news/uk-news/right-to-buy-housing-shame-third-ex-council-1743338
33.P.Inman,‘IrishpropertytaxpenalizesDublinresidents,warncritics’,Guardian,27January
![Page 1114: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1114.jpg)
2013.http://www.guardian.co.uk/world/2013/jan/27/irish-property-penalise-dublin-residents
34.P.Inman,‘Couldwebuildabetterfutureonalandvaluetax?’,Guardian,16September2012.http://www.guardian.co.uk/society/2012/sep/16/’right-to-buy’-tax-revamp
35.G.Monbiot,‘Theresurgentaristocracy’,‘GeorgeMonbiot’website,4June2012.http://www.monbiot.com/2012/06/04/the-resurgent-aristocracy/
36.A.HullandG.Cooke,‘Togetherathome:anewstrategyforhousing’,InstituteforPublicPolicyResearch,report,21June2012,p.53.http://www.ippr.org/publication/55/9279/together-at-home-a-new-strategy-for-housing
37.N.Nowatzki,‘Wealthinequalityandhealth:apoliticaleconomyperspective’,InternationalJournalofHealthServices,Vol.42,No.3(2012),pp.403–24.http://www.ncbi.nlm.nih.gov/pubmed/22993961
38.Thevariousschemescurrentlyinplacearelistedhere:D.Dorling,‘Housingandidentity:howplacemakesrace’,BetterHousingBriefingPaperNo.17,RaceEqualityFoundation,March2011.http://www.dannydorling.org/?page_id=582
39.Staffreporter,‘Homeloanaidprogrammeenrichesbanks’,MicrosoftNews,2012.http://money.msn.com/home-
![Page 1115: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1115.jpg)
loans/article.aspx?post=8255a2a0-c7d0-4e6a-8e52-88f153566447
40.P.Wintour,‘EdMilibandpromisesdrivetodoublerateofhousebuilding’,Guardian,16December2013.http://www.theguardian.com/politics/2013/dec/15/ed-miliband-housebuilding-labour-councils-developers
41.G.Parker,‘Milibandplansmansiontax’,FinancialTimes,‘PoliticsandPolicy’,14February2013.http://www.ft.com/cms/s/0/1a71aa26-7694-11e2-ac91-00144feabdc0.html#axzz2L5NrbYKa
42.J.Waldron,‘Homelessnessandtheissueoffreedom’,UCLALawReview,Vol.39(1991),p.322.http://faculty.washington.edu/pembina/all_articles/Waldron%201991.pdfThepassageIamparaphrasingreads‘whatwearedealingwithhereisnotjust“theproblemofhomelessness”,butamillionormorepersonswhoseactivityanddignityandfreedomareatstake.’Backin1991,itwasamillionintheUS,nowitishundredsofmillionswhoareprecariouslyhousedacrosstherichworld,whoseparentsdidnotknowsuchfear,butwhosechildrenaregrowinguptothinktheirhomesarenotsecure.
43.A.HullandG.Cooke,‘Togetherathome:anewstrategyforhousing’,p.53.
44.Whichthecontrolofrentitselfachieves(seeTable2,p.271above).
![Page 1116: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1116.jpg)
45.AllPartyParliamentaryCyclingGroup,‘Britaincyclinginquiry’,HouseofCommons,pressrelease,18February2013.http://allpartycycling.org/inquiry/
46.D.Ballas,etal.,‘IncomeinequalitiesinJapanandtheUK:acomparativestudyoftwoislandeconomies’,JournalofSocialPolicyandSociety,March2013,pp.1–15.http://www.dannydorling.org/?page_id=3648
47.S.Alderson,Britaininthesixties.Housing:aPenguinSpecial,Middlesex:PenguinBooks,1962.
48.D.Bradly,‘LatentcoalitionsforegalitarianismmaybedormantinBritain,buttheyareasleepinggiant’,‘BritishPoliticsandPolicy’websiteblog,June2012.http://blogs.lse.ac.uk/politicsandpolicy/archives/24150
49.TheyoungermanwasRobertReich,thecurrentChancellor’sProfessorofPublicPolicyattheUniversityofCaliforniaatBerkeley.HewasformerlySecretaryofLaborinthe1990sunderClinton.
50.R.Reich,‘ThepoorandthemiddleclasswillsaveAmericayet’,30August2013.Conversationwithanoldfriendpostedat:http://www.alternet.org/visions/poor-and-middle-class-will-save-america-yet
51.S.Kraemer,personalcorrespondence,9March2013–containingyetanotherletterthatanewspaperfailedtoprintbutthatneedstoberead,paraphrasedherewithpermission.
![Page 1117: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1117.jpg)
52.S.Mirrlees,etal.,Taxbydesign,Oxford:OxfordUniversityPress,2011,p.481.http://www.ifs.org.uk/mirrleesReview/design
53.J.Mercille,‘TheroleofthemediainsustainingIreland’shousingbubble’,NewPoliticalEconomy,2013,DOI:10.1080/13563467.2013.779652.Asummarycanbefoundat:http://www.social-europe.eu/2013/04/the-role-of-the-media-in-propping-up-irelands-housing-bubble/
54.S.Donnelian,‘Co-opdowngradestokesmorebail-infears’,InternationalFinancingReview,13May2013.http://www.ifre.com/co-op-downgrade-stokes-more-bail-in-fears/21085245.article
55.BBC,‘LandlordswithWestBromwichfacetrackermortgagerise’,BBCBusinessNews,23September2013.http://www.bbc.co.uk/news/business-24203736
56.J.M.Keynes,‘Economicpossibilitiesforourgrandchildren’,Essaysinpersuasion,NewYork:W.W.Norton&Co.,1963,pp.358–73.http://www.econ.yale.edu/smith/econ116a/keynes1.pdf
57.K.MarxandF.Engels,ManifestooftheCommunistParty,1948printingoftheEnglish1888edition.http://www.gutenberg.org/cache/epub/61/pg61.html
58.K.Allen,personalcommunicationon‘cashbuyersversusmortgages,theSavillsanalysis’,16January2014,publishedasK.Allen,‘HomebuyersleftbehindinBritain’s
![Page 1118: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1118.jpg)
two-speedhousingmarket’,FinancialTimes,18January2014,http://www.ft.com/cms/s/0/ea516116-7f92-11e3-94d2-00144feabdc0.html#axzz2qh9T0sM5.
![Page 1119: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1119.jpg)
Acknowledgements
TomPennatPenguinbothcameupwiththeideaforthisbookattheverystartandradicallyrearrangedthefinalmanuscriptattheveryend,beyondnormaleditorialduties–thankyou.Myagent,AntonyHarwood,arguedin2012thattheideawasworthpursuingand,asever,Iamverygratefultohim.However,mygratitudegoesmuchfurtherbackintime,asIhavebeenlookingathousing,onandoff,foraquarterofacenturynow.ImustthanktheHousingandSocietyResearchGroupattheUniversityof
![Page 1120: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1120.jpg)
NewcastleuponTyne,andinparticularTonyChampion,forgivingmemyfirstacademicjobthatinvolvedresearchinghousing,in1991.MuchmorerecentlyIshouldthanktheRoyalIrishAcademyforinvitingmetoDublintolectureonthecrisisinearly2013andforgivingmuchusefuladvice,notleastfromMichaelHiggins,whotoldmeathingortwothatIdidnotknowabouteconomicsandtheIrishhousingcrisisaftermypresentationattheAcademy(whichIwishedhehadtoldmebeforehand!).Thisisnowamuchbetterbook
thanmyoriginaldraftbecausesomanypeoplehavehelpedtoedititandhavecommentedonearlierdraftsandlectures.TomPenncutoutagreatdealoftheoriginalhype,and
![Page 1121: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1121.jpg)
mademebefarclearerthanIotherwisewouldhavebeen.However,hiscommentscameonlyaftermanyotherpeoplehadhelpedtoorganizemythoughtsbetterthanIcouldalone.EditingstartedwithDavid,BronwenandAlisonDorling,whoreadthefirstdrafts.IamalsoverygratefultoCharlotteShepherd,HousingAidOfficeratSheffieldCityCouncil,andtoAndrewParfitt,HeadofHousingPolicyDivisionattheDepartmentofWorkandPensions,whobothcommentedinapersonalcapacity.IamindebtedtoJoe,TheoandothersattheSquatters’ActionforSecureHomes,whokindlyallowedmetopresentmyearlyfindingstoanopenhousemeetingofsquattersandwould-besquattersinsouthLondon.Iam
![Page 1122: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1122.jpg)
gratefulforadvicetoSarahBlandyandBenjaminHennig,boththenattheUniversityofSheffield;FernElsdon-BakeroftheInstituteofCommunityCohesion;CarlLeeatSheffieldCollege;TonyChampionofwhatwastheUniversityofNewcastleuponTyne(now‘NewcastleUniversity’);RobKitchenattheNationalUniversityofIreland,Maynooth;AlexFentonandChristineWhiteheadattheLSE;SebastianKraemeroftheTavistockClinic;KatSmithoftheUniversityofEdinburgh;BeckyTunstallattheUniversityofYork;GemmaThorpe,photographer,whotookalltheshotsusedhere;and,lastly,PaulColes,thenoftheUniversityofSheffield,whokindlyredrewallthegraphics.AndthankstoDavidDorlingand
![Page 1123: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1123.jpg)
StacyHewitt,whoreaditallagainattheendtocheckitstillmadesomesense,andthenreaditasecondtimeafterIcompletelyrewrotethefirsthalfyetagain,partlyduetoeventsinthehousingmarket!FinallyImustthankDonnaPoppy
forcopyeditingthemanuscriptandturningmyenthusiasticclaimsintomuchmorereadableprose,RichardDuguidforsteeringthefinalproductionsosmoothlyandKrishnaPrasadandcolleaguesatthetypesettersforworkingthroughtheChristmasandNewYearholidays.Allerrorsremainmyresponsibility,butIcouldnothavewrittenthisbookwithouteveryone’shelp.
![Page 1124: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1124.jpg)
![Page 1125: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1125.jpg)
THEBEGINNING
Lettheconversationbegin...
FollowthePenguinTwitter.com@penguinukbooks
Keepup-to-datewithallourstoriesYouTube.com/penguinbooks
Pin‘PenguinBooks’toyourPinterest
Like‘PenguinBooks’onFacebook.com/penguinbooks
FindoutmoreabouttheauthoranddiscovermorestorieslikethisatPenguin.co.uk
![Page 1126: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1126.jpg)
ALLENLANEPublishedbythePenguinGroupPenguinBooksLtd,80Strand,LondonWC2R0RL,EnglandPenguinGroup(USA)Inc.,375HudsonStreet,NewYork,NewYork10014,USAPenguinGroup(Canada),90EglintonAvenueEast,Suite700,Toronto,Ontario,CanadaM4P2Y3(adivisionofPearsonPenguinCanadaInc.)PenguinIreland,25StStephen’sGreen,Dublin2,Ireland(adivisionofPenguinBooksLtd)PenguinGroup(Australia),707CollinsStreet,Melbourne,Victoria3008,Australia(adivisionofPearsonAustraliaGroupPtyLtd)PenguinBooksIndiaPvtLtd,11CommunityCentre,PanchsheelPark,NewDelhi–110017,IndiaPenguinGroup(NZ),67ApolloDrive,Rosedale,Auckland0632,NewZealand(adivisionofPearsonNewZealandLtd)PenguinBooks(SouthAfrica)(Pty)Ltd,BlockD,RosebankOfficePark,181JanSmutsAvenue,ParktownNorth,Gauteng2193,SouthAfrica
PenguinBooksLtd,RegisteredOffices:80Strand,LondonWC2R0RL,England
www.penguin.com
Firstpublished2014
![Page 1127: All That Is Solid: The Great Housing Disaster · Affordable housing London Chapter 6: Slump Small rooms Housing finance Super-rich Lending slowdown. ... Figure 10. Maximum weekly](https://reader036.fdocuments.net/reader036/viewer/2022081615/5fd62b05997e6813964ec6af/html5/thumbnails/1127.jpg)
Copyright©DannyDorling,2014
Themoralrightoftheauthorhasbeenasserted
Coverphotograph©GettyImages.
Allrightsreserved
TypesetbyJouve(UK),MiltonKeynes
AllphotographsbyGemmaThorpe.GemmaThorpeisafreelancephotographerspecializinginsocialdocumentary,withaparticularinterestinyouthissues,migrationandidentity.ShehaspublishedandexhibitedherworkintheUK,ChinaandEurope.Formoreinfosee:www.gemmathorpe.com
ISBN:978-0-141-97495-8