Academic journal article Capital & Class

The Great British Housing Crisis

Academic journal article Capital & Class

The Great British Housing Crisis

Article excerpt

Introduction

The political significance of housing in Britain has waxed and waned over the last century. A major issue in the interwar period, housing's political prominence declined in the later 20th century as Britain's most pressing housing needs became largely met. The turn of the century, however, has seen a resurfacing of the housing question in Britain. Growing social housing waiting lists, rising rents and house prices, insecure tenancies, overcrowding, declining quality and the rapid gentrification driving the less well-off out of cities are just some of the problems that characterise housing in Britain today. They are making housing a major source of inequality, social division and deteriorating living standards. But they have also been a catalyst for some of the most vibrant and inspiring campaigns seen in Britain in a long time, with the Focus El 5 and New Era campaigns building momentum behind major housing reform for the first time in years.

If we are to use this momentum to achieve a lasting solution to the housing crisis, we will need to identify its root causes. The origins of the crisis lie in the 1980s privatisation of social housing and liberalisation of mortgage markets. The former dramatically reduced the availability of affordable housing and pushed more and more people into the owner-occupied and private rented sector (PRS). The latter induced a huge influx of credit into the housing market. Together they have given rise to a housing system that is increasingly organised around the maximisation and appropriation of ground rents at the expense of providing decent housing for all and in which use values are increasingly dominated by exchange values. Shifting this balance and replacing the idea of housing as an asset with the principle of meeting basic housing needs must be the crux of any strategy to improve housing provision in Britain.

The origins of Britain's housing system

The origins of Britain's contemporary housing system lie in 1915-1919, when, in response to widespread wartime rent strikes, reforms were put in place that would lead to the rapid expansion of owner-occupation and social housing at the expense of the PRS. Prior to the First World War, the overwhelming majority of people (between 75% and 90%) lived in privately rented housing. The remainder was mostly owner-occupied, with a tiny contribution from philanthropic, cooperative or similar sorts of organisation. Housing for the PRS was mostly built at the instigation of landlords, contracting builders to do the actual construction. Landlords tended to be small scale, owning one to several properties, but seldom large numbers (Daunton, 1990).

Rising rents, in part due to the neglect of housing construction during the First World War, led to rent strikes, which were the cause of the introduction of rent controls in 1915. Housing shortages prevailed in the immediate aftermath of the war, but high construction costs made it difficult to induce the private sector to build at the necessary rate. Direct state provision was resorted to as a means of addressing shortages (Holmans, 1987). From the early 1920s, a large local authority building programme began whereby local authorities instigated developments that were built by teams of directly employed builders (called Direct Labour Organisations) or by private contract builders. The local authorities owned the properties after construction and rented them out. Britain was unique among other European countries in providing social housing through direct state provision, although initially it was seen as a temporary measure that reflected the exceptional circumstances of the immediate post-war period (Power, 1993).

When construction costs and interest rates began to fall and real incomes and population rose later in the 1920s, private housebuilders began building on an unprecedented scale (Callcutt, 2007). With the PRS out of political favour and not investing, speculative housebuilders instead began to build for owner-occupation, instigating developments without a pre-arranged buyer, buying and preparing land and selling their finished product to owner-occupiers, who purchased with the aid of a mortgage. …

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