Giveaway George has me left in a quandary.
Despite the constant calls for him to let Britain grow its way out of this never ending downturn, he decided, in this week’s Budget, to put all of his economic eggs into the housing basket.
“Owning your own home is the most basic human aspiration” said Gorgeous Gideon as he explained that, despite saying the cupboards were bare, he had managed to come up with £12bn for his mortgage guarantee scheme, £3.5bn for his Help-to-Buy scheme and £130bn to underwrite mortgages.
He also increased the maximum Right-to-Buy discount for council tenants who want to become home owners from £75k to £100k.
I’ve lived in one council flat or other for almost my entire life.
The flat I live in now, on a slightly grimy Tooting council estate, has been my home for over 20 years.
Stating these facts usually elicits one of two responses:
- You are a freeloader. Council flats are meant for those in desperate need. You have a job which pays you above average salary. That flat should go to someone who really needs it.
- You have no ambition. A man of your age should be on the housing ladder, moving to nicer premises and improving your life. Are you a drug addict or something?
Both of these reactions say something about our society and how we think about life. Both are flawed.
The freeloader argument is the most painful. I like to think I have a deep sense of civic responsibility and so the allegation that I am taking away from those in greater need is an uncomfortable one.
My view is that every UK citizen should have a reasonable, secure and sensibly priced place to live in. It should be part of the deal we make by living in a developed society.
Council properties are now thought of as homes of last resort because of a deliberately manufactured scarcity.
After the second world war, Labour introduced the New Towns Act 1946 and the Town and Country Planning Act 1947. Legislation was also introduced which said council housing was for the ‘general needs’ of a wide range of society rather than just for the working classes as was the case with the old Alms Houses.
Labour Health and Housing minister Aneurin Bevan, said the new estates would be places where “the working man, the doctor and the clergyman will live in close proximity to each other”.
Council estates were never meant to be ghettos for the poor, they were supposed to be places of community, where all walks of life lived side by side.
Housing benefit was put in place to ensure those temporarily out of work didn’t find themselves homeless because they couldn’t afford their rent.
I love living on my estate. I love that it is a mini-village in its own right. I love the mix of white, Asian and black families that have been there for as long as I have. I love the Poles and Somalians who have moved in more recently. I love that I watched whole families grow up under my nose.
I feel very safe there and despite living in an area of high crime, I’ve never been burgled or mugged. (I don’t even have a proper lock on my door and can get in with a ruler if I’m locked out).
Other than a short period after university, I have never claimed housing benefit, I pay my rent and so see no reason to move out of my home.
The Right-to-Buy scam, set up in the 80s saw thousands of council properties become private homes.
At the same time, councils were prevented from using the money they earned from the sales to build more homes.
A scarcity was created, which artificially caused a housing boom and lined the pockets of many.
A wonderful piece of journalistic research, reminiscent of its glory days, by the Mirror found that a third of these properties are now owned by private landlords.
Many are rented back to tenants who receive housing benefit.
In the clearest example of feathering your children’s nest Thatcher’s Housing minister Ian Gow’s son Charles and his wife own at least 40 ex-council flats on one South London estate.
The ‘free market’ in rental prices has allowed them to soar and having buy-to-rent properties is seen as a savvy way of bringing in an extra income.
People often tell me that my rent is ‘subsidised’ because it is way below that of the private sector.
The reality is that my rent is perfectly reasonable (about £480 for a one bed flat) and that housing benefit has been used to subsidise private landlords.
My one bedroom flat is perfect for me and I have no interest in moving into private rented accommodation.
I would rather my rent go to my local authority and therefore, hopefully, to the community I live in, than into the pocket of some landlord or into the coffers of some mortgage lender.
Since the left lost the battle of the 80s, our country has become more and more obsessed with growth, both personal and national.
We have failed if we don’t do ‘better’ than our parents and each year we examine our lives to see if they are ‘better’ then the year before.
By better, people usually mean ‘having more stuff’ and by ‘stuff’ they usually mean houses, holidays, cars, technology and all the other purchases that make life easier or more comfortable.
We have been taught that buying our first house is now a rite of passage into being a responsible adult and parents are encouraged to squirrel away money to help their children get on the housing ladder.
Osborne was continuing this lie by claiming home ownership is a ‘basic human aspiration’.
So Germans either have no aspirations or are not human. The same goes for the millions of Britons who never step foot on the ladder.
There’s nothing basic about wanting to own your home. It’s a relatively newly invented desire.
If enough people are told a lie for long enough it becomes the norm.
In some ways the housing market is like the diamond engagement ring market.
The producers of diamonds somehow got us all believing that to show our love before marriage, we needed to buy the most expensive ring we can afford. The scam is beautifully described in this Price Economics blog: http://blog.priceonomics.com/post/45768546804/diamonds-are-bullshit
They got the world to believe that a shiny stone was an intrinsic demonstration of love.
The housing market is similar in that virtually the whole nation has been convinced that a house is not a home but an investment and that we should all sacrifice whatever we need to so that we can buy as expensive a home as possible.
It’s a luxury of the privileged, and by that I mean pretty much all of us, to be able to choose how much of our life effort to devote to earning.
Most of us don’t have to worry about whether we will be able to earn enough to eat or to put a roof over our heads. We might be desperate to maintain the lifestyle we have but we don’t usually fear starvation and destitution.
I have just chosen to believe that my standard of living is perfectly acceptable and that I would like to spend more of my time and energy doing things that fulfill me or move the world in the direction I believe it should go in.
This means that, while I’d love a flat with a built in cinema and gym, I don’t want it enough to give it my energy.
I have plenty of ambition, it’s just that not much of it is targeted at having a ‘better’ life.
My politics and poor credit rating have, in the past, conspired to stop my taking advantage of the Right-to-Buy windfall that could have put me on a firmer financial footing years ago.
My credit rating has now improved but my politics still rail against taking another home out of the council pot.
For years I’ve fluctuated between telling myself that I could be a custodian for my flat, making sure it stays out of the hands of private landlords and telling myself that I would be choosing greed over conscience if I buy.
The rent on my one bedroom flat is £480pm. The flat is valued at around £150k. My Right-to-Buy discount would be £75k. A 25 year mortgage at 4% would cost me £400pm.
While my interest rate might go up over this time, my rent will probably go up by more.
While I have no intention to leave my home, my neighbours might not feel the same. Three years after buying I could sell or remortgage and recoup much of the £75k discount that I’ve been given.
This would give me, and most other council tenants, the type of economic freedom we can usually only dream of.
The other factor to consider is security.
The promise of a home for life seems a little less secure and changes to tenancies have been mooted which could see them means tested or changed to a time limited tenancy.
As more and more former tenants do the financially savvy thing and buy their properties, or make use of the Government’s new schemes which make getting mortgages easier (Fannie Mae anyone?), I fear these threats may become reality.
Many of my neighbours won’t be struggling with the same dilemma. They will do what makes financial sense for them and their families.
My estate is already 30% privately owned. This will rise under these new incentives.
So while the earth shifts beneath me, do I stand firm on my principles or do I play the cards that have been dealt while calling for a different game?
I believe all drugs should be legalised but that doesn’t mean I should smoke a spliff in front of a copper.
The pressure to take the King’s evil shilling grows ever stronger.