Octavia Hill's housing dream turns into a nightmare

Yesterday the great and the good unveiled a memorial in Westminster Abbey to commemorate social reformer Octavia Hill, who died 100 years ago. A pioneer thinker and campaigner, she worked to promote the idea of a collective form of property ownership.

Land and buildings of special beauty, she insisted, should be held in trust, on behalf of the nation, inalienably and in perpetuity. This proposal was enshrined in the 1907 National Trust Act.

But Hill did not confine her concerns to aesthetic issues. She saw how private landowners and the demand for profit rode roughshod over places of beauty as well as the lives of millions of workers forced to live in conditions of squalor. With critic John Ruskin, Hill set up social housing schemes to provide homes for some 3,000 tenants in London.

The 20^th century was to see the rise of mass municipal housing schemes which constituted an alternative to the commercial market. But today, decent social housing has virtually become a thing of the last century.

The glaring problems that Hill addressed, rather than being resolved, are worsening. The National Housing Federation, which represents housing associations providing accommodation for some five million people, reports that a major housing crisis in England and Wales is set to worsen rapidly.

One in 12 families in England is currently waiting for social housing, while homelessness has risen by 26% over the last two years. Social housing stock has plummeted over the last decades as rents and property prices continue to soar.

The cost of privately renting a home has gone up by 37% over the last five years. The result is that 417,830 families presently depend on housing benefit to help them pay private rents – an increase as the NHF points out – of 86% in only three years.

Rising housing costs have a disastrous impact on the lives of millions of people, especially young families. Incomes have not kept up with housing costs with the result that increasing numbers of people who in employment need to claim benefits just to keep a roof over their heads.

A market analysis by Oxford Economics shows that social and public house building is dwarfed by the commercial market: 72,876 new homes were built by the private sector, 43,164 by housing associations and a mere 1,830 by local authorities in 2011-12.

The future is equally gloomy. House prices and rents are forecast to show steep increases. Private rents – already unaffordable for many – could be some 27% higher by 2017.

Perhaps the most shocking reality is the contrast between house prices, rents  and earnings. London heads the list. The average house price in London in 2011 was a staggering £421,395. For a 75% mortgage you would need an income of £90,299 per year plus a substantial deposit. Not too surprisingly, the lowest house prices are in the North-east – one of the most deprived, high unemployment areas of England.

Amongst other proposals, the NHF calls for the government to release more public land for building by housing associations and to invest in more social housing.

But is building on brownfield sites what is likely to be low quality housing while huge numbers of properties stand vacant or need upgrading really the way to go?  Such measures can only be sticking plaster on a huge festering wound. A revolutionary housing policy is needed to end the recurring misery of homelessness, overcrowding, soaring rents and exploitative landlords.

The right to affordable housing must be worked for side by side with, as Octavia Hill foresaw, the protection of open spaces for the appreciation of all. The fight for a social right to decent housing will be central to the creation of an Agreement of the People, which will begin in London on November 17.

Corinna Lotz

A World to Win secretary

Housing crisis is market failure

In a league table of capitalist market failures, housing comes pretty near the top. The market’s distortions and extremes are so enormous that that it is heading for its own internal collapse.

The inability of the system to provide decent affordable homes for everyone is underlined by a new report that warns of a “lost generation” when it comes to access to a roof over their head.

For a long post-war period, local authorities built millions of homes for rent, enabling most new households to find somewhere to live. Rents in the private sector were controlled.

Since the early 1980s, a housing market driven primarily by the obsession with owner-occupation has replaced state intervention. That was the policy of the Thatcher years and the subsequent New Labour governments.

It coincided with the deregulation of the financial system that provided anyone who wanted it with endless amounts of credit. Not enough money to pay your mortgage? Don’t worry, just borrow five, six or seven times your annual income.

In the ten years to 2007, real average house prices doubled while disposable income only rose by 15% in the same period. In London, prices soared by over 350% over the first decade of the Blair government.

It couldn’t last and it didn’t. Come the 2008 meltdown, mortgages dried up while the house price bubble was maintained by a shortage of supply. Now the housing market is reduced to those already in it. New entrants need not apply, unless they can find 25% deposit. In London that’s well over £100,000.

The National Housing Federation (the NHF) today blames a “chronic under-supply of homes” for a crisis that is forcing many young people into expensive rented accommodation (a typical small flat in the capital now costs around £1,000 a month).

A report for the NHF predicts that owner-occupation totals will continue to fall, private sector rents will rise by 20% in the next five years and that six in every 10 Londoners will live in rented accommodation by 2021.

The NHF wants government action to force developers to use hoarded land and build more homes. This is hardly a solution, however. Even the NHF’s own member housing associations have yielded to government pressure to build homes for sale rather than rent, adding to the crisis.

In the 19th century, Frederick Engels wrote about the “so-called housing shortage, which plays such a great role in the press nowadays” and asked rhetorically:

“How is the housing question to be solved then? In present-day society just as any other social question is solved: by the gradual economic adjustment of supply and demand, a solution which ever reproduces the question itself anew and therefore is no solution.” In other words, capitalism has a way of recreating shortages over and over again. In place of the market, we propose:

* Housing should be built and used to satisfy need rather than as a source of income or profit for developers, speculative builders, investors and landowners

* Development land including crown and church holdings should come under the control of Community Land Trusts

* The funds of all mortgage lenders should be transferred to existing or new mutual organisations accountable to savers and borrowers

* All mortgage debt should be cancelled and renegotiated as either affordable rents or repayments determined by the cost of new building and the ability to pay

* An enforced reduction in existing rents in council and housing association properties should take place

* A massive expansion of high quality social housing at affordable rents

* Social ownership of builders/developers and the financial sector

* Requisition of Britain’s 750,000 empty homes for those in need

* New ways of transferring homes that ends property speculation.

Paul Feldman

Communications editor