Needed - 30,000 new homes

Amidst all the celebrations and vows of a brighter future as the clock strikes twelve on December 31^st 1999, we will probably forget one new century wish that it seems likely we will not grant - a home to everyone who needs one. For there is alarming evidence that we are, as a Country simply not building enough homes for rent (‘social housing’) and will, on present trends not do so over the next ten to fifteen years. Estimates put the shortfall at over 30,000 a year - and that is on top of a backlog of homes needed now and repairs required to keep council homes habitable. Action is being taken by the government on the latter with several billion pounds going to help repair homes over the next few years - but that doesn’t build new homes.

In the 1990s the crisis has been hidden by a number of factors. A key element was the availability of houses to rent because of ‘negative equity’ - where house prices dropped and owners could not sell without taking huge losses. Many of these rented their houses out when they moved. Now prices are rising again, these rented properties are disappearing. In the 1990s also, the last government decided that ‘the market’ could solve the problem - instead of investing in bricks and mortar, housing benefit was introduced to give would-be tenants the ability to purchase rooms at market rate. Such a mechanism lives or dies by the law of supply and demand, and over the past few years demand has soared. Benefit payments, standing at £3 billion in 1990, now top £12 billion. Worse still, as rents rise with the increasing scarcity of rented property, so benefit must, logically rise to meet new prices. It was not surprising then, that the last government ‘capped’ housing benefit, and now the money available does not in many cases cover the cost of a market rent.

We now have the worst of all worlds - fewer new homes to rent and the mechanism that was supposed to replace the need for new homes simply failing to do its job. There are two other factors which make the scene even more bleak. Firstly, housing benefit is open to widespread fraud, particularly by landlords claiming for non-existent tenants. It is estimated that up to a quarter of all benefit claims are bogus - that represents £3 billion going out of the window each year. In Southampton the Council works hard to trace and prosecute these landlords and work with the very many good landlords there are in the city - but the problems remains severe. Secondly, the policy of selling council houses, and now Housing Association homes means that, over the last twenty years, over 100,000 more ‘social’ homes have been sold than have been built. This policy has also been designed to place homes onto the market - in this instance by ‘donating’ the price of bringing the house to market value by the discount offered upon sale.

There may well be a case to continue to sell older properties where rents have been paid over many years and the original cost of building may have been recouped, but it makes no sense to put money into building new homes when we know there is a desperate shortage arising only to see them disappear almost as soon as they are completed.

We need to make a stark choice just as we did in 1919 when our soldiers came home from the war to find that many of the slums they had left to fight in the trenches were still standing. Either we trust ‘the market’ to solve our housing problems or we build, and retain in the public sector, homes that people can live in decently. In 1919 they chose to build, and the first act of Parliament requiring Councils to seek out the need in their areas and build affordable homes was passed. We need to do the same today. For many individuals the regime has been good - they own the home they have dreamed of and good luck to them. But overall, the great experiment in housing benefit and indiscriminate sales has failed.

 We need to build urgently - but many people will rightly ask: where’s the money coming from? The answer is quite simple. If we can seriously attack the fraud living off the housing benefit system, we can transfer the savings back to bricks and mortar. The sums are vast. Let’s say we only track down and eliminate 25% of fraud - a modest target - we release £750 million pounds a year. On Housing corporation figures, and assuming that private investment continues to run alongside the public contribution, that’s over 30,000 new homes a year, or enough to fill the gap.

If we think for a moment of the thousands of people across our city who have homes in the places where the city council built sometimes at a rate of 1000 houses a year in the 1960s we can see where we would all be if that had not happened. I do not want us to look back in thirty years time when it is too late and bitterly regret that we did not do the same in the first years of the new century.

ends