Social housing, landlord expropriation, and the need for a socialist housing policy

Social housing, landlord expropriation, and the need for a socialist housing policy

January 4, 2018 Off By Marxist Student

Home, the saying goes, is where the heart is. Yet it is there that we are being forced to bear the most sickening attacks. We face manipulative agencies, dodgy landlords, and a pathetic government building programme. This is pricing millions, especially those of us under thirty, out of a decent home.

Take house prices, for example. The house price to earnings ratio is over 9:1 in London. The price of a typical home in the UK is now around £200,000, well beyond the means of the majority. There has been an abject neglect of council housing over the last twenty-five years. This means that the number of local authority dwellings has halved to two million since 1991. Meanwhile, the Tories have a laughable notion of an affordable housing programme. Over 1.3 million people are on a waiting list for “affordable homes”. But rent for these homes can often exceed the average monthly salary. This forces people into the grasping hands of the private rented sector. Meanwhile housing benefit is nowhere near adequate.

Dodgy private landlords are continuing to rip off anyone they can. A landlord in England may evict a tenant, on nothing but a whim, with only six months’ notice. The Wilsons are a good example. These shameless profiteers got rich off the crisis. And at the same time they were evicting tenants on housing benefit. There are others joining the Wilsons in this rogues’ gallery of housing gangsters. They include the UK’s largest housing agency, Grainger PLC. Its unfortunate executives had to settle for a reduced bonus of only £2,192,000 last year.

First time buyers’ prospects are grim. A single person now has to save up for an average of thirteen years to buy their first home. For students the outlook is also appalling. Many universities fail to offer accommodation for under £100 per week. And after first year, housing agencies swoop in to scavenge as much cash as they can from students.

The housing crisis lays bare the crimes of the capitalist establishment and the need to fight it. Revolutionary socialism is the only genuine opposition to the landlord class. Young people – students and workers – can play a big part in the fight for decent housing. We have to campaign for a socialist future where everyone has a safe, secure place to call home.

Council housing

There has never been a greater need for a socialist housing policy. A first step would be an affordable council housing policy. This would reduce the number of people without a secure home.

In 1991, almost four million local authority dwellings were in use in England alone. By 2007, that figure had halved, and remains low today. This does not reflect a fall in demand. There are over three million people in the UK on council house waiting lists. Rather it reflects willful neglect of low-cost housing by successive governments. National Housing Federation figures are revealing. Last year private landlords made a £9.4bn profit from housing benefit. This costs the public £1,000 more per family renting than if they had been in social housing. Corbyn’s pledge to invest in housing is a step in the right direction. If Labour are willing to wage war on the private landlords that could solve the housing crisis.

No one is building low-cost homes. Instead we have seen suburbs burgeon with expensive houses for the upper-middle class. And then they tell us that the country is full. Too many immigrants, not enough space. This deceit aims to divide the workforce along national and racial lines. Immigrants are not the source of the housing crisis. The ruling landlord class is, by defending their decaying capitalist system.

There are enough homes already built to house the country’s population. But many are empty thanks to private landlords or agencies waiting for a hike in value. The country is not “full”. For the sake of argument, though, let’s imagine that there are not enough houses for everyone. Where could we build new ones?

There are over 66,000 hectares of brownfield sites (spaces of now derelict development) in the UK. As if this was not enough, the Crown Estate has expanded to 340,000 acres. This doesn’t even include private estates such as Balmoral. With the private estates included, the Royals own as much land as the MOD – 600,000 acres. The ruling class are refusing to build houses by pretending that there is not enough room. Meanwhile they sit on huge swathes of land.

To use this land for a social housing programme, we must expropriate the property of the ruling class. Without a social housing scheme, we will be waiting until our thirties to buy a home of our own. Or we will end up in the snakepit of the private rented sector for the rest of our lives. Building council houses is the first step towards a socialist housing policy.

Affordable housing

The Tories’ “affordable housing” scheme pretends to tackle the housing crisis. In fact it robs people of that most basic of necessities: a home.

Over five million people survive on housing benefit in the UK. This includes over ninety thousand children. To tackle this we need an emergency programme to build low cost, good quality homes. The government should fund this by the expropriation of the ruling class. But what we have instead is a social housing scheme run by private companies. This idea would be laughable if it wasn’t having such a devastating effect.

An affordable housing scheme, if it is to be successful, must be cheap, accessible, and secure. But the government relies upon the private sector to generate 50% of affordable homes. This means independent housing associations can control the scheme, and also the prices. Most of these “affordable” homes are under an “affordable” rent model. The costs of these rents can be 80% of normal rent prices (normal prices, of course, are often extortionate). The average UK wage is £2,200 per month. “Affordable” rents can be upwards of £2,400 per month. And a 60% reduction in the housing grant renders the scheme completely redundant.

These homes are not accessible either. You need a “five year local connection” to qualify for consideration, and then you end up on the waiting list. UK and Irish citizens have priority, proving that immigrants aren’t causing the crisis. Meanwhile, the housing associations negotiate down the number of homes they must build. And since the government rarely pick up what’s left, the houses are not getting built.

Temporary accommodation has increased by 21% since 2010. Poverty is worse now with “affordable” housing than decades ago under social housing. In 2016-2021 the Tories are “proud” to offer 135,000 “affordable” homes over the next five years. While the council house waiting list is three million people long. We need these houses, and many more, right now. Not in five years’ time.

The Tories will not provide us with the social housing we need. So we must build the socialist alternative. Should we fail, it’s an extra decade spent under our parents’ roofs, or the private rented sector.

First-time buyers

Owning a house is not an absolute necessity. Social housing schemes, when effective, can provide an affordable and secure home. But without a social housing programme, we’ve got an unappealing choice. Either we chase the myth of outright ownership, or we face the vicious realm of private rent.

Not since the 1960s have 16-30 year-olds found home ownership such a struggle. House prices for first-time buyers (FTB’s) have increased by forty-eight times since 1969. This compares to an average income increase of twenty-nine times. If the increase had been equal, our first properties would be over £75,000 cheaper. A figure as large as this is the difference between affordable and unaffordable for a huge number of us. Of course, higher prices lead to higher deposits and higher loans. We are being sucked ever deeper into a spiral of debt.

This increase in price means that only the richest can afford to buy a home. Shelter have condemned the way lower earners are being “locked out” of the housing market. It also means FTBs must save for much longer before they can own a home. A couple with one child now have to save up for an average of thirteen years. During which time they are at the mercy of unaccountable private landlords.

The result of all this is that the proportion of 25-34 year-old home owners has more than halved to 36% since 1991. Only 9% of 16-24 year-olds have the chance. Thus the lack of council housing and extortionate rent prices are more painful. Now we have no option but to stay with our parents well into our twenties and thirties. Even for those with supportive families, this is not conducive to launching a career. Let alone starting a family of our own. And for some people living with parents is completely unfeasible.

A Conservative government will not protect us against the landlords. The Tories are the face of the establishment, tied by a thousand threads to the ruling class. The opposition of the working class against the landlord class is not reconcilable. If we are to rid ourselves of the parasitic landlords, we must rid ourselves of capitalism. A secure, good quality home for every single person will be a cornerstone of our socialist future.

Grainger PLC

Grainger PLC is the UK’s largest listed residential landlord. Its 2015 annual report makes for some interesting reading.

“Our objective is to be the UK’s leading private rented sector landlord, delivering sustainable long-term returns to our investors and our partners”. No mention of taking care of their tenants. This opening spiel leaves out “and our tenants can go hang” but the implication is there. As far as the basics go, it wasn’t a bad year for Grainger: net rent £37.9m, fees & other income (i.e. your admin fees) £8.2m. The sinister-sounding “business operations” generated £258m, whilst recurring profit stands at £41.2m. Quite rosy, all things considered.

Going into the details, one particularly interesting feature jumps out of the report. “Growth in vacant possession value” is at 5.7%, on top of a 12% rise in 2014, whilst the “margin on vacant sales” is at 50.5%. There are enough houses and resources to give every single person in the UK a decent home. But parasitic landlords are leaving them vacant until the value increases. Meanwhile, another families don’t have roofs over their heads. Here is the proof, in the official report of a titan of the industry. No regret, no shame, only profit.

Three leading execs took home over £1m last year. Surprising, given Grainger’s £1,138,000,000 debt. Not to mention their willingness to barricade the doors of empty homes. Adding share incentives and bonuses, the combined payment to these three execs was £4,695,000. This is against a backdrop of brutal austerity. And with some of the most severe homelessness figures ever recorded.

The capitalist system is rotten to its core. As a generation struggles to find a home while landlords take millions of pounds by ripping us off. They must laugh at us, fretting over bills and rent, financing their unearned luxury. They should not laugh too much, though; the resistance is building. There have been rent strikes at several universities in recent years. Successes at UCL and elsewhere must catalyze similar movements across the country. Ten years ago, this might have seemed like a distant dream. Now, we have real life examples of rent strike victories. Imagine what we can do in the ten years stretching out before us.

Private landlords and universities

Today we are being shoved in the direction of private landlords. Little affordable housing and extortionate costs for new homes makes this inevitable. Renting has more than doubled since 2001, and will have more than tripled by 2025.

A tenant’s aim is to live in comfort and security. A landlord’s is to make a profit. Comfort and security cost money. Thus the opposition between landlord and tenant is irreconcilable. A landlord may be a warm, pleasant, and kind person. But as a class the property-holders must to exploit tenants to make a profit.

Unfortunately for us, it is the landlords who have the power. Picture a family of four. In England, the basic standard private tenancy is six months. So after this period of time a landlord is free to evict the family without an explanation. There is no obligation to provide alternative accommodation. Thus leaving the family without a home. Eviction from private rented homes is the leading cause of homelessness.

The above is the worst case scenario. But the terms of a tenancy (rent, bills, repairs) stack everything in the landlord’s favour. Students know this better than most. Unless a student stays at home, most opt for university accommodation. Prices are extortionate. Some universities fail to offer an option below £100. And the quality of a room at the lower end of the spectrum is often inadequate.

Students are an easy target for landlords and universities. But recently that all changed with rent strikes at several universities. These included UCL, Sussex, and others. Our task now is to take the fight to as many campuses as possible.

The Wilsons

In 2015, Britain’s biggest landlords announced the sale of a £250m property empire. The capitalist media told it as a story of an everyday middle-class family done good. Fergus and Judith Wilson, are a sixty-something couple from Kent. They were bringing their careers to a close. As dedicated and admirable investors, they were settling down into well-earned retirement. Albeit with ten properties and a £2m mansion on the side.

Fergus himself was not shy of giving his thoughts. “It has been a fantastic time for buy-to-let landlords because the market has been unregulated” he explains. He described buy-to-let as a “national hobby”. In reality, the buy-to-let market is only for those who can support an investment portfolio. And it has built its foundations on the masses of tenants it exploits. So how did the Wilsons, two former maths teachers, grow to dominate this ruthless business?

They began buying in the early nineties, when house prices were lower. They raced to build up their portfolio, sometimes at the rate of a new property every day. All the while, house prices rose ever higher thanks to New Labour’s refusal to build new homes. Then came the disastrous crash of 2008, which put the Wilsons on the brink of ruin. The Bank of England’s slashing of interest rates, saved them. Fergus and Judith found themselves in 34th place of 2009’s UK rich list. These profiteers of austerity then sold up to assorted Arab investors. This after they had already sold 100 properties to far eastern investment groups for £25m.

Fergus describes the pair’s career as “a happy, happy ride”. We can’t say the same for his tenants. In January 2014 the Wilsons evicted 200 tenants on housing benefit. Those most in need of an understanding landlord, he booted out onto the streets. Those hit hardest by the crash from which he profited, he cast aside. A “happy, happy ride” indeed. Did Wilson take responsibility for his actions, offering condolence or sympathy? Nope. Instead, he vowed not to take on any more applicants on welfare. He said: “single mothers on benefits have been displaced to the bottom of the pile”. Still, it’s important to remember who the real victim is here – the poor landlords having to pay tax. “Landlords are an easy tax grab” he complained. The heart bleeds.

Wilson didn’t stop there. Eastern Europeans, he said, are “less likely to default… we’ve found them to be a good category of tenant who pay on time”. The couple admit to preferring immigrants as tenants. This is an attempt to shift the blame for the housing crisis from the landlords onto migrants. It’s a trick designed to hide the real enemy behind a veil of nationalism. It divides workers who would otherwise stand together as comrades.

The Wilsons are not extraordinary cases. They are the genuine face of capitalism, a system of exploitation and division. When one major landlord evicts tenants on housing benefit, others follow their lead. “Social cleansing” is the result. A generation of people end up in poor quality housing, often far away from their previous homes. Corbyn’s proposed reforms (rent caps, council house building) would be a step forward. But these are not enough to destroy parasitic landlordism. To be rid of them, we must be rid of capitalism.

We demand:

  • A massive programme of social and affordable house building!
  • Expropriate the biggest landlords to fund house building!
  • Corbyn’s Labour to power with a socialist housing policy!

by Frankie Toynton, Hull Marxists