On 8 December the Deputy Prime Minister, Angela Rayner, did the rounds of the television studios to publicise the Labour government’s plan to get 1.5 million new homes built over the next five years. The next day the press gave her a hard time with such headlines as ‘Rayner contradicts herself saying there “is plenty of housing” then admits there’s a “housing crisis”’ (tinyurl.com/3vjw84v4).
One of the things she said was: ‘There is plenty of housing already, but there’s not enough for the people that desperately need it.’
This is saying that there is enough housing available but that it’s too expensive for a lot of people. Which would indeed be a paradox. It would also mean that what is called the ‘housing crisis’ is not a crisis arising from there not being enough homes but from people not having enough money to be able to buy the homes that are for sale. In other words, a crisis due to people being too poor to pay for what they need.
So, strictly speaking, we should be talking about an ‘affordability crisis’. In which case, building more houses won’t solve the problem. As the headline of an article in the Times (11 December) by columnist Alice Thompson asked, ‘Building homes is fine but who will buy them?’
Good question, as Rayner would have had to prevaricate had this been put to her. Houses today are not built to provide accommodation for people, however desperately they might need it. They are built to be sold with a view to making a profit. As the Home Builders Federation explained to Thompson, ‘bluntly’ as she put it, ‘Builders can only build if buyers can buy’. The problem is that not enough buyers can buy.
In fact, not only is the affordability crisis preventing people using existing housing; it is also preventing more houses being built:
‘Big commercial housebuilders already have stockpiles of land where planning permission has been granted … yet more than 40 per cent of homes granted planning permission are paused.’
Thompson went on to explain why:
‘This is because housebuilders only build at the rate they can sell. Taylor Wimpey’s chief executive, Jennie Daly, defends the strategy thus: “We are not delivering more homes than the market can absorb”’.
Since the population of Britain is expanding there may well be a paying demand for more houses to be built and the profit-seeking housebuilding firms will meet this spontaneously. Whether this will lead them to build another 1.5 million over the next five years is another matter. They will certainly try not to build ‘more than the market can absorb’. The 1.5 million target will only be met if the market expands enough. But this would require dealing with the ‘affordability crisis’ by giving more money, one way or the other, to those who currently ‘desperately need’ better housing but can’t afford it because it’s too expensive.
That’s not going to happen, if only because the present government is actually cutting back on housing benefit by not increasing the rate in line with rising prices. Besides, if subsidising people to buy a house or flat became the norm then employers would not need to pay the same amount of wages. It would be back to square one.
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