Housing has been a political football for decades, kicked endlessly around central and local government.
Councils, with little incentive to approve anything for fear of getting booted out of power, are often at odds with Whitehall, which has systematically failed to make any real difference despite a host of flagship policies from Right to Buy to Help to Buy.
Rather perversely, it’s the private sector that takes all the blame for this. As a result, property developers are up there with bankers and politicians as figures of scorn within the public consciousness.
Some of this is deserved: land-banking, poor quality flats and dodgy ground rents are just some of the recent issues giving the sector a bad name. But there are only a few bad apples.
Rising prices are a function of the land market and rocketing construction costs – dysfunctions beyond the control of any developer. Most sensible folk agree rent caps would send investors packing.
Developers are responsible for much of what makes London great: from the villages defining the capital’s cultural shape to the landmarks which help to direct revelers home after dark when their smartphones have long-since died.
Having been led to believe everyone should own homes, there’s growing public discord that most can’t afford it.
Right To Buy is still lauded by many as the great social levelers, but despite good intentions, its legacy has been damaging. The government sold off existing council housing without replacing it and allowed many to simply speculate and flip massively subsidised homes, trousering a huge profit at the expense of the taxpayer.
The extension of the scheme to housing associations will only exacerbate the issue.
When, in 1862, George Peabody bequeathed his substantial wealth to the creation of adequate and affordable housing for London’s industrious working classes, he stated in his will it must be “in perpetuity”. Without this guarantee, there seems little point in housing associations building more homes. If they know these homes are just going to be sold off at a later date then why invest in new stock?
While Help to Buy has boosted housebuilders’ share prices, it has done little to help those most in need.
Why should the City care? Firstly, because smart graduates need somewhere to live and they’ll increasingly choose between London and other global cities. And secondly, because without a transparent system where contributions are appropriately used, this culture of mistrust will grow.
Current mechanisms like Section 106 agreements ensure developers make a contribution to the council for infrastructure and social housing. We firmly support this. It’s absolutely right we should provide for communities where we build.
The burning issue is that councils are not obligated to spend this money on what the fees are nominally levied for. Greater transparency, or perhaps even ring-fencing, is needed to stop authorities squirrelling this cash away.
London needs housing at every price point. It also needs to recognise the key to affordable housing isn’t simply about taxing private developers until they burst. We need to take stock of all the assets – the old police stations, land around Tube stations and former prisons – and use these effectively. Housing suitable for all needs has to be seen as an essential part of a thriving, healthy city. It is at the heart of a social contract between a country and its citizens.
Equally, social housing doesn’t have to be taxing. It can be virtuous cycle, where the costs of building it are recouped over several decades by linking investment to government-backed income, before being reinvested to replace the sold off stock. Social housing was originally for all: built for the affluent of tomorrow. It can be again.
Whatever we do next needs to be far more collaborative and has to cross political lines. Without a change of tactics, nobody will win.