Depressing housing chart of the week: Help To Buy meant help the rich

Mmmmm, houses. Image: Getty.

It’s housing white paper day, on which we finally learn all about Theresa May’s government’s big plans to solve the housing crisis. (Spoiler alert: they’re not that big.) It’s going to take a while to unpick that, though, so before we do, let’s take one last look at the last government’s record.

One of David Cameron and George Osborne’s signature ideas to help first-time-buyers onto the housing ladder was to, well, lend them money. The Help To Buy government equity loan covered up to 20 per cent of the value of new houses; it was meant to correct for the the fact that deposits had become so large that most young people could never realistically save them.

A second scheme, New Buy, was a government guarantee for mortgages of up to 95 per cent of the value of certain homes, in an attempt to get banks lending and (somehow, somewhere down the road) builders building.

This sounds great, right? Sounds like the sort of thing that’ll help people who aren’t inheriting mountains of cash to pull themselves onto the housing ladder, yeah?

Well, no. Check this chart from the Resolution Foundation. The blue bars are a little confusing – best I can tell, it’s cumulative, so the key should really say (e.g.) “up to £30,000”, as opposed to £20,001-£30,000. But the text makes things pretty clear:

The point is that the media household income of those who benefited from the two government subsidy schemes described above (the text in blue) is a good £10,000 higher than the median income of all households (the text in yellow). It’s nearly £20,000 above the average among those classed as low to middle income.

In other words, the Help To Buy schemes were never about helping poorer households at all. They were about bridging the gap for those who were already pretty rich.

Despite Cameron’s nonsense about “turning generation rent to generation buy”, it wasn’t really about helping the average 25 year old at all. Instead it was about locking up the votes of the sort of households that would, historically, have gone Tory, but might not in 2015 because they were angry about being stuck in overpriced private rental housing.

In some ways, this is unsurprising: Tory economic policy helps rich most, news at 11. And I probably wouldn’t whine too much if it weren’t for one thing: by pouring more money into the housing sector, it inflated house prices yet further. (So said Shelter in autumn 2015.)

 That’s because it didn’t really achieve its other ostensible aim of increasing housing supply, because it never tackled the underlying reasons why housebuilders weren’t building more. “Lack of customers” was never the real problem for the housebuilders. “Lack of land” and “lack of competition” were.

Today’s white paper looks like it might tackle the latter of these problems, by encouraging SME builders back into the market. But it looks like the government has totally bottled it on the need to increase the land available for building. This is very unlikely to be the last Depressing Housing Chart of the Week around here.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and also has a Facebook page now for some reason.

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Could twin towns bring Britain back together?

An unlikely pair. Image: Wikimedia Commons.

Twin towns: an irrelevant novelty to most of us, a peculiar name on a village’s welcome sign. But could linking one British town to another – a domestic reinterpretation of this long-standing European practice – help bring Britain back together in a time of national crisis?

Born in the aftermath of World War II, town twinning aimed to foster cooperation and solidarity across Europe. Communities entered formal alliances, nurturing friendships and shared histories. Coventry forged links with Dresden and Volgograd, then Stalingrad, marking the devastation faced by their citizens during the war.

The democratisation of Greece, Spain and Portugal during the 1970s led to a new wave of twin towns across Europe, as did the fall of the Soviet Union a decade later. Since its inception, the focus of town twinning has been on uniting people through relationships. It is a testament to the initiative’s success that many of these remain to this day; Coventry recently enjoyed a performance at the city’s cathedral by Volgograd’s children’s choir.

While European relations have improved since the 1940s, unity at home has received less attention. As a result, Britain is riven with deep economic, political, educational and cultural divides. These fault lines are increasingly determined by geography, with a growing gap between our big metropolitan cities and almost everywhere else.

In comparison to other European countries, we face staggering levels of regional inequality; six of the ten poorest regions in northern Europe can been found in the UK. As outlined by Alan Milburn, the government’s former social mobility tsar, “the country seems to be in the grip of a self-reinforcing spiral of ever-growing division. That takes a spatial form, not just a social one.”

These divisions are poisoning our body politic. As Adam Smith argued in The Theory of Moral Sentiments, putting yourself in someone else's shoes is vital for developing a moral compass; in doing so "we conceive ourselves enduring all the same torments, we enter as it were into his body, and become in some measure the same person with him..." But this is difficult when we have little interaction or experience of those with opposing views.

This is increasingly likely in geographically polarised Britain, with the places we live dominated by people who think alike. Our political leaders must commit time and energy to bridging these divides, just as the leaders of Europe did in the aftermath of the Second World War. By forging links between different parts of the country, a new era of domestic town twinning would do just that.

School exchanges between sister towns would offer an opportunity for children to be exposed to places, people and perspectives very different to their own. This would allow future generations to see things from an alternative and opposing perspective. It may also embed from a young age an awareness of the diversity of experiences seen by people across our highly unequal country.

MPs would be encouraged to spend time in their constituency’s sister town. First-hand exposure to voters in a very different part of the country would surely soften the views of even the most entrenched parliamentarian, making for a more civil debate in the Commons. Imagine the good this would do for Parliament today, with Brexit gridlocked because of the unwillingness of MPs to compromise.

In 2016 the Carnegie UK Trust launched its Twin Towns UK programme, a pilot linking twenty towns across the UK to examine how they might develop together. Emerging benefits include a reduction of insularity and a greater awareness of the bigger picture. Its focus was not on bridging economic divides – towns with similar socioeconomic characteristics were twinned – but initial outcomes from the scheme suggest a broader programme of domestic town twinning could have a powerful impact.

Looking further back, Camden has been twinned with Doncaster since the 1980s, a relationship that unionised Camden Town Hall workers forged in a display of solidarity with striking miners during the 1980s. Funds were raised to feed families of striking workers at the pit and Camden locals even drove north to deliver presents at Christmas. Though the relationship appears less active today, it serves as a powerful reminder of twinning’s capacity to bring people from very different places together.

As we prepare for Brexit it’s imperative that we protect existing twin town relationships with our European partners. This is of vital importance when we know sadly many of these are under threat from austerity and gloriously un-PC mayors. But we should look to breathe new life into these traditions too, where possible. Domestic town twinning would do just that: a step towards bringing Britain back together, just as a continent was reunited after the devastation of war.

Ben Glover is a researcher at the think tank Demos.