The rise in vacant properties exposes the housing shortage myth

Empty homes in Accrington, Lancashire. Image: Getty.

Figures from the Ministry of Housing, Communities and Local Government released on Monday poured cold water on the widespread misconception that Britain’s housing crisis results from a lack of houses.

Official stats revealed that the number of long-term vacant properties in England rose by 5.3 per cent in the 12 months to October, to a total of 216,186.

In London, where housing supply is scarce, the growth of empty homes was double the national rate, increasing 11 per cent to 22,481.

This complements other evidence showing that housing stock levels have consistently risen at a higher rate than population growth, even in the past couple of decades – even in London.

Source: Positive Money (using ONS and MHCLG data).

According to the economic laws of supply and demand, this means we should be seeing an increase in housing affordability, rather than the rocketing prices that characterise millennials’ existence.

So why are homes so unaffordable?

We can’t think about the housing crisis in simple economic terms, where too many people are chasing too few homes. To understand the housing crisis, you’ve got to look at it as a broader political and economic problem – with finance and ownership both playing key roles.

Source: Positive Money (using Nationwide housing survey and Bank of England data).

In Britain’s financialised economy, homes are treated as a speculative asset, rather than simply as places to live.

In an era of low business profitability for advanced economies like the UK, housing is often the easiest and safest bet for those looking to expand their wealth, as property prices seem almost guaranteed to rise at a higher pace than interest rates, which have remained historically low throughout the past decade.

Correspondingly, banks love lending money against houses. Both in the decades leading up to and following the crash, around half of bank lending flowed into property.

Ultimately, houses are worth however much banks are willing to lend. Banks, which create new money simply by lending, are essentially unconstrained in the amount of money they can conjure to bid up property prices.

The nature (or lack) of regulation favours those who already own property, making it easier for buy-to-let landlords or wealthy speculators to snap up homes, keeping these empty as assets rather than places for people to live.


First time buyers, who are usually limited to borrowing only four or five times their annual income, are outbid by those who already own homes, who can leverage them as collateral and perhaps also use their rental income to borrow much higher amounts.

Both banks and homeowners are reliant on ever-rising house prices, otherwise they risk going into negative equity and becoming insolvent, with devastating consequences for the economy.

In the absence of productive investment, this housing bubble is driving the UK economy. To prevent it bursting, politicians create artificial scarcity. This means the state protecting the rights of existing property owners and speculators hoarding housing stock, a reality that is reflected in policies like anti-squatting laws that have made occupying empty properties more difficult.

Property developers love the dominant housing shortage story as it means councils will often let them build luxury developments, in the misguided hope that simply building more homes – any homes – will ease the crisis.

The “shortage” rhetoric also lets the property-owning class off the hook, instead allowing politicians and property owners to reiterate the toxic “Britain is full” myth, blaming immigrants instead of speculators.

So if we want to combat the housing crisis, what story should we tell? The common sense maxim that no one should own more than one home until everyone owns a home would be a good place to start.

 
 
 
 

Jane Jacobs and Le Corbusier would agree on one thing: we need more social housing

Unite d’Habitation, Marseille. Image: Iantomferry/Wikimedia Commons.

Much has been written in CityMetric and beyond about the urban planning debates of the 1950s and ‘60s, that came to be characterised as a battle between master-planning and preservation. One side of the debate was personified by the father of modernist architecture, Le Corbusier, whilst the counter-argument was advanced by writer and journalist Jane Jacobs.

But when it comes to London’s housing crisis, aren’t there a few things that these two would actually agree on?

Jane Jacobs’ writing about the organic nature of self-organising communities, demonstrated, in her words, by the “intricate sidewalk ballet” of inner city neighbourhoods, should be required reading for anyone interested in how cities function. But today, Jacobs is increasingly invoked in attempts to oppose new developments of any kind. Her role in conceiving Manhattan’s West Village Houses, a low cost rented housing scheme built through New York State’s Mitchell-Lama Program, is unfortunately much less well known. It’s been suggested that if Jacobs were around today, she’d be working with New York’s housing activists. When her seminal work The Death and Life of Great American Cities was written, there were almost 2 million rent-controlled or rent-stabilised apartments in New York City; nowadays, there are fewer than half that number.

Le Corbusier, on the other hand, is too often blamed for drab high-rise blocks. But regardless of how well his followers across Europe interpreted his ideas, Le Corbusier’s vision for cities was about high quality residential blocks that also contained shops and leisure amenities and were surrounded by parkland – the original mixed use development if you like. His most famous building, Marseille’s Unite d’Habitation, consisted of 337 apartments with views of the mountains and the sea together with shops, a restaurant and a nursery school. The building was originally intended to be public housing, but the French government eventually sold off the flats to recoup costs. Alton West Estate in Roehampton and Park Hill in Sheffield are just some of the examples of Le Corbusier’s influence on the design of post-war council housing here in the UK.

Building homes for a serious business in post-war Britain. Under Attlee’s 1945 Labour Government, 700,000 new council homes were completed. In 1952, the largest architectural practice in the World was at London County Council, with 1,577 staff including 350 professional architects and trainees. These were the days of consensus, and very quickly Tory governments were actually competing with Labour governments about who could built the most council homes.

Some of the council homes built post-war have stood the test of time better than others. But what’s not in doubt is that building council homes on such a scale immeasurably changed the lives of so many families in desperate need of a decent, secure and affordable home. And so many of the post-war modernist high-rise blocks so despised by Jacobs quickly took on the organic self-organising traits that she held in such high regard and have become some of the most enduring and closely-knit communities in London.

Fast forward to 2019 and Right To Buy continues to decimate council housing stock, but perversely home ownership seems more out of reach than ever for so many. An entire generation is being forced to embrace long term private ting in a country that has some weakest protections for private tenants in Europe. Meanwhile, government spending on building new homes fell from £11.4bn in 2009 to just £5.3bn in 2015 – from 0.7 per cent to 0.2 per cent of GDP – and since then, the housing minister’s desk has been occupied by no fewer than six people.


So what would a comprehensive drive for new council and social housing on the scale of the 1945 government’s efforts look like in 2019?

Lubetkin, the architect responsible for Islington’s Spa Green Estate and Bevin Court, summed up the spirit of post-war council home building with his maxim that “nothing is too good for ordinary people”. It’s a vision that we’re trying to recreate through our own council home building programme in Islington.

One of the best opportunities for small council home building schemes is to expand upon existing communities. The vast majority of Islington’s new council housing takes the form of infill, construction on existing estates; in unloved spaces, in old garages, and in old undercrofts. These projects often involve landscaping and new amenities to enhance rather than reinvent local communities. We have built community centres and even rebuilt a library as part of council housing schemes. One Tenants’ and Residents’ Association had an idea for a new specialist over 55s block for the older residents of the estate who wanted to stay in their community.

But there’s a place for large-scale place making as well. When the Ministry of Justice closed Holloway Prison and announced that the site would be sold, Islington Council published a Supplementary Planning Document (SPD) on the site. We had one aim – to send a clear signal to the market that anyone who was looking at buying the site needed to be aware of their planning obligations. Most importantly, any development on the site needed to include at least 50 per cent genuinely affordable homes. The speculation around the site came to an end on 8 March this year when Peabody Housing Association announced that it had bought it. It has committed to going well above and beyond our planning requirements, by making 600 out of a total 1000 homes genuinely affordable homes, including 420 homes for social rent. We need to see more detail on what they are proposing but this is potentially brilliant for the borough. A local grassroots group, Community Plan for Holloway, have been instrumental in ensuring that the community’s voice is heard since the site was sold.

To recreate the scale of the massive post-war council home building programmes would require a Jane Jacobs inspired level of community activism combined with the architectural idealism of Le Corbusier. But it would also need the political will from central government to help local authorities get council housing built. And that, sadly, feels as far away as ever.

Diarmaid Ward is a Labour councillor and the executive member for housing & development at the London Borough of Islington.