Stopping councils from building houses hurts us all

housing_completions_GDNThis graph from Monday’s Guardian tells you most of what you need to know about the housing crisis in the UK. It tells a simple but very sorry tale.

Nothing much happened to private sector housing completions for thirty years, at least until they fell off a cliff after the 2008 crash. Housing association building remains an insignificant part of the picture. What really matters is the complete collapse of council house building since the 1980s. This has been a disaster, and not just for potential council house tenants.

The boom in house building during the 1950s and 1960s (which ensured for the first time in our history that most people could spend their lives in sanitary housing conditions) was a highly effective partnership between the private and public sector. Very crudely, the councils built for renting and the private sector built for buying (it wasn’t entirely true – I was brought up in a house built by the GLC for sale as part of its “overspill” policy of encouraging people to move out of London). This ensured there was a plentiful supply of affordable housing for renting and kept the lid on house prices even while incomes rose.

This is why so many middle and even working class people were able to buy their own homes in the 1960s and 1970s, without getting into silly amounts of debt. These were the golden years when working families, if they were in secure employment, could buy the sort of reasonable family home that only millionaires can afford in London today. There was plenty of housing about and plenty of ways to put a roof over your head: council flats and houses, private landlords, rooms to rent, bedsits – we were providing houses of all shapes and sizes for families of all shapes, sizes and means.

Far from “crowding out” private investment in housing, or making people “reliant” on the state (as if people don’t have minds of their own), council house building was the reason people could afford to buy their own homes. Council development stimulated private development. There is no evidence from this data that the private sector is capable or willing to respond to today’s unprecedented demand for housing: the long boom in house prices which began in the 1960s has had no net effect on private housing completions at all, even from the 1980s onwards when private developers no longer had to compete with councils for tenants and buyers. It’s a dismal market failure.

If we want affordable housing to buy, we have to have affordable housing to rent, and that probably means council housing. That means lower rents and lower prices. Of course, people who are relying on property hyperinflation to fund their retirement won’t like it. But at least they’ll still have a roof over their heads.


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