Why our housing crisis is NOT just down to immigration

Our housing crisis is NOT just down to immigration. It’s a complex web of human failings, political misjudgement and vested interests

Iona Bain

Post Brexit, our Great Housing Debate has changed – and not for the better.

Having recently appeared on BBC Breakfast to discuss the complex and varied reasons for the housing crisis (in about four minutes), I was struck by how much Twitter flack (twack?) I received from viewers – not about what I mentioned, but rather what I failed to mention. Immigration.

Now, Twitter’s strange allure for people who want to virtually insult and belittle perfect strangers is somewhat well-publicised. When I appear in the public eye, I accept that people will disagree with me, even if I’ll never believe that insults such as “thick bastards” are a justified part of civilised debate.

Yet I can’t let some of the criticism directed at me pass without remark – not because I desperately want to “win” an argument or defend one view doggedly but because the mark of healthy public discourse is a willingness to challenge commonly-accepted views, particularly if you think they are lazy or damaging to young people’s understanding of a knotty and all-important cause célèbre.

God knows that in an era of fake (or even just heavily partisan) news, an ever-increasing herd mentality and the tendency towards online hysteria, maybe our universal resolution in 2017 ought to be at least TRYING to keep grounded in something resembling reality.

It’s clear that some Twitter users today are evidently making it their life’s work to champion a single issue, that of restricting or even stopping immigration, such as their all-consuming belief that every single one of our economic conundrums, from the housing shortage to NHS funding, can be attributed solely to the arrival of Jonny Foreigner.

I don’t wish to argue that immigration has had no effect whatsoever and it doesn’t help that immigration has, at times, not been allowed to even feature in the debate. But the backlash against this skewed coverage can quickly turn disproportionate to its real place in our discourse; one factor among many, many…MANY!

Bringing up immigration in such a short slot, when you have to relay basic facts about the housing crisis and try to make your argument as balanced and thoughtful as possible, would not be appropriate. At what point do the sins of omission (if indeed there are any) negate the value of what you actually say? How much time would you need to explore the issues comprehensively? An hour? A day? A week? Probably a year and then some.

Here are some of the other factors that I didn’t have time to explore in my slot. Perhaps my beloved Twitter critics (Twitics?) might want to bear them in mind.

People in their 60s and 70s can remember a halcyon time when you could go to the council, put your name on the housing list and, given the right circumstances, have a reasonable expectation of eventually being found accommodation. What made this possible was the huge post-war housing construction boom.

One major influence now is our planning laws, in which all land in the country is screened off for either residential or non-residential purposes and green belt land has been rigorously protected by various bodies. Nimbyism has played a huge role in slowing down the rate of housebuilding.

Interestingly, much of the post-war housing was built by ‘direct labour’ (employed directly by local councils) and the housing was designed specifically for use by working-class people (such as the estate I live on).

A very significant piece of legislation was passed by Maggie Thatcher which allowed council tenants to buy their homes at a discount, which of course wiped large numbers of properties from the public estate, and many of these properties have since found their way into the hands of buy-to-let landlords……which means neighbours can be paying VERY different rents (private market rent and council-subsidised rent).

During this mass sell-off, it seems there was never any pretence of replacing the sold-off properties with new ones and gradually direct labour forces were wound down. So now, it is almost completely down to the private sector to provide new houses, including the legally defined “affordable” homes built by housing associations.

The large housebuilding companies own vast swathes of land which is zoned for housing. In a practice known as land banking, developers will only build on that territory when a profit can be made, as they are only accountable to their shareholders. In what amounts to a great big cartel, house builders restrict supply and keep prices up – a status quo further exacerbated by planning issues.

One of the unfortunate side-effects of all this is that housing developers concentrate on building what sells best – not what is most needed – hence the absurd situation of empty luxury homes in areas with a great shortage of affordable family housing.

Even in living memory, there has always been a shortage of housing because we live on a small and crowded island. Yes, it’s fair to say that supply has not kept up with the level of immigration in recent years – net immigration is around one million over past three years and we haven’t built a million new houses.

But it’s important to note that, just as immigrants tend to do the kind of jobs British people don’t want to do, they are also prepared to live in the kind of accommodation British people would not put up with, and endure excessively long journeys to work into the bargain.

Furthermore, cutting off immigration tomorrow would have severe consequences for our modern British economy, which has been built on the backs of cheap foreign labour (wrongly) and has opened its doors to a plethora of enlightened, culturally rich and hardworking talent across the world (rightly). Whether you believe that mass immigration has enriched or damaged the country is actually irrelevant at this stage, such is the Pandora’s Box of free movement which cannot be necessarily be shut again (even if we do leave Europe). Apart from anything, too much British business interest resides in keeping that channel of labour firmly open.

So yes, we have high levels of immigration and not everyone is happy about that. This issue is getting plenty of airtime now without the need to bang on about it in the context of housing. What I wanted to focus on is our historic and ongoing failures to tackle the housing shortage, some of which could actually be remedied by concerted and brave government action. Now.

To shirk from that second conclusion? Now, that would be the REAL disservice to young people everywhere who need affordable housing, in all its definitions.

This Post Has One Comment

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    benjamin weenen

    Unless freeholders pay compensation as tax(rent) to those that are excluded from valuable locations, then the market cannot match supply with demand. Causing excessive vacancy and under occupation. No one can therefore say if the UK currently has a shortage of housing.

    Furthermore, the value of this privilege is then capitalised into rental incomes and the exchange value of freehold titles, increasing average selling prices by 200%.

    Because of this, there is a net transfer of wealth from those that own little or no land by value, relative to the taxes they pay, to those where the opposite is true. Typically from the young/poor to the elderly/rich.

    The failure to share the scarcity value of natural resources equally, principally that from locations, is a great economic injustice with some dire consequences. Of which affordability issues and excessive inequality are but two of the many symptoms.

    Simple calculations show that a 100% Land Value Tax would result in the disposable incomes of typical UK households rising by over £10K per year. When allied with a reduction in house prices to their capital only constituent, housing affordability, as measured by a ratio of discretionary incomes, improves by a factor of four for that typical household.

    There is a similar improvement in affordability for those that rent too.

    Building more house in order to marginally reduce selling prices will increase costs and do little address the underlying problem.

    A 100% LVT would reduce selling prices by third thirds, reduce costs and end economic parasitism at source.

    There is no “Housing Crisis” in the UK, as in a shortage of housing. We have a crisis of economic justice, that only benefits a minority of interested parties.

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