The question of tenure? – owner-occupation and renting
Introduction
This module looks at different forms of tenure and how the issues of ownership of property are deeply embedded in both culture and politics.
Margaret Thatcher PM is rightly famous for declaring that ‘Britain isa property owning democracy’. Property owners are not only in the numerical majority but also have agreater propensity to vote. There should be no surprise that Government policy tends to reflect their interests. Another Thatcher quote from 1986 was that in her eyes of a man (sic) of 26 who finds himself on a bus (and not in a car) should regard himself as a failure. A council tenant would similarly qualify as a failure when not being upwardly mobile and acquiring a propensity to vote with other property owners
Twenty years later George Osborne made a conference speech in October 2007 which was seen as a factor in the postponement of an election in 2009 and of Conservatives winning of the 2010 election, saying, ‘Well over a third of homeowners in Britain have the threat of inheritance tax hanging over them. People whose only crime in the eyes of the taxman is that, instead of spending their savings on themselves, they wanted to pass something onto their families.… aspiring to a better life for their children and their grandchildren.’ He described inheritance tax as the most unpopular of all British taxes and proposed raising the inheritance tax threshold to £1 million. Gordon Brown as Labour Leader (and PM) was sufficiently disconcerted as to promise to raise the tax threshold. However, George Osborne in office has left this tax alone despite the urgent need to fill the public purse. Of course the family home is the main asset liable for this tax which makes the revenue so valuable to the Treasury and housing being so political and change so problematic.
Owner Occupation
Owner occupation In the UKhas been over 50% for many decades and approached 70% at the end of the Thatcher’s term in office, and the promotion of the right for council tenants to buy their house with an attractive discount. However, currently at 65% (and going down) the figure is significantly lower than the 90% who say that they aspire to owner occupancy. The reason for the decline in home ownership is an increase in private rentals. Ironically, part of this growth is in the number of houses previously bought by council tenants that are now rented out by private landlords to those who cannot afford to buy.
In 2014, coming towards the end of a Conservative led coalition government the propensity of home owners to vote for the Conservatives could have been behind recent policy. The Prime Minister has introduced a higher discount to potential purchasers of social housing, housing land supply has rarely been out of the headlines, and developers are being released from the obligations to provide social housing where the development of market housing has been jeopardised for financial reasons. The Chancellor has also got into the act through introducing demand side policies; Help for Lending designed to encourage banks and building societies to lend to builders and buyers, and Help to Buy designed to assist house purchasers experiencing difficulties in raising the necessary deposit. Whilst this course cannot analyse every cycle in the housing market, it is becoming reasonably clear that in certain regions of the country this form of assistance on the demand side would lead to inflation, if not a bubble, if not matched very closely in the supply. In fact, continuing delays in supply, partly due to the caution being shown by housebuilders surviving from the previous recession, but also shortages of labour and materials, has meant that supply has not reached 50% of the 240,000 units that the Government has been advised should be provided.
Affordabilityand house price inflation was a concern to the new government in 2010 prompting the Housing Minister (Grant Shapps MP) to refer to the advantages of lower prices, but unable to ignore the benefit of house price inflation to most of those voting for his party. If house prices cannot be allowed to fall then the only policy available is to provide assistance to potential purchasers.
The planning system has become the main target of politicians and also think tanks (e.g. Policy Exchange) for limiting supply, possibly overlooking the other reasons why developments with planning permission (approaching 1m in 2014) are not being implemented. For many years the Government has relied upon the development of market housing for the provision of social housing; policies requiring between 25 and 50% of units to be in the latter category. When viability is jeopardised this proportion is lower. So when the supply of private housing slows so does the provision of social housing. In fact, some developers are now moving into the market of “build-to-let".
There are other factors working in the area between owning and renting. The increase in the number of renters unable to raise the necessary finance (including deposit) to become owners, increases the pressure on properties available to rent. This increases the level of private rents and reduces the ability to save for that deposit. The average age of first- time buyers is around 37 years. Even allowing for the fact that some first-time buyers are much older, being the result of a marital separation in later life, the consequence of waiting to own a house before starting a family (see Jilted Generation 2010 Howker E & Malik S Icon) can have a serious impact on relationships.
In later life, home ownership becomes another major issue. The main property (and sometimes a second home and/or a buy-to-let) often represents the larger part of savings of an individual or couple. Private pensions, where they exist, are less trusted and less substantial. In the circumstances, members of the property owning democracy are unlikely to be very unhappy at the forces which maintain house prices (limited supply and parents helping children to buy at current market rates), or with the assistance of planning policies which seek to prevent harm being caused to existing houses - spoiling the view or outlook. Many if not most house extensions are added by those wanting to increase their pension pots rather than in any need of extra space (often quite the reverse).
Council and/or social renting
Until the 1980s public housing was provided by local authorities. The first council estate appeared in London at the beginning of the 20th-century at Boundary Estate and Pimlico. The very large numbers of houses built in all parts of the country in the years of following World War II were mainly the result of councils being proactive. Starting in the 1960s their efforts were complemented by the development of new towns by development corporations providing a mix of houses for sale and rent.
The Thatcher government introduced a policy whereby council tenants could vote to have the management of their properties handed over to housing associations. In many cases these “stock transfers" were made to housing departments given a new legal status and identity. There are still a number councils that retain the powers of a housing authority. Housing associations or registered providers operate across administrative boundaries but house tenants nominated from council waiting lists. They also charge ‘affordable rents’ , currently between 60% and 80% of market rents.
Council housing has a number of physical and social/cultural connotations. The Parker Morris Committee produced a report in 1961 Homes for Today and Tomorrow which led directly to the adoption of standards of toilet provision, size of rooms, storage capacity and adequate heating. In many cases these exceeded provisions in both the private sector and in older housing stock. Council houses were often provided with more generous gardens and public landscaping than in private developments.
However, these advantages were rarely if ever seem to compensate for some of the social stigma attached to council housing, particularly on some of the larger estates and, latterly, including problematic high-rise flatted developments.
The culture of council housing has been graphically described by Lynsey Hanley inEstates: an intimate history (new edition 2012). Granta. This commentary on what has been a relatively hidden world is a valuable resource and has created a reputation for the author as a leading authority on the subject.
She says that, ‘…the phrase “council estate"… Is a sort of psycho-social bruise : everyone winces when they hear it. It makes us think of the dead ends (in terms of lives as well as roads), stereotypes, the absence of escape routes. It makes us think of bad design, identical front doors, windswept grass verges, and the kind of misplaced optimism which, in Britain especially, gives the individualistically inclined an easy way to kick social democratic values. Council tower blocks had their appalling reputation sealed by the collapse of Ronan Point (see earlier module), a newly built high-rise in east London, in 1968. Large-scale estates… are associated with the folk memory of the breakup of extended families, but also with childhoods spent running free, perhaps too free, in what used to be the green belt.’(px)
The most important aspect of this form of housing is the absence of choice. Many tenants were relocated to council estates from the clearance of inner-city slums. Even without Parker Morris standards, the physical quality of this housing was very superior, especially in terms of damp proofing and heating.
Hanley goes on, ‘Any government spending or any attention paid to, people living on council estates was conditional on them behaving well. Doing the right thing and playing by the rules in order to deserve a Labour government’s munificence. ‘. The cost of welfare, of which housing benefit is the largest element, is and will remain a very political and contentious matter. A Conservative led coalition has found it to be politically productive to identify and conflate scrounging with access to social housing. This is despite the fact that a very large proportion of social and private tenants actually work.
The psychological experience of being brought up on a council estate is described by Hanley and attributed to her neighbours as “the wall in the head", ‘…which they've never quite escaped, despite most having experienced upward social mobility…’,including moves into the private ownership or rental sectors. Hanley claims that a political party is cautious about supporting social housing “…for fear of appearing to reward fecklessness. Only the lazy, unmotivated and hapless and those too dysfunctional to be counted as full citizens.”
Hanley’s personal experience of council housing was of the Wood Estate built on the periphery of Birmingham in the 1960s and housing nearly 60,000 people. It was one of the biggest council states in Europe. Her sense that the development of this size ‘…didn't feel like a town…’ has a resonance at a time when new settlements and urban extensions of vying for precedence in government policy. This debate includes the comparisons between new towns with their attempt to balance housing, jobs and facilities, and peripheral estates where the need to provide housing suppressed the ability or willingness to add social or economic infrastructure.
Council estates are the main location of the 50% of ‘poor’ home owners (those with incomes less than 60% of the median average) having exercised their‘right to buy’, but not having seen the need to move away. These cases demonstrate that lifestyles need not change with tenure. However, the consequences of staying put are non-trivial. In 2001, a man could expect to live 71.4 years and a woman 77.6 in Solihull whilst on the Wood Estate they could expect only to reach 61.8 and 66.1 respectively.
The writer in Hanley the former Council tenant has provided some graphic descriptions of her previous existence and scarring. ‘Council housing was never intended to be holding cages for the poor and disenfranchised, but somehow, that's how they ended up. The alternative view (typically that of the rich) was precisely that council housing was a holding cage. The rebuilding of failed estates would be a waste of taxpayers money, because “they"-the dregs, the scum--will only go and have more babies, smoke more fags, fry more chips and set fire to the whole damn place when the lit match hits their shell-suit.’
Hanley cannot disguise the way she identifies with her former neighbours: ‘If the lumpen working class is contained in places where no one else dares to venture, their children attending schools that no one else in their right mind would allow their own to attend, there is surely no obvious problem. … For today's middle-class, contamination is the fear that dare not speak its name.’ She explains that ‘…Estates is an attempt to work out how much of the stubborn rigidity of the British class system is down to the fact that class is built into the physical landscape of the Country.’ This makes it an important book in the discussion of housing tenure.
Having kicked off at the turn of the century, the first wave of mass council housing came after WWI providing “homes fit for heroes". Hanley sees the end of WWII as ‘…another [missed]chance to build a classless infrastructure-literally, to build social iniquity out of the landscape.’. Not all, ‘Council housing was distinctive and distinctively worse in the form of construction and materials not to mention the design of the public space.’ , due to the application of Parker Morris but Hanley might not be sufficiently aware of the cheap-skating taking place in the private sector. Council housing in the 50s was often set out at low densities; large gardens at the back to provide opportunities for growing fruit and veg and wide verges at the front. That these areas could soon turn to litter and mud when used for parking and car repairs created an impression of neglect, compared to neat hedges and fences in more private areas..
Given the prevalence of council and now social housing that will continue to play a substantial role in housing provision,it is surprising and disappointing that there are not other voices from Hanley’s side of the fence. When considering the views of Owen Jones another commentator on class divisions it is Hanley again who has some useful insights in her review of Jones’s 2011 book Chavs: The Demonization of the Working Class Verso. Picking up on the term “chav” Jones says that, “..the word's etymology is contested: some accounts associate its origin with chavi, a Romany word for "child" or "youth", which developed into "charva" – meaning scallywag – used for a long time in the northeast. Others treat it as an acronym for "Council Housed and Violent" This conflates behaviour, considered by the predominantly property owning middle class to be beneath them, and the claim that, “British society has become ever more segregated by class, income and neighbourhood.”. The reference to neighbourhood comes from an understanding of the importance of place and the scarring of a council house/estate upbringing.
A not dissimilar discourse was constructed around the Channel 4 documentary Benefits Street (shown in January and February 2014) where the view of dependency on welfare benefits was narrowed down to one street. This story played to an audience wanting to see how the other half lived, in this case the ‘other’ could be living very close indeed in terms of actual distance but very far away in terms of lifestyle and aspiration. As Hanley said, one of these divides is in terms of life expectancy, which can vary by ten years or more between adjacent neighbourhoods or even adjacent streets. Little of this discrepancy can be attributed to the physical quality of the houses/flats.
Jones sees significance in the way different people living in council housing reacted in 1980 to the introduction of the "right to buy" policy. Their decisions would have been partly a reflection of individual circumstances and partly a reflection of their broader outlook. Some council tenants thought the idea of home ownership was wonderful, or held it as an aspiration for the longer term. Still others were concerned only with the practical elements – could we afford to replace our own boiler? Jones finds himself more on the side of those who found the idea ‘repellent’ and saw it as a deliberate attempt to break up communities which, he argues, was calculated to ‘undermine working-class solidarity’.
Hanley gets back to basics in arguing that, ‘Housing is society's fundamental building block. It's completely defining.… But a traded commodity… Space in which people reside… The focal point for narrative of their lives… Shelter, security… a bedrock of certainty in an uncertain world.’ More, therefore than bricks and mortar, or even a pension pot. And the experience of moving house is seen as equally if not more stressful than separating from a partner.