It's time for a fair, just and sustainable housing system

In 2014, the UN Special Rapporteur on Adequate Housing, Raquel Rolnik, visited the United Kingdom. Her findings made for grim reading. House prices had increased by 200 per cent between 1997 and 2012, while median full-time earnings rose just 55 per cent. Private rents had risen, even as social housing provision had been eroded. With homelessness on the rise, the fifth richest economy in the world was failing in its obligations to protect the human right to adequate housing. Little has changed since. 

The last 50 years has seen a series of measures and practices introduced which have pushed up house prices while reducing the stock of available, affordable housing. How did we get here?

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Social housing was sold off en masse at below market rates in the 1980s, and most of it was not replaced. At the same time, strict controls on bank loans were removed and the building societies were allowed to turn themselves into ordinary banks.

All this meant that credit became more easily available, making it much easier for the average person to secure a mortgage. With mortgages more readily available than ever, the pool of potential house buyers increased far faster than the supply of new housing, pushing up prices. And with the removal of rent controls in the 1970s, many more wealthy homeowners were hoping to make a quick buck by becoming landlords.

As house prices rose to meet all this new demand, people started to believe that investing in housing was a one-way bet, so they jumped on the bandwagon too, pushing up prices further. But when lending started to dry up, demand levelled off, and so did prices, giving us the housing crash of the early 1990s. It wasn’t long, however, before the party started up again. This time, banks came up with ever more ingenious ways to convince themselves (and the regulators) they could continue to increase their lending forever, with disastrous consequences.

The impact of a system that places the needs of investors over those of ordinary people has become very clear during the pandemic.

The impact of the financial crisis on the wider economy has been much commented upon, but we don’t often discuss the impact it had on the housing market – perhaps because it didn’t seem to have much of an impact at all.

House prices fell a great deal during the crisis, but they quickly recovered. This September, house prices rose at their fastest pace in 16 years, reaching record highs by the end of the month. Home ownership has now been falling for many years, even as private rents have increased, and social housing continues to be sold off on the cheap.

The reason for all of these interrelated problems is that our economy treats housing more like a financial asset than a roof over one’s head. You can borrow money against the value of your home; you can take out a buy-to-let mortgage to invest in a new home; even your pension pot could be invested in property via a vehicle like a Real Estate Investment Trust. All this means that our housing system works in the interests of investors – be they massive asset managers like Blackrock, or just plain old pensioners with a buy-to-let flat in London – rather than occupants.

The impact of a system that places the needs of investors over those of ordinary people has become very clear during the pandemic. Landlords have been given breaks on their mortgages and billions of pounds have been made available to banks and investors, while tenants have been let down. Those in the private rented sector were assured that evictions would be banned during the pandemic, but the evictions ban is ended just as we entered the second wave. Many charities have warned that we’re sleepwalking into a massive evictions crisis.

If we want a fair, just and sustainable housing system, we have to break the power of banks and investors – and to do that, we need a movement. Private renters are increasingly coming together in tenants’ unions to protect one another from the looming evictions crisis – it is critically important that the rest of society supports these movements. Only by working together can we build a society where no one is left out in the cold.