By Dougal Burrowes, Volunteer
Last week marked a century of council housing, as introduced in the Addison Act 1919. It paved the way for funds for local councils to build 500,000 houses in three years. Now 100 years later and Britain needs 250,000 built every year just to keep up with population growth. Yet, between March 2018 and 2019, only 169,770 houses were completed. There is high demand for housing, but simply not enough supply.
Naturally, landlords capitalise on the lack of housing, bumping up prices by a staggering 68% since 2000. This steep increase in price reflects the demand and lack of competition in the housing market.
The solution, it seems, is obvious. If the government builds more houses, then supply increases, adequately satisfying the demand for affordable homes. More supply also increases choice and competition, leading to a fall in housing prices.
Yet, unfortunately, when it comes to solving the housing crisis, there has been a consistent disparity between what local and national governments say, and what they actually do.
The Town and Country Planning Act, passed in 1947, severely restricts new builds, in areas where demand would otherwise be the greatest. This acts as a blockade to effective and widespread house building.
More recently, in 2013 the Coalition Government introduced the flagship ‘Help to Buy’ scheme. This scheme gives buyers support from the taxpayer to buy their first home. As our friends at the Institute of Economic Affairs have explained, not only does it push up the cost of home ownership, it does little to increase the supply of homes. Despite its apparent aim to “increase the supply of new housing” through stimulating “demand for new-build properties”, it does not solve the issue of a lack of housing supply.
Locally, councils have done little to reform social housing, leaving it severely unbalanced. Social housing should be a stepping stone, giving people the chance to buy or rent their own home as soon as they can. The system is designed to provide support for those who need it most and for the shortest possible time, not as a lifetime solution for tenants who can afford to move. Council houses should be a springboard for progress, with those achieving economic stability and a well-paid job being encouraged to move on to alternative housing.
Yet, with the current system, there are tenants with six-figure incomes who live in council houses in place of those who actually need it. Frank Dobson MP and former Cabinet minister lived in a council house, despite his £66,000 salary. This waste of housing and taxpayers’ money has been cracked down on by councils like Barnet, who have ended tenancies for life. Homes built with taxpayers’ money should be for those most in need of them.
Local councils have also shown themselves to be ineffective at managing properties. Our recent paper, Hollow High Streets, has shown that “at least 6,047 council-owned commercial properties were declared vacant” between January 2016 and December 2017. This not only cost the taxpayer £74,022,381 to maintain, but lamentably fails to allocate resources to those in need. As our Policy Analyst, Jeremy Hutton, said in an article for ConservativeHome, “with a high demand for housing, especially housing located close to train stations and public transport, vacant properties on high streets could be converted into housing.” This is a squandered opportunity right on many local councils’ doorstep.
As we mark a century of council housing, we must scrutinise consecutive national and local government’s lacklustre response to the housing crisis. The core of the problem is a lack of supply. National and local governments must let more homes be built. They should allocate council houses more fairly, manage their properties more efficiently, and look closely at utilising the vast number of vacant properties that could become a springboard for helping thousands of families move into those newly built homes.
Only by doing these together can we look forward to solving the housing crisis within the next century.