Monday, 21 November 2011

Government housing policy is failing the people of Cornwall

Today the Coalition government has announced it's own policies to solve the housing crisis, the BBC news site leads the story with the title Affordable Home Shortage: Government to reveal plans. First of all we must congratulate the cabinet of millionaires, for realising that housing is problem and restarting the debate over what can and ought to be done. Unfortunately the government has announced plans that offer the same old broken Thatcherite policies that have caused this generation, my generation, most of the problems. Typically for this right wing government it involves free market solutions and is more about bumping up developers profits than the genuine needs of the people and solving the housing crisis.

Yesterday at the Mebyon Kernow conference hours were spent formulating MK's policy toward housing. We recognise as a party that the people of Cornwall are being failed by housing, that the state whether it be in London or Truro are not doing enough to confront the housing crisis. We recognise as a party that decent affordable housing is something that Cornwall needs, it is our collective belief that the other political parties have failed to grasp the problems and in most cases are making the problems worse. We recognise collectively as a party that we need to lobby, work and hopefully in office, after the 2013 Cornwall Council elections, implement policy that will serve to rectify the housing problem, that will put the people of Cornwall first.

The new government scheme is titled the "Get Britain Building Fund" and will involve £400 million of taxpayers money. It must be noted that this is not a great deal of money for the whole UK, as such don't expect a great deal to be done here in Cornwall but nevertheless this is the money available. The plans are to inject this money into the construction industry to 'kickstart building', in other words to give money to private enterprise and big developers to build houses and continue existing stalled schemes. As a small sop to the actual problems and to gain favourable headlines there will be (as the BBC quotes) "a commitment to affordable homes", it goes on to state:
It is hoped that about 450,000 mainly affordable homes will be built by 2015, many of them on publicly-owned brownfield sites.
Will this be enough? no and here's why. Look around Cornwall today nearly every part of our fair land has had developer led new estates built, the number of affordable units are not nearly enough as the long Cornwall Council waiting list (17,500) shows. The number of young people and young families (and indeed not so young families like my own) that desperately want to own their own homes and are priced out of the market at the moment is staggering and goes to show that letting developers build everywhere does not solve the problem. Developers want to make profit, affordable (cheap) homes are not as profitable as 'unaffordable homes', there's no money in it for them. Thus the majority of newly built estates are 85-95% unaffordable, with the small minority of houses actually cheap enough to help with the housing problem. Time and again we see a new estate built a major impact made upon a community and it's infrastructure and dozens unsuccessfully applying for the handful of affordable homes.

A strong message from the MK conference from both leadership and the floor, was that councils here in Cornwall should be given the funding and borrowing powers to build social housing to directly address the problems here in Kernow. That this housing should be built for local people who need to be housed and at the moment are being failed by the expensive free market solution. The council would then rent out this properties and reinvest any revenue raised into creating more housing stock. That is to say that the state, the public sector, takes responsibility for housing and it is no longer in the hands and whims of developers who want only to make profits. That the poorest, the most vulnerable and the most needy are helped not for profit but because it is the right thing to be done.

Alongside the government policy of writing cheques for private developers they have resurrected the very problem that has beset this generation, the Thatcherite right to buy policy. Again people in publicly owned social housing will be offered the right to buy their home at as little as half the market value. We are told this money will be reinvested in more social housing as usual the governments mathematics here is off and I might suggest to them that policy formulation should leave out the Thatcherism rhetoric and instead include a calculator. For even if we leave aside the rising cost of building, selling one home at half the market value will result in the money to build half a home, halving the housing stock and leaving a poisoned legacy for the next generation. The government fails to grasp such basic things in it's quest to sell things off and absolve itself of any responsibility for the common good. This policy in the eighties has already resulted in the social housing stock in Britain shrinking, it was the start of the unaffordable housing crisis in the first place!

I am sure after long debating about housing yesterday I can sum up the mood of Mebyon Kernow members and what our advice to the government is. This government needs to abandon the old privatisation policies of the past, selling off publicly owned housing is a short sighted solution, developers can not be relied upon to build houses for the common good. The only way to build houses to deal with the problems of affordability is be building them and renting them out on a not for profit basis. Existing housing stock needs to be added too not sold off. This money available should be given to local authorities (in the vein of localism) to build social housing designed specifically to deal with problems in local areas. It ought to be used to build decent housing to provide people with well insulated, green homes, it ought to offer them solar panels and other measures to help with fuel poverty. Cornwall needs a proper solution to the housing crisis, the people need better homes, Mebyon Kernow is fighting for this.


  1. Good piece. It's also worth mentioning the *quality* of the few affordable homes that are actually built. In Camelford, where I live, there has been massive building over the last few years, and the new estates have been a mix of private, full-price accommodation and 'affordable' housing. The affordable builds are almost exclusively 'starter' homes - two up, two down, with living rooms so small you cannot get a sofa, one armchair and a telly in them without blocking an exit. The way developers fudge the percentage of affordable builds the planning permissions require is to double up builds on the same plot, or squeeze three builds from two plots. Consequently, houses are so small that people in Camelford are turning new 'affordable' builds down and staying in council/private rented housing.

  2. Thanks for the comment Jim, small houses is not something I touched upon unfortunately but you're write to mention it. This is again the essential problem with looking to profit making enterprises to solve the affordable housing crisis. As is clear the problems with housing are very diverse and need to be addressed properly.

  3. hi

    this is nisha

    Thanks for sharing good article.. I have been looking information about the Government housing policy is failing the people of Cornwall
    .This discussion has solve my concern...I an very grateful..


  4. I would like to know what everyone thinks is the price of an affordable home. Surly it's not £184,000 for a 2 bedroomed property as it is at St. Mabyn?!

  5. That's ridiculous Nick, unbelievable. 184 thousand! Put it this way i couldn't afford that and I wouldn't pay that for a 2 bedroom house even if I could. Abuse of the definition of affordable needs to be rectified and I can tell you was a big talking point at the MK conference and something as a party we will resolve given the chance. Thanks for commenting.

  6. There is a massive shortfall in affordable homes and yes, unless the government makes plans to rectify this (and the new £400m investment will not be an adequate long term solution) then the housing crisis is likely to deepen. Recent planning reforms may make it easier to get developments passed, but Jim's right, the builds that do get passed need to be genuine affordable homes, not expensive new estates with a scattering of affordable homes built just to fill a quota.

  7. An excellent article, it raises lots of significant points on the housing issue. We too in South Wales have very similar issues with affordable housing & social housing, which seems to go hand in hand with low paid and low skilled jobs.
    It is a difficult quandary to address in a fair and decent manner, for instance; Swansea has a significant amount of Social Housing on its books, however the local authority has little money to maintain the current stock in a decent and reasonable condition for human habitation. So an issue that could arise from "government" built social housing, do they have a budget to maintain the properties for the next 50-100years?-As we know houses are always in need of repair!
    As some of the other comments have alluded too, how can low paid workers afford extortionate mortgages? -if the bank will lend you the money in the first place!
    I've been trying to consider some possibilities for a solution; The government creates an artificial housing market devoid of market forces.Government purchases land, then for each housing development built the government give the developer x-amount,(value of property + number of properties+25%) however the government impose strict regulatory and finical constraints (maintaining high building regs and standards)on developers for 3-4 bedroom houses for <£100,000 and the nationalised banks be forced by government to provide low interest mortgages say fixed for 20years to low earning families combined incomes <£30-35,000. So essentially you are buying your house off the government not the developer, they walk away with some profit, people get affordable mortgages and homes.
    A bit fanciful I know but just trying to think of a pragmatic solution! Maybe an idea that can be developed????

  8. A simple truth is that housing prices are, alongside credit availability as recent years have taught us, a supply and demand issue.
    If you build thousands of new homes in an area the value of existing homes fall.
    Home owners are more likely to vote than the young and dispossesed, particularly for one of the political parties.
    Therefore what local/national politician is likly to shoot themselves in the foot by agreeing lots of new (in my mind needed) homes, lowering the values of exisiting voters homes,alienating them alongside the various nimbys etc etc.

  9. @Steve agreed there needs to actually be root and branch reform of what both affordable is and what standards it has adhere to. This adherence in my opinion has to come from legislation and actually be enforced. (Again something MK is committed to do)
    I also agree with your general point 400 million is not a great deal of money and I would question when it's all distributed if it's enough to have leverage over profit hungry developers. I don't think this is enough money and more fundamentally I don't think throwing money at the problem is enough it's far too simplistic for what is a complex problem. This complexity is made worse by the fact the problem is different in geographical areas, here in Penzance we have different problems to say Sennen a dozen miles away. That's before you consider what's right for London compared to Rhyl etc.

    @Chris I agree with you the free market is a big problem. Developers exist to make a profit rightly or wrongly this is a fact and selling houses at low prices is not compatible with free market capitalism in my opinion. Which is why you have the situation were unchecked they build 180 thousand pound houses and call them affordable. I agree with you the state ought to intervene, there are two choices then subsidies for developers to build and sell houses or house building by the state I prefer the latter.
    Maintenance great point I actually really like your idea, can't say much more than that.

  10. @anon I'd question how the supply and demand logic applies particularly here in Cornwall. I can't quite the figures exactly offhand but the number of houses built over the last thirty years has been a growth never before seen in Cornish history yet this has not resulted in a fall in house prices, which have outstripped wage levels year on year. This runs contrary to standard economic theory. But building houses has neither decreased the price of houses nor reduced those homeless, in unsuitable accomadation or on council waiting lists.
    I do recognise the truth in developments being unpopular, nobody wants to sacrifice their views of countryside for houses and roads. Like you say no right minded politician thinks lightly of supporting suburbanisation of green fields.

  11. You are right Rob, the amount of homes built over the past 30 years has risen sharply, however this period has also seen an even more massive relaxing (until recently) of lending rules and the huge rise in availability of financial products aimed at buy to let etc.
    The ceaseless promotion of profit through housing purchase on TV, (something that strikes a chord with our base instinct to nest it seems) and the choir of vested interests of the mass of people whom profit from these transactions has also had an effect. This has mitigated the effect of increased supply of homes by increasing (by an even larger amount) the supply of available customers. Therefore the supply did not keep pace with demand (legitimate demand where the ability to pay due to 125% mortgages et al). Wages are less inportant, although closely link than the ability to pay via credit.
    I grant you that Cornwall is a special case due to its desirability but we have to bear in mind property's role as a handy tax efficient store for capital in recent years)

  12. That is a very good point anon, can't really add much to what you've or disagree with it. Makes me wonder whether government underwriting mortgages will have the effect of making this problem worse. Surely will free up lending to continue to artificially push up prices.