How I learnt to stop worrying and love affordable housing

The notion of British eccentricity is one of our chief global exports.

And yet, while the world beyond our shores delights in the oddities of Mr Bean and Doctor Who, they are also perplexed by our penchant for separate hot and cold water taps, warm beer, wet weather and dry wit.

However, of all our national idiosyncrasies, our attitude towards housing must surely rank at the top. Unlike on the continent, where long-term renting is a perfectly acceptable if not morally virtuous form of living, an Englishman’s home is not just somewhere to rest his head, but his castle.

Our domestic bastions are usually replete with both a separate front and back garden, which serve very precise and distinct functions. The back garden is protected with fences high enough to ensure that we can see only our neighbour’s head, nothing less nothing more. Conversely, the front garden is usually protected by an impotent two-foot-high barrier, which enables our neighbours to see that we indeed have our affairs in order, while also clearly delineating where our kingdom ends and the Queen’s begins.

Given our collective idolatry towards homes and home ownership, the notion of ‘affordable’ housing seems just as peculiar and oxymoronic as that of ‘affordable castles’. The concept implicitly assumes that normal houses where, you know, normal people used to reside, are not within the reach of normal people and so by definition are no longer normal. Furthermore, it’s somewhat disheartening to imagine a society where the government pledges to spend billions of pounds of tax payer money to provide affordable food, clothes, or phones for normal people.

As advertising executive Rory Sutherland remarked in a recent Spectator article, one of the benefits of capitalist societies is that although income and wealth may diverge between the richest and poorest, the gap between the actual living standards and access to high-quality goods between the proletariat and the elites narrows. For instance, in 17th-century England only the landed gentry could afford what are now basic goods such as pineapples, blue coloured fabric and obesity. However, in the 21st century most people in the UK can comfortably afford an iPhone, which is pretty much the best phone money can buy whether you are a member of the royal or Royle family. Sure, President Trump could (and probably would) buy an offensively expensive gold-plated version, but this would not make it a better phone.

However, the types of homes we live in has not followed this same trend, and owning a standard home is becoming the preserve of a smaller and smaller privileged cadre. Of course, one key reason that house availability has not followed the same pattern as other goods and products is that houses are not simply goods or products, but an asset and investment. In this sense, an Englishman’s home is not solely his castle, but also his agricultural estate, of which he expects to reap a lucrative harvest of equity and cheap debt.

However, a record high number of people are giving up on ever owning their own home. Only 43% of those aged between 20 and 45 are putting money aside for a deposit, according to the Generation Rent report from Halifax. This is not surprising as average house prices in England and Wales are now over nine times average earnings, compared to only 6.5 times in 2002. The figures for London are more stark, with the average home costing over 14 times more than the average annual wage.

Many would argue that we simply need to get over our unhealthy obsessions with being lord of our own domestic chiefdom and instead embrace a post-ownership society, whereby we live by a sort of residential subscription service, as we now do with our movies, TV shows, mobile phones and data storage. And while the rental sector is important in its own right, with an ageing population, record levels of household and government debt and an increasing pensions deficit, it’s important that more and more people get on the housing ladder in an affordable and sensible manner so they can start accruing equity over the course of their lives. This is, of course, unless the government wishes to face a calamitous welfare burden in the not too distant future. With access to finance at record lows, and house prices gradually leaving the stratosphere, the provision of affordable homes is arguably vital for the continued health and wellbeing of both the population and the economy, despite my previous reservations towards the concept.

This view is shared by the government who have recently announced an extra £1.4bn of funding available to housing associations and councils to build 40,000 additional affordable homes by 2021. This is in addition to £4.7bn already earmarked to deliver at least 135,000 shared ownership homes, 10,000 rent-to-buy properties, and 8,000 homes for supported living and older tenants.

However, solely throwing money at the problem is unlikely to solve the issue, as in practice the provision of affordable homes has long been a zero-sum game between local government and housebuilders, whose conflicting incentives often result in zero-sum housebuilding. Developers are understandably keen to reduce the percentage of affordable houses to the lowest levels possible in order to maximise the profits and appeal of their sites, while councils are under pressure to ensure that all new developments provide an adequate proportion of affordable housing, unless this unduly affects the financial viability of the scheme in question.

However, many councils have taken a pragmatic approach by lowering targets for the proportion of affordable housing per development, in return for concrete commitments from developers to start building. For instance, mayor of London Sadiq Kahn – who originally ran on a platform promising that 50% of all new homes in the capital will be affordable – has now guaranteed that developers who agree to a lower figure of 35% will not have to disclose the profits they expect to make, in addition to being exempted from submitting expensive and time-consuming viability assessments.

Although many critics have argued that this approach unduly benefits the profit margins of developers, it’s worth bearing in mind that just 13% of the new homes approved in London in 2014/15 were affordable, down almost a third from 2007/08. A brick on the ground is worth two in the planning process, and although it not yet known if such approaches will lead to a net increase in both ‘normal’ and ‘affordable’ homes coming to market, what is clear is that if more homes that normal people can buy are not built, an Englishman’s home will truly be his castle – that is rare, unobtainable and largely existing in the realm of fantasy.

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