There’s so many big topics here it’s difficult to do any of them justice. I’m going to pick up on the housing crisis here. For those who are really interested in it, I’d recommend a book called All That Is Solid by Danny Dorling, which covers the topic really well.
The way the housing crisis gets presented to the public is often very one sided. Property developers donate a lot of money to political parties, and in particular to the Conservatives. A big percentage of politicians make money from the property sector, as do a lot of people in the media. I wouldn’t see myself as being a conspiracy theorist, but I’m sceptical that the government would want to make house prices more affordable, when so many of their own members make a lot of money from property.
There’s a lot of reasons why we’ve ended up with this property bubble, where land values keep on going up. It’s made housing a lot less affordable while a minority of people get very rich on the back of it.
1. I don’t have a problem with people coming over here to work, but a lot of property, particularly in London, has been bought by international investors and oligarchs. There are big blocks of apartments that very few people live in.
2. Some parts of the UK have a lot more job prospects than others. There are places where land values are incredibly high, but there other post industrial areas with high unemployment, where there’s a surplus of housing with lots of derelict properties.
3. London has much higher wages than the rest of the UK, but also much higher property prices. There are quite a few people with a main home in the country and a flat in London, that they use in the week when they’re working. In the UK the average commute to work is a lot longer than in most other countries.
4. There’s a growing number of people with a main home and a holiday home. Because property prices keep on going up, people are more likely to buy holiday homes, because they can also be an investment.
5. Under the right to buy a lot of social housing has been sold off. Councils now end up renting social housing from private landlords, which has helped to push up property prices.
6. People are living longer, and the elderly are sometimes reluctant to downsize, meaning we end up with large houses with one person living in them. I’m not saying we should force elderly people out of their homes. I don’t think we should.
7. The divorce rate has gone up, meaning there are families who previously had one home that get split between two.
8. Because property prices keep on going up, more people are buying property to rent out.
9. One of the solutions that governments have used to fight the housing crisis is to give grants and interest free loans, particularly to first time buyers. These schemes are often abused, and simply push up prices further. Normally there’s an element of supply and demand. If no one can afford something, the prices start to come down. When house prices have started to stall, the government and banks have simply lent more money and allowed people to put down smaller deposits.
What we’ve ended up with is a situation where property is very unfairly distributed. A lot of people have multiple properties and a lot of other people can’t afford to buy one. To borrow Dorling’s analogy, if the wealthy bought up all the food and then sold it to the poor at greatly inflated prices, there’d be an outcry. But when it happens with property, we just accept it. If the government were to genuinely solve the housing crisis and bring down property prices, it’d be the richest and most influential people in society who’d lose out. There’s little political appetite to do that.
