We need to talk about the British property cult

Something should be done about the housing crisis before it's too late.

I was discussing the implications of the British Government’s recent spending review for housing associations when news of the civil unrest in Egypt started to come through. The housing crisis is much debated and its scale and significance are well recognised.We wondered whether the issue would ever lead to widespread protests. We started thinking about the poll tax riots of the 1990s which effectively put paid to Prime Minister Thatcher. Would the bedroom tax lead to similar unrest?

No: on the whole the people affected are either too old or too poor to protest with any force. More importantly the sentiment of the vocal masses is consumed by the UK’s one permitted greed: ownership.

But what will happen when a majority of people expecting to own a house find themselves not just priced out but physically excluded by a lack of available housing? These will be the children of the people with most influence over policy and public order and not just the weak, the poor and the vulnerable. This may offer a glimmer of hope to the CEOs of those housing associations that are neither too big to fail nor niche enough to be essential.

There are already indications some policy makers have seen that the demographics are shifting. As Janan Ganesh wrote in the Financial Times last week, it is inevitable that taxation’s focus will shift from income to assets. This has already started with increases to stamp duty on luxury houses and an end to the Council Tax discount on second homes. Income taxes are being reduced at both ends of the income scale.

Home ownership cuts to the heart of the conundrum facing the housing associations that provide the bulk of the UK’s social housing. Investors much prefer the yields achieved with privately owned housing to the lower, albeit steadier, returns offered by housing associations. Yes, this is changing but not quickly and not for all. The result is that few of the existing housing associations will be able to fund expansion and therefore few will survive the coming rigours of a mixed-economy market.

The obstacle is obvious. If the UK’s housing stock were to increase to meet demand then house prices would stop rising and the "investment" potential that drives almost every purchase and every single mortgage decision would be diminished. And no-one with a current investment, whether as a lender or an owner, will tolerate this. The success of the UK’s housing ladder is dependent on it being pulled up higher and higher with each generation. Like main-frame computers in the 1980s, residual values are always predicted to be far greater than the purchase price. This is a problem that has been known for decades, as David Miles points out in his Bank of England Report. The report also highlights that the problem gets worse as population density increases. Not only will house-price rises greatly outpace wage inflation, land availability will become even scarcer. Housing associations will have to fight for land, for financing and for affluent tenants able to afford the ever rising rents. Something has to give.

Will this really pave the way for a new levy on housing and an assault on the British property cult? If so perhaps the usual restraint will crumble and we will see waves of street protests, albeit more Glastonbury meets Glyndebourne rather than Tahrir Square meets Jarrow March.

Housing associations will have to fight for land, for financing and for affluent tenants able to afford the ever rising rents. Photograph: Getty Images

Spencer Neal is a reformed publisher who now advises on media and stakeholder relations at Keeble Brown. He writes about the ironies and hypocrisies that crop up in other peoples' businesses. He is also an optimist.

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Air pollution: 5 steps to vanquishing an invisible killer

A new report looks at the economics of air pollution. 

110, 150, 520... These chilling statistics are the number of deaths attributable to particulate air pollution for the cities of Southampton, Nottingham and Birmingham in 2010 respectively. Or how about 40,000 - that is the total number of UK deaths per year that are attributable the combined effects of particulate matter (PM2.5) and Nitrogen Oxides (NOx).

This situation sucks, to say the very least. But while there are no dramatic images to stir up action, these deaths are preventable and we know their cause. Road traffic is the worst culprit. Traffic is responsible for 80 per cent of NOx on high pollution roads, with diesel engines contributing the bulk of the problem.

Now a new report by ResPublica has compiled a list of ways that city councils around the UK can help. The report argues that: “The onus is on cities to create plans that can meet the health and economic challenge within a short time-frame, and identify what they need from national government to do so.”

This is a diplomatic way of saying that current government action on the subject does not go far enough – and that cities must help prod them into gear. That includes poking holes in the government’s proposed plans for new “Clean Air Zones”.

Here are just five of the ways the report suggests letting the light in and the pollution out:

1. Clean up the draft Clean Air Zones framework

Last October, the government set out its draft plans for new Clean Air Zones in the UK’s five most polluted cities, Birmingham, Derby, Leeds, Nottingham and Southampton (excluding London - where other plans are afoot). These zones will charge “polluting” vehicles to enter and can be implemented with varying levels of intensity, with three options that include cars and one that does not.

But the report argues that there is still too much potential for polluters to play dirty with the rules. Car-charging zones must be mandatory for all cities that breach the current EU standards, the report argues (not just the suggested five). Otherwise national operators who own fleets of vehicles could simply relocate outdated buses or taxis to places where they don’t have to pay.  

Different vehicles should fall under the same rules, the report added. Otherwise, taking your car rather than the bus could suddenly seem like the cost-saving option.

2. Vouchers to vouch-safe the project’s success

The government is exploring a scrappage scheme for diesel cars, to help get the worst and oldest polluting vehicles off the road. But as the report points out, blanket scrappage could simply put a whole load of new fossil-fuel cars on the road.

Instead, ResPublica suggests using the revenue from the Clean Air Zone charges, plus hiked vehicle registration fees, to create “Pollution Reduction Vouchers”.

Low-income households with older cars, that would be liable to charging, could then use the vouchers to help secure alternative transport, buy a new and compliant car, or retrofit their existing vehicle with new technology.

3. Extend Vehicle Excise Duty

Vehicle Excise Duty is currently only tiered by how much CO2 pollution a car creates for the first year. After that it becomes a flat rate for all cars under £40,000. The report suggests changing this so that the most polluting vehicles for CO2, NOx and PM2.5 continue to pay higher rates throughout their life span.

For ClientEarth CEO James Thornton, changes to vehicle excise duty are key to moving people onto cleaner modes of transport: “We need a network of clean air zones to keep the most polluting diesel vehicles from the most polluted parts of our towns and cities and incentives such as a targeted scrappage scheme and changes to vehicle excise duty to move people onto cleaner modes of transport.”

4. Repurposed car parks

You would think city bosses would want less cars in the centre of town. But while less cars is good news for oxygen-breathers, it is bad news for city budgets reliant on parking charges. But using car parks to tap into new revenue from property development and joint ventures could help cities reverse this thinking.

5. Prioritise public awareness

Charge zones can be understandably unpopular. In 2008, a referendum in Manchester defeated the idea of congestion charging. So a big effort is needed to raise public awareness of the health crisis our roads have caused. Metro mayors should outline pollution plans in their manifestos, the report suggests. And cities can take advantage of their existing assets. For example in London there are plans to use electronics in the Underground to update travellers on the air pollution levels.

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Change is already in the air. Southampton has used money from the Local Sustainable Travel Fund to run a successful messaging campaign. And in 2011 Nottingham City Council became the first city to implement a Workplace Parking levy – a scheme which has raised £35.3m to help extend its tram system, upgrade the station and purchase electric buses.

But many more “air necessities” are needed before we can forget about pollution’s worry and its strife.  

 

India Bourke is an environment writer and editorial assistant at the New Statesman.