Through the keyhole: introducing the New Statesman's housing week

Over the next week, we're going to be examining the state of housing in Britain today.

Britain's housing situation is shambolic.

Since 1988, house prices have increased by 55 per cent in real terms according to the Halifax house price index — and almost all of that rise happened in just two years. Between 2002 and 2004 the average price of a house in the UK shot from £101,113 to £148,399. Since the market's peak, in 2007, the price of the average UK house has actually declined in real terms, but the price-to-earnings ratio of a house still stands at 4.5:1.

The bad situation nationwide is worse in our cities. As our economy steadily moves away from agriculture and manufacturing towards services, there is an ever-greater incentive to centralise our working lives in these hubs of activity. But expansive green belts stop us building our cities out, and the difficulty of getting planning permissionnot to mention the continued unpopularity of high-rise living — stop us building up.

As house prices have risen, we've also radically changed the way we provide accommodation for the poorest in society. In the post-war era, house-building was done by a mixture of local authorities and private enterprise. By the end of Thatcher's premiership, local authorities had largely stopped building homes altogether; and as a result of the recession, the number of new units built per year by private enterprise has also halved.

Gone is the idea of a council home for life, ideally ensuring stability, community and safety. Those ideals were rarely met, and it's undeniable that council estates had their flaws, but the alternative is worse. The private rental sector is expected to pick up the slack, with rents subsidised by the government's housing benefit. Landlords can, and do, raise rents at any time, forcing families from substandard house to substandard house — and occasionally to hostels, B&Bs and even the streets.

Even while the bottom end of the market is being forced to turn to the private rental sector, the top end is as well. The 0 per cent deposits of the pre-crisis world are gone, apparently forever. But while mortgages have reverted to the nineties, house prices haven't, and so, according to Halifax, the average age of a first-time buyer is now 30 years old (rising to 32 in London). If you want to live in a city, and don't have a nest-egg from your parents, your only option is to rent, usually indefinitely.

An increasing proportion of people renting at both ends of the housing market, matched with the precipitous drop in housebuilding since 2007, obviously means a squeeze on rents. But the government responded, not by tackling the cause, but by capping the amount of housing benefit people could receive, locking a whole social class out of large swathes of London.

The elephant in the room, of course, is the implicit promise that a house purchase is something that you can only ever make money on. If house prices were to fall, that would be disastrous for most people who own property, and that disaster would be passed on to the general economy. But if housing costs are not to fall, then Britain's young people and renters will have to carry on living through the disaster we are already experiencing. "The whole of British housing policy can be seen as an effort to reduce the cost of housing without affecting house prices", says Dan Davies, and that's a doomed attempt from the start.

Over the next week, we're going to be examining these concerns in greater detail. We'll look at the private rental sector, at the criminalisation of squatting and at the virtues of high-rises; we'll also be investigating the cost of the bedroom tax, and the implications of the housing benefit cap. If you think you have something to add to the discussion, you can tweet me or email me, and all the pieces will be collected here (and here) as the week goes on.

Monday: George Eaton on how the bedroom tax will hit disabled people, and Alex Hern on the death of Daniel Gauntlett due to the new anti-squatting laws.

Tuesday: Preston Byrne on why the Eastleigh by-election set back reform of planning laws, and Labour MP Helen Goodman on how trying to live on £18 a week showed the unfairness of the bedroom tax. 

Wednesday: Social researcher Declan Gaffney demonstrates how housing benefit has risen through need alone, and Simon Parkin on the dilemma faced by his grandparents as one of them has to go into care.

Thursday: Jeremy Messenger paints a picture of the omnipresent lack of stability, the invasion of privacy and the constant threat of being moved on tenants in the private rental sector experience, and VMC Rozario gives an innovative idea for how to build more houses.

Friday: Rebecca Tunstall on how housing traps people in unemployment.

A housing estate in Glasgow. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Theresa May’s Brexit speech is Angela Merkel’s victory – here’s why

The Germans coined the word “merkeln to describe their Chancellor’s approach to negotiations. 

It is a measure of Britain’s weak position that Theresa May accepts Angela Merkel’s ultimatum even before the Brexit negotiations have formally started

The British Prime Minister blinked first when she presented her plan for Brexit Tuesday morning. After months of repeating the tautological mantra that “Brexit means Brexit”, she finally specified her position when she essentially proposed that Britain should leave the internal market for goods, services and people, which had been so championed by Margaret Thatcher in the 1980s. 

By accepting that the “UK will be outside” and that there can be “no half-way house”, Theresa May has essentially caved in before the negotiations have begun.

At her meeting with May in July last year, the German Chancellor stated her ultimatum that there could be no “Rosinenpickerei” – the German equivalent of cherry picking. Merkel stated that Britain was not free to choose. That is still her position.

Back then, May was still battling for access to the internal market. It is a measure of how much her position has weakened that the Prime Minister has been forced to accept that Britain will have to leave the single market.

For those who have followed Merkel in her eleven years as German Kanzlerin there is sense of déjà vu about all this.  In negotiations over the Greek debt in 2011 and in 2015, as well as in her negotiations with German banks, in the wake of the global clash in 2008, Merkel played a waiting game; she let others reveal their hands first. The Germans even coined the word "merkeln", to describe the Chancellor’s favoured approach to negotiations.

Unlike other politicians, Frau Merkel is known for her careful analysis, behind-the-scene diplomacy and her determination to pursue German interests. All these are evident in the Brexit negotiations even before they have started.

Much has been made of US President-Elect Donald Trump’s offer to do a trade deal with Britain “very quickly” (as well as bad-mouthing Merkel). In the greater scheme of things, such a deal – should it come – will amount to very little. The UK’s exports to the EU were valued at £223.3bn in 2015 – roughly five times as much as our exports to the United States. 

But more importantly, Britain’s main export is services. It constitutes 79 per cent of the economy, according to the Office of National Statistics. Without access to the single market for services, and without free movement of skilled workers, the financial sector will have a strong incentive to move to the European mainland.

This is Germany’s gain. There is a general consensus that many banks are ready to move if Britain quits the single market, and Frankfurt is an obvious destination.

In an election year, this is welcome news for Merkel. That the British Prime Minister voluntarily gives up the access to the internal market is a boon for the German Chancellor and solves several of her problems. 

May’s acceptance that Britain will not be in the single market shows that no country is able to secure a better deal outside the EU. This will deter other countries from following the UK’s example. 

Moreover, securing a deal that will make Frankfurt the financial centre in Europe will give Merkel a political boost, and will take focus away from other issues such as immigration.

Despite the rise of the far-right Alternative für Deutschland party, the largely proportional electoral system in Germany will all but guarantee that the current coalition government continues after the elections to the Bundestag in September.

Before the referendum in June last year, Brexiteers published a poster with the mildly xenophobic message "Halt ze German advance". By essentially caving in to Merkel’s demands before these have been expressly stated, Mrs May will strengthen Germany at Britain’s expense. 

Perhaps, the German word schadenfreude comes to mind?

Matthew Qvortrup is author of the book Angela Merkel: Europe’s Most Influential Leader published by Duckworth, and professor of applied political science at Coventry University.