A woman huddles close to the heater in her London flat, in a picture taken in 1934. Photo: Harry Todd/Fox Photos/Getty Images
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My rented house is not my home

There’s only so much twenty quid and a trip to Ikea can do.

I’ve lived in my rented houseshare for seven years. I’d previously rented a room nearby from a friend, who moved abroad. For various reasons, I had to find somewhere to live in a hurry. I’d just graduated from the London College of Fashion, was writing freelance for the Independent on Sunday, I’d been on Woman’s Hour, I was, by some definition, “successful”. But without a regular income my housing choices were limited. I looked at one place where the furniture was all on its side and a tree was growing through the wall. My dad helped move me to the best place I could afford, with fairly hands-off letting agents who wouldn’t check if I had a proper job. I knew I could pay the rent, I just couldn’t prove I could pay the rent.

My house, shared with four others, was fine at first. My dad pulled a face and the shelves off my bedroom walls (DIY tip: rawl plugs are your friend; stuffing holes with tissue paper is not) and called it “a student hovel”. I called it “faded grandeur” and focused on the Victorian fireplaces, pretended the black-and-white check of the peeling laminate flooring was tile, ignored the hole in the hearth in my bedroom and the bellowing noise of the toilet’s Medieval plumbing. According to the contract, it was rented to us as furnished. Hmmm. The ‘coffee table’ in the sitting room was two wooden construction pallets topped with a dusty piece of hessian. There was a dining room; it contained nothing but a hideous Freecycled bamboo picnic table. The beds in each room comprised more wooden pallets – of slightly fancier construction; varnished, even! – and a mattress. If you don’t look too closely at stains you can pretend they’re not there!

I mopped my wooden floors. Bought my own curtains. You can do a lot with twenty quid and a trip to Ikea. In the back yard, I dug up the dead tree and the cat shit and the beer kegs and the rusty bicycle wheel; got a compost bin from the council, planted climbing roses and jasmine and two hydrangeas. My housemates and I joined the local Residents’ Association and volunteered at the street parties, painted walls at events to rejuvenate the neighbourhood, wrote letters to the council when late-night bars sprung up and men began following us home along the street, cat-calling. We threw out the sitting room’s wooden pallets and bought a coffee table from Oxfam, a dining table too. Our neighbours in the Residents’ Association gave us a vintage sideboard that we filled with fancy-on-a-budget wine and we had people round to dinner. I made tacos!

In the first couple of years, our shower broke. In the winter. ‘It’s always something with you lot,’ the letting agent complained when we rang with the news. We washed our hair in buckets filled from the kettle while we waited for them to get round to it. The first plumber didn’t bother grouting the tiles; our dining room below sprang a leak. The second plumber didn’t bother with a tile cutter to get around the shelf, he just smashed a tile and mosaiced it to the wall. The dining room leak returned. The third plumber stopped the leak; his grouting was OK. (He also installed our shower upside-down and said things like, ‘Say what you like about that Hitler, but…’.) The boiler broke: it’s always something…

We couldn’t afford anywhere else to live, and we had a garden, bus routes to work, a life, friends nearby. The rent went up.

Almost two years ago, January 2013. I woke to a gentle, rhythmic “thwunk thwunk” noise in my bedroom ceiling. I was living on the first floor now, the big but freezing front bedroom, single-glazed to the noise of a street that now filled with fights every Friday night. But it had that lovely, gorgeous fireplace (fill your hot water bottle, ignore the draught), and was warmer and quieter once I bought my own curtains. And London was expensive – it feels like my Oyster fares have doubled in the ten years I’ve lived here, but maybe I’m imagining that. Back to the “thwunk thwunk” noise: the roof, or maybe the gutters, or the radiator upstairs, was leaking into my bedroom ceiling. But the water hadn’t fallen through the ceiling yet, my room was dry. It was a reprieve! There was time to stop this!

I told the letting agent straight away. About a month later, a plumber came round to fix it. He couldn’t find an internal leak, so he told the letting agent to get a roofer. He left my bedroom ceiling open to the joists, to the winter air: no sense in closing it up, replastering, when the roof needed repairing. They didn’t schedule a roofer for weeks; I kept calling. It was winter. Eventually a man came, peered out of the attic window, concluded there was no problem, then leant over me in our dark hallway while we were alone in the house and told me to ditch my boyfriend and go out with him. I bared my teeth in the polite smile of the uncomfortable. He suggested I hadn’t understood what he’d said, repeated himself. When I finally got him to leave, he called the letting agent to say the roof was fine; they rang me and asked, ‘Why did you ask for a roofer? It’s expensive, why did you do that?’ It took several weeks of phone calls and emails before they closed up the hole in my ceiling, replastered.

Seven months later, October 2013 now. Thwunk thwunk thwunk. The leak was back. It had to be the roof, or the gutters. The gutters that leaked into the neighbour’s flat so that they complained about us. I was given a number for a roofer and I rang him twice a week all winter, and he forgot, or he couldn’t come, or he could come round but right then, that minute; except right then, that minute, I was at work. I also rang the letting agent regularly, asking for a different roofer, one who could make an appointment maybe; and could they also fix the fence that had blown down on Christmas Eve in the storms? Eventually would be OK, sometime this century, even.

We did minor repairs ourselves. Bought new toilet seats, fixed the flush when it rusted clean away, stripped the moulding wallpaper in the dining room, cleaned the mould with some kind of industrial strength spray, used anti-damp paint, repainted the whole wall. Filled the house with furniture and books. Kept throwing dinner parties, but bought extra blankets and advised everyone to drink a lot of red wine, it gets kind of cold in here. The roses and jasmine in the garden were joined by tomatoes, honeysuckle, clematis. We bought curtains for the sitting room. We didn’t throw all-night ragers. We were in the freaking neighbourhood book club! Most importantly, from a legal rather than whimsical standing: we always paid our rent on time.

Eventually, March 2013, I gave up ringing the roofer. The letting agent never responded when I emailed them about finding a new one. Spring came, the rain stopped, so did the thwunk thwunk noise, for a while. I had a full-time job and a book to write and a bunch of intense personal issues that are not entirely my business to write about here. But anyway besides, I was tired of ringing the fucking roofer every week. And the leak hadn’t actually come through my ceiling.

On 15 October this year, the leak came through my ceiling. I put a bucket (actually, a large Tupperware, previously home to chocolate parkin) on my floor, surrounded it with the thick plastic sheeting my new bed quilt had come packaged in. The leak was kind of messy and didn’t always hit the Tupperware. I needed the plastic, too. I called the letting agent that day, followed it up with an email. Mentioned that, sure, we’d agree to the rent increase they had recently suggested – if they’d fix the major repairs. The leak in my front bedroom ceiling; the damp in the back bedroom. We agreed, even though the notice of increase came on the wrong form, with the wrong names, and the house was much, much worse than the student hovel my dad had moved me into nearly seven years ago. There’s only so much twenty quid and a trip to Ikea can do.

There was no reply, except another letter – again, with the wrong tenants’ names on it – explaining they’d got the rent increase wrong and it was actually this much more. Not that other amount. LOL, soz. My housemate emailed to repeat that, yes, we would agree to pay it: when the repairs were done. About a week later we were told a roofer would ring my housemate. We asked that he ring me, instead, so I could arrange the appointment. My ceiling, my time off work. He rang a completely different housemate and asked to come round right then, that minute. It wasn’t possible. We all work full time, to pay these rent increases, keep our stock of Tupperware for leaks intact. He didn’t ring back. We asked the letting agent again, could someone ring us and make an appointment. If I took a day off and let them know, would someone come round? I had a day off, as it happened, and told them so. I rang them again. And again. And again. And again.

Eventually I sent a brief email (brevity is a thing I am capable of, despite this blogpost), with a much less colourful timeline of these events, to the letting agent. It had now been three weeks. The Tupperware had to be emptied of its yellowing contents pretty regularly. (In rereading that sentence, as part of the whole, I feel I ought to mention: the Medieval plumbing works fine, I use the Tupperware for only its intended purpose as a leak-collector; I assume the yellow is the result of charming London smog. Or maybe there’s asbestos on the roof!) The heating had broken down at this point, and it was raining pretty much always. They finally agreed that yes, this was urgent, and the handyman would ring. Could he come round right this minute? I sighed, explained that whole pesky job thing, and he came round two days later at balls o’clock a.m.. I gave him a key, went to stay at my boyfriend’s house for the weekend, where – Hallelujah! – there was a roof without a hole. I came back on Monday. There was still a fucking hole in my ceiling.

It needs a roofer, the letting agent told us, CC’ing my granny with some rudimentary egg-sucking instructions. Told us, not unprompted: we had to beg over two or three emails for some update to the saga. We know, we replied. Check the timeline. A few centuries passed and no roofer or updates materialised. I sent a further email, still polite but slightly less full of peace and goodwill to all men than the time of year warrants, but, y’know. My duvet was, by this time, moist. My books are crinkling. I moved to my parents’ house. The train is only 50 minutes to London, but factor in the walk to the station, getting to work at the other end, the train times, and my daily round trip is four hours. I bought a seven-day ticket: £92.50. Surely this would be fixed in a week!!!!

The letting agent emails my housemate to ask why we haven’t signed the new contracts? We have to pay the rent increase NOW, this CANNOT wait.

I reply with another, even less humorous, email. They agree: a roofer would come, on the Saturday. I’m supposed to be editing a book, but I can give up my Saturday if this guy will fix my ceiling. If this guy turns up. (He turned up. He even found the hole in the roof! I want to call the gross roofer from two years ago and say, See! See! If you spent your time actually looking at roofs instead of creeping out tenants, this problem might be fixed! I also don’t want to call that guy ever.) On Monday I hear nothing from the letting agent, but get a call at 6pm from an entirely different roofer. By the time I sort out what’s going on, I’ve missed the train to my parents’ house. I get home late; this second roofer is scheduled for the next day. He showed up, too, and found the hole, too. He quotes my letting agent too. That was a week ago.

~~~~~~~Silence~~~~~~~~~

The council comes round to inspect the damp and they don’t even bother sticking the little dampometer machine into my bedroom walls. Elsewhere in the house it shrieks like the Ghostbusters have found Slimer, but in my room the Tupperware O’ Suspiciously Yellow Roof Water speaks for itself. The brown stain creeps towards the light fitting. I’m freelance and staying home for this inspection costs me half a day’s pay and holiday pay. The council will write to the landlord asking them for their response to ‘the issues’ in ten days. Also, we have woodworm, did we know?

I buy my third seven-day ticket. I email the agent: hey, heads up, I’ve now spent £319 on train travel (there was another ticket on top of the three season tickets, my maths is sound). Happy seven-week anniversary to the hole in my ceiling! Bon anniversaire to the mould on my windows! My duvet is like a sea sponge! My lovely new quilt is pretty much done for, but thank goodness for its handy plastic sheet packaging, eh? I don’t tell them I have bronchitis, and a whole bunch of stuff going on, and I cannot travel for 20 hours a week and pay £92 a week AND pay the rent and stay sane. Somewhat sane. Chronic stress-induced insomnia, albeit caused by more than just the fucking hole in my fucking ceiling, is not helping. (And I’m one of the lucky ones. My parents live near enough; I have money enough.) I keep it brief. I keep it to: When. Is. The. Roofer. Coming. Please.

“We apologise for the inconvenience,” they reply. “The landlord is making a decision.”

A friend of mine challenged her rent increase this month; she received an eviction notice yesterday. Her description of her rented house on the Guardian makes it sound a lot like mine (hers is more succinct, btw). The Tenancies Reform Bill, aimed at preventing retaliatory evictions, failed last week. I can’t withhold rent without risking my housemates being evicted; I can’t move out because who would they rent the room to? A sewer mermaid? A really rich frog?

I have a job. I have my parents’ house, and my boyfriend’s house, and I can pay rent on a room I can’t live in and train fares, for a while. I am hugely privileged. I am one of the lucky ones. My landlord is making a decision.

This article first appeared on harrietreuterhapgood.com and is crossposted with permission. Follow Harriet on Twitter: @hapgoodness

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We're racing towards another private debt crisis - so why did no one see it coming?

The Office for Budget Responsibility failed to foresee the rise in household debt. 

This is a call for a public inquiry on the current situation regarding private debt.

For almost a decade now, since 2007, we have been living a lie. And that lie is preparing to wreak havoc on our economy. If we do not create some kind of impartial forum to discuss what is actually happening, the results might well prove disastrous. 

The lie I am referring to is the idea that the financial crisis of 2008, and subsequent “Great Recession,” were caused by profligate government spending and subsequent public debt. The exact opposite is in fact the case. The crash happened because of dangerously high levels of private debt (a mortgage crisis specifically). And - this is the part we are not supposed to talk about—there is an inverse relation between public and private debt levels.

If the public sector reduces its debt, overall private sector debt goes up. That's what happened in the years leading up to 2008. Now austerity is making it happening again. And if we don't do something about it, the results will, inevitably, be another catastrophe.

The winners and losers of debt

These graphs show the relationship between public and private debt. They are both forecasts from the Office for Budget Responsibility, produced in 2015 and 2017. 

This is what the OBR was projecting what would happen around now back in 2015:

This year the OBR completely changed its forecast. This is how it now projects things are likely to turn out:

First, notice how both diagrams are symmetrical. What happens on top (that part of the economy that is in surplus) precisely mirrors what happens in the bottom (that part of the economy that is in deficit). This is called an “accounting identity.”

As in any ledger sheet, credits and debits have to match. The easiest way to understand this is to imagine there are just two actors, government, and the private sector. If the government borrows £100, and spends it, then the government has a debt of £100. But by spending, it has injected £100 more pounds into the private economy. In other words, -£100 for the government, +£100 for everyone else in the diagram. 

Similarly, if the government taxes someone for £100 , then the government is £100 richer but there’s £100 subtracted from the private economy (+£100 for government, -£100 for everybody else on the diagram).

So what implications does this kind of bookkeeping have for the overall economy? It means that if the government goes into surplus, then everyone else has to go into debt.

We tend to think of money as if it is a bunch of poker chips already lying around, but that’s not how it really works. Money has to be created. And money is created when banks make loans. Either the government borrows money and injects it into the economy, or private citizens borrow money from banks. Those banks don’t take the money from people’s savings or anywhere else, they just make it up. Anyone can write an IOU. But only banks are allowed to issue IOUs that the government will accept in payment for taxes. (In other words, there actually is a magic money tree. But only banks are allowed to use it.)

There are other factors. The UK has a huge trade deficit (blue), and that means the government (yellow) also has to run a deficit (print money, or more accurately, get banks to do it) to inject into the economy to pay for all those Chinese trainers, American iPads, and German cars. The total amount of money can also fluctuate. But the real point here is, the less the government is in debt, the more everyone else must be. Austerity measures will necessarily lead to rising levels of private debt. And this is exactly what has happened.

Now, if this seems to have very little to do with the way politicians talk about such matters, there's a simple reason: most politicians don’t actually know any of this. A recent survey showed 90 per cent of MPs don't even understand where money comes from (they think it's issued by the Royal Mint). In reality, debt is money. If no one owed anyone anything at all there would be no money and the economy would grind to a halt.

But of course debt has to be owed to someone. These charts show who owes what to whom.

The crisis in private debt

Bearing all this in mind, let's look at those diagrams again - keeping our eye particularly on the dark blue that represents household debt. In the first, 2015 version, the OBR duly noted that there was a substantial build-up of household debt in the years leading up to the crash of 2008. This is significant because it was the first time in British history that total household debts were higher than total household savings, and therefore the household sector itself was in deficit territory. (Corporations, at the same time, were raking in enormous profits.) But it also predicted this wouldn't happen again.

True, the OBR observed, austerity and the reduction of government deficits meant private debt levels would have to go up. However, the OBR economists insisted this wouldn't be a problem because the burden would fall not on households but on corporations. Business-friendly Tory policies would, they insisted, inspire a boom in corporate expansion, which would mean frenzied corporate borrowing (that huge red bulge below the line in the first diagram, which was supposed to eventually replace government deficits entirely). Ordinary households would have little or nothing to worry about.

This was total fantasy. No such frenzied boom took place.

In the second diagram, two years later, the OBR is forced to acknowledge this. Corporations are just raking in the profits and sitting on them. The household sector, on the other hand, is a rolling catastrophe. Austerity has meant falling wages, less government spending on social services (or anything else), and higher de facto taxes. This puts the squeeze on household budgets and people are forced to borrow. As a result, not only are households in overall deficit for the second time in British history, the situation is actually worse than it was in the years leading up to 2008.

And remember: it was a mortgage crisis that set off the 2008 crash, which almost destroyed the world economy and plunged millions into penury. Not a crisis in public debt. A crisis in private debt.

An inquiry

In 2015, around the time the original OBR predictions came out, I wrote an essay in the Guardian predicting that austerity and budget-balancing would create a disastrous crisis in private debt. Now it's so clearly, unmistakably, happening that even the OBR cannot deny it.

I believe the time has come for there be a public investigation - a formal public inquiry, in fact - into how this could be allowed to happen. After the 2008 crash, at least the economists in Treasury and the Bank of England could plausibly claim they hadn't completely understood the relation between private debt and financial instability. Now they simply have no excuse.

What on earth is an institution called the “Office for Budget Responsibility” credulously imagining corporate borrowing binges in order to suggest the government will balance the budget to no ill effects? How responsible is that? Even the second chart is extremely odd. Up to 2017, the top and bottom of the diagram are exact mirrors of one another, as they ought to be. However, in the projected future after 2017, the section below the line is much smaller than the section above, apparently seriously understating the amount both of future government, and future private, debt. In other words, the numbers don't add up.

The OBR told the New Statesman ​that it was not aware of any errors in its 2015 forecast for corporate sector net lending, and that the forecast was based on the available data. It said the forecast for business investment has been revised down because of the uncertainty created by Brexit. 

Still, if the “Office of Budget Responsibility” was true to its name, it should be sounding off the alarm bells right about now. So far all we've got is one mention of private debt and a mild warning about the rise of personal debt from the Bank of England, which did not however connect the problem to austerity, and one fairly strong statement from a maverick columnist in the Daily Mail. Otherwise, silence. 

The only plausible explanation is that institutions like the Treasury, OBR, and to a degree as well the Bank of England can't, by definition, warn against the dangers of austerity, however alarming the situation, because they have been set up the way they have in order to justify austerity. It's important to emphasise that most professional economists have never supported Conservative policies in this regard. The policy was adopted because it was convenient to politicians; institutions were set up in order to support it; economists were hired in order to come up with arguments for austerity, rather than to judge whether it would be a good idea. At present, this situation has led us to the brink of disaster.

The last time there was a financial crash, the Queen famously asked: why was no one able to foresee this? We now have the tools. Perhaps the most important task for a public inquiry will be to finally ask: what is the real purpose of the institutions that are supposed to foresee such matters, to what degree have they been politicised, and what would it take to turn them back into institutions that can at least inform us if we're staring into the lights of an oncoming train?