Why can't we just build some more houses? Image: Getty.
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The Tories want to give away houses to make sure we have enough houses

Black is white. War is peace. Madness is sanity.

Hey, guys, I've got this great new idea for sorting out Britain's defence problems. The British military is under-equipped, right? The biggest problem facing our boys is that they, basically, just don't have enough stuff.

So, here’s my plan for making sure the military does have enough equipment: we sell off all the equipment that it already has. But – and this is the clever part – we do it at a massive discount.

No, trust me, this is definitely going to work.

Because, with the money we get from those sales, we can then buy some new equipment, right? I mean, probably not as much as we had to start with, because we offered that discount to motivate sales. That is certainly a downside, I’ll admit.

But you can only play the cards you’re dealt, and as we all know, there's no money left. So, thanks to the mess that Labour left us in, the only way to guarantee we have a properly equipped military is to sell off all the equipment that the British military already has.

And that is my long-term economic plan for Britain's hardworking soldiers.

Okay, so, nobody seriously thinks that this is a sensible military procurement strategy. And yet, in a different sphere of public life, “giving stuff away to make sure you have enough stuff” is an entirely respectable position, despite the fact it implies a level of economic illiteracy that should get you banned from so much as entering a branch of Tesco.

Yesterday, the Sunday Times confirmed that the Tories were, as a key plank of their manifesto, consider a massive ramping up of the right-to-buy. That, you’ll recall, was an iconic Thatcher era policy under which council tenants were given an automatic right to purchase their homes at a massive discount, and which has had absolutely no downsides in the 30 years since.

The point of the policy was to turn Britain into a "property-owning democracy", and it was, at heart, a political move. It worked on the assumption that people who own homes are more likely to vote Conservative than people who live in council houses. So, if you’re a Tory, you want more of the former, and fewer of the latter.

That, someone clearly thinks, still applies. Somebody in the Tory hierarchy has looked at which voters the party needs to win over to stay in government, looked at the fact there's a housing crisis, and put two and two together to make the square root of minus one.

Now, the party's manifesto will reportedly include an extension of the right-to-buy to cover tenants living in housing association (HA) properties. The proceeds of these sales, unlike the proceeds of past right-to-buy transactions, would be ploughed back into extra housing. In other words, it amounts to making sure we have enough tanks by selling off all our tanks.

There are so many problems with this policy that you’d think at least one of them would have come up in the discussions at CCHQ. One is that it HAs aren't actually an arm of government, so the government is promising to sell things it doesn’t actually own. It can probably find a way of making them do so anyway, but the bills that’ll result from the resulting legal wrangling seem an odd sort of thing to prioritise right now.

Another problem is that the policy will haemorrhage money, since that discount basically amounts to the state giving individual tenants a bung. "Sources" claim it'll eat into the housing benefit bill; that sounds optimistic to me, but even if it does, it will have done so by handing out houses to a lucky few, and as a British taxpayer who isn't being offered a subsidised house I feel a bit miffed about that.

And that is the biggest problem here: never mind the fact it’ll generate less cash that it costs us, or the fact that if the Tories really wanted to get the state building houses again they’ve had five years in which to do that. Consider the political ramifications.

Reuters report over the weekend said that the policy was “aiming to sway voters who are struggling to buy a house”. Now I know quite a lot of voters who'd describe themselves that way, and at least some of them would probably be open to a touch of electorally bribery. Extending right-to-buy to them would be a massive vote winner.

So why is nobody doing so? Because those people, some 9m of them, live in the private rented sector, over which the government has even less control than it does over housing associations. Those people would love the right to buy a house – but nobody is coming forward to give them one.

Because the problem with Britain’s housing market is not that HA tenants can’t buy their own homes. It’s that we need to build more bloody houses.

Still, I'm sure private renters will be delighted to see a future Tory government handing out subsidised houses like sweets to those who were lucky enough to be living in them at the time. It’s quite clear to me now that the only way to make sure we have enough houses is to give away houses. Black is white. War is peace. Madness is sanity.

That makes sense, right? Right?

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Daniel Hannan. You can find him on Twitter or Facebook.

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The tale of Battersea power station shows how affordable housing is lost

Initially, the developers promised 636 affordable homes. Now, they have reduced the number to 386. 

It’s the most predictable trick in the big book of property development. A developer signs an agreement with a local council promising to provide a barely acceptable level of barely affordable housing, then slashes these commitments at the first, second and third signs of trouble. It’s happened all over the country, from Hastings to Cumbria. But it happens most often in London, and most recently of all at Battersea power station, the Thames landmark and long-time London ruin which I wrote about in my 2016 book, Up In Smoke: The Failed Dreams of Battersea Power Station. For decades, the power station was one of London’s most popular buildings but now it represents some of the most depressing aspects of the capital’s attempts at regeneration. Almost in shame, the building itself has started to disappear from view behind a curtain of ugly gold-and-glass apartments aimed squarely at the international rich. The Battersea power station development is costing around £9bn. There will be around 4,200 flats, an office for Apple and a new Tube station. But only 386 of the new flats will be considered affordable

What makes the Battersea power station development worse is the developer’s argument for why there are so few affordable homes, which runs something like this. The bottom is falling out of the luxury homes market because too many are being built, which means developers can no longer afford to build the sort of homes that people actually want. It’s yet another sign of the failure of the housing market to provide what is most needed. But it also highlights the delusion of politicians who still seem to believe that property developers are going to provide the answers to one of the most pressing problems in politics.

A Malaysian consortium acquired the power station in 2012 and initially promised to build 517 affordable units, which then rose to 636. This was pretty meagre, but with four developers having already failed to develop the site, it was enough to satisfy Wandsworth council. By the time I wrote Up In Smoke, this had been reduced back to 565 units – around 15 per cent of the total number of new flats. Now the developers want to build only 386 affordable homes – around 9 per cent of the final residential offering, which includes expensive flats bought by the likes of Sting and Bear Grylls. 

The developers say this is because of escalating costs and the technical challenges of restoring the power station – but it’s also the case that the entire Nine Elms area between Battersea and Vauxhall is experiencing a glut of similar property, which is driving down prices. They want to focus instead on paying for the new Northern Line extension that joins the power station to Kennington. The slashing of affordable housing can be done without need for a new planning application or public consultation by using a “deed of variation”. It also means Mayor Sadiq Khan can’t do much more than write to Wandsworth urging the council to reject the new scheme. There’s little chance of that. Conservative Wandsworth has been committed to a developer-led solution to the power station for three decades and in that time has perfected the art of rolling over, despite several excruciating, and occasionally hilarious, disappointments.

The Battersea power station situation also highlights the sophistry developers will use to excuse any decision. When I interviewed Rob Tincknell, the developer’s chief executive, in 2014, he boasted it was the developer’s commitment to paying for the Northern Line extension (NLE) that was allowing the already limited amount of affordable housing to be built in the first place. Without the NLE, he insisted, they would never be able to build this number of affordable units. “The important point to note is that the NLE project allows the development density in the district of Nine Elms to nearly double,” he said. “Therefore, without the NLE the density at Battersea would be about half and even if there was a higher level of affordable, say 30 per cent, it would be a percentage of a lower figure and therefore the city wouldn’t get any more affordable than they do now.”

Now the argument is reversed. Because the developer has to pay for the transport infrastructure, they can’t afford to build as much affordable housing. Smart hey?

It’s not entirely hopeless. Wandsworth may yet reject the plan, while the developers say they hope to restore the missing 250 units at the end of the build.

But I wouldn’t hold your breath.

This is a version of a blog post which originally appeared here.

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