(Photo of London in the 1970s, taken from Andy Worthington (http://www.andyworthington.co.uk), appeared on his website).
By Joshua Tartakovsky, 10 August 2017
London is facing a housing crisis which the late tragic fire in the Grenfell Tower only served to highlight.
For many English, owning one’s house has been a feasible and attainable dream, a part and parcel of a bourgeoisie life-existence. A must.
But with the high cost of homes only rising, with foreign investors buying homes as a safe investment, and with salaries frozen while the pound is losing its value as the future of the UK post-Brexit remains enshrouded in mist, the dream of owning a home in a city as London is becoming less and less attainable. Young people, unless they started off with wealth, must now either rent for the rest of their lives, or pay for the mortgage in the many years to come.
Hackney, which once used to be a haven for crime and London’s Hell Kitchen, is now out of reach for most but due to prices, not physical danger. The ratio of house price to median earning is now at 7.7, the highest ever. This means, in plain English, that the price of housing is far higher than what people earn, and the gap is growing bigger and bigger.
The Economist reports that in the past four decades house prices grew more in the UK than anywhere else in the G7 (Canada, Japan, US, Italy, Germany and France). This may mean that the housing crisis in the UK will eventually spread to other cities in Europe in the coming decade.
One may think the solution is simply for people to move to the suburbs. The Economist explains, however, why this is not the case:
As people are forced out to the suburbs, cities become less dynamic. Workers waste time on marathon, energy-sapping commutes. People from the regions cannot afford to move to cities where they might find work. Businesses cannot clear land to build. It is perhaps no coincidence that Britain’s growing housing mess has coincided with stagnant productivity.
To come out of the housing crisis, the Economist recommends the government build 300,000 homes per year. Corbyn has been vocal on the need for public housing, therefore widening his appeal. Interestingly, many residents of Labour districts in southeast London for example are being forced to relocate to Conservative districts in the suburbs, therefore possibly turning the tide in favor of Labour in the future.
Theresa May expressed her plans for the creation of more public housing (by giving councils freedom and funding for development) due to the housing crisis. But this was before the election.
Now with the economic future very unclear and with investors fearful of taking on new initiatives, no one would want to take on the loss of constructing homes and selling them for lower prices. Many strong forces in the Conservative party oppose plans to construct affordable housing, perhaps since some of them are tied to powerful economic forces that are comfortable with the status-quo. Theres May is therefore in a catch-22. She may want to construct more homes or open up the green-belt surrounding London, but the Brexit negotiations may mean no one wants to take on this risk now.
Unless Theresa May finds a way to open up the door for more affordable housing for residents of London, even if in the surrounding towns, in the coming several years one can expect the housing shortage to become more and more acute and with opposition to grow. Corbyn can seize this popular discontent in his favor and possibly even turn the housing issue as the major slogan in the next elections.
Although I recently wrote that a majority in the UK are probably not radical communists, with the housing issue Corbyn may have a winning card. He can win.
Due to the growing crisis, the housing issue can make or break May’s premiership in the next elections.