by Gareth Martin 23rd November 2020
“The foxes have holes, and the birds of the air have nests, but the Son of Man hath nowhere to lay His head.”
– Mathew 8:20
Since the crash of 2008, global capital has been wary of “risk”. The solution to which many have resorted is real estate: there is nothing as safe as houses. Faced by the uncertainty of market crisis, capital overall engaged in a “flight to quality”, seeking income from rents over productivity or speculation.
As the Financial Times recently wrote,
“A huge influx of capital has entered real estate, as quantitative easing bloated markets and narrowed bond yields, forcing investors to look elsewhere for income… Real estate prices in global cities have soared to new highs: they are 45 per cent higher than at their previous peak in 2007, according to Real Capital Analytics. Yet vast sums are still pushing into the sector. “[1]
Simultaneously, employment has become more precarious, and wages have stagnated. The benefit cap introduced by the Cameron government has also limited the amount of rent that many people can afford. The combination of inflating real estate prices, and falling or stagnant purchasing power in the hands of the working class has led to a severe squeeze of living standards. Marxists define the working class as everyone who has to survive by earning a wage eg by selling their labor.
Workers are faced with a climb in both house prices and rents. Not only are they less able to pay for decent accommodation, but the very of fact of paying a larger fraction of incomes in rent limits their ability to accumulate sufficient wealth to buy. The so-called “Generation Rent”, 18-40 year olds, is unlikely to ever acquire the kind of assets enjoyed by their predecessors.
Declining buying power among the general population has compelled the housing market to court the buyers of luxury accommodation. Many of these are foreign buyers, and many of the properties are held primarily as assets. In 2018 it was reported that there were nearly 15,000 unsold high-end units in London alone [2], with an additional 420 residential towers of at least 20 stories in the works, complete with pools and gyms.
The inevitable result of this pincer movement has been to drive more and more ordinary people into worse and more crowded accommodation, while simultaneously increasing the cost of social housing borne by local councils. The casual cruelties of Universal Credit only exaggerate the problem, with landlords wary of the delays and payment methods actively withdrawing from the social housing sector. All of these factors have led to a sharp rise in insecure accommodation and homelessness.
“The number of households living in temporary accommodation has risen by 50 per cent in the last five years to 56,560 households, including 88,500 children by the end of 2018, mostly in the private rented sector.” [3]
Since 2010, the number of rough sleepers has risen by 165%[4]. Many people have also been forced to liver further away from their place of work, with the regular commute taking longer.
“Every UK nation and region has seen increases in commute time since 2008. Commuters in the South East have seen the biggest rise, travelling an extra 31 hours a year, followed by the North West (up 26 hours) and the West Midlands (up 24 hours). “ [5]
There are currently 216,000 long term empty homes in the UK [6], while people without homes are left to die, as the Museum of Homelessness reports.
“We have found that at least 235 people affected by homelessness have died over the last six months – an average of one every 19 hours – despite the passage of the Homelessness Reduction Act in 2017. The people who have died range from 16 to 104 years old.”[7]
Lives are lost while glittering towers stand empty, hollow monuments to the accumulation of capital.
Efforts to remedy this are very modest; the governments National Planning Policy Framework defines an “affordable” home as one that is rented or sold for 20% below the average market rate.”[8] Seeing as the average starter home price is in the region of £250,000, this is very far from affordable for the vast majority of people.
Indeed, a government discussion paper reveals that “those born in 1990 are half as likely to be home owners by the age of 30 as those born in the 1960s and 1970s. Just 27% of people age under-35 own their own home today compared with 65% in the 1990s.”[9]
Even when such “affordable” homes are actually built, developers often wish to include them in the luxury residences they are building for the upper end of the market. This has seen the appearance of “poor doors” in combined developments, where the wealthy tenants are able to use the visible entrance, and all services, while the poor tenants are relegated to a back door, reminiscent of a Victorian servant’s entrance. Queens Park Place, NW6, explained to tenants that:
“Affordable tenants will not have use of the main private residential entrance, private courtyard gardens or basement car and cycle parking. Services including postal delivery and refuse collection are similarly divided.”[10]
As if all this were not enough, a further symptom has recently appeared in the form of AirBnB and similar services. Given the rising prices and rents, many landlords find that holding properties permanently open for rent on such services, to tourists and holiday makers rather than local markets is more lucrative, thus removing housing stock from local circulation. A recent report revealed that there are already places in the UK in which one in four homes is an AirBNB rental.[11]
Urgent action is required. 8.4 million people are estimated to live in accommodation that is “unaffordable, insecure or unsuitable” [12], according to the National Housing Federation. This is not a problem that affects the unlucky or the feckless, but everyone. It is entirely a product by the inhumane logic of the capitalist system.
But the problems of rentier capital accumulating in residential property, and of housing insecurity and homelessness for the majority while luxury flats stay empty, is not just local or specific to the UK. The interconnected global economy is driving identical processes in all the major metropolises of the world. And from there the crisis of affordable housing emanates outward into the hinterland. We need a national campaign to redress the balance, and then an international one; a campaign made up of millions marching in the streets and fighting evictions rather than making earnest entreaties to the powers that be.
[1] FT.com, June 2019
[2] The Guardian, January 2018
[3] ‘Living in Limbo: London’s temporary accommodation crisis’, https://www.london.gov.uk/
[4] https://www.homeless.org.uk/
[5] https://www.tuc.org.uk/, November 2019
[6] The Guardian, September 2019
[7] https://museumofhomelessness.org/
[8] https://assets.publishing.service.gov.uk/, NPPF Feb 2019
[9] https://assets.publishing.service.gov.uk/, “Making home ownership affordable”
[10] Daily Mail, July 2014
[11] https://www.bbc.co.uk/ September 2019
[12] https://www.theguardian.com/ Feb 2020
