The real victims of London’s broken housing market


This morning’s story
about Newham attempting to place families on their waiting list with a housing association up in Stoke-on-Trent struck home for me. Literally.

Almost ten years ago, I scraped together a tiny deposit, for a (pretty tiny!) flat in Manor Park. I’m living there still, crammed in with my partner Jenn and two impractically large dogs. I’m there because I like it there.

My street looks a lot like the street I grew up in: a long row of not terribly well cared for terraces. When the weather is good, kids play out on my street and dodge cars to play cricket. There are some great local shops, including the tardis-like DIY store at the end of the road, and Istanbul grocery that has the best and cheapest fresh fruit and veg I’ve found in London.

It’s not cutesy – like a lot of poor areas the street scene is cluttered and dirty (walking dogs without them wolfing down chicken bones and choking is an art). Although we mostly rub along well, the neighbourhood changes so quickly that sometimes tensions flare up. Lots and lots of people in my street are really struggling to get by.

But I never feel more like a Londoner than in my street (not even when I’m in Westminster, about which I’m pretty sentimental). And there’s a reason for that. London is now, and always has been built on the backs of the people living in the East End. This city runs on low paid labour and has been transformed over and over again by migrants arriving, working and thriving. When you look out of my front room window you can watch London growing and changing in front of your eyes.

You *can* still get a four bedroom rental in my area for the price of the cap (300pw in Newham, for which thanks to @HCABCrowdmap). And contrary to a lot of my Twitter feed this morning, many local landlords *will* still rent to housing benefit claimants. But you won’t find those lets on Rightmove, you’ll find them in the agencies on the Romford Road. They won’t be fancy, and are often overcrowded, poor quality stock. You can also (just for the record) still buy three-bed houses for £250K in my area, which goes some way towards explaining the persistence of street cricket.

But like everywhere else in London, rents are rising fast, and house prices are recovering. The massive investment coming in off the back of the Olympics will drive rents and prices up still further across the borough, particularly once the redevelopment of the Olympic site creates an enclave of high-end family homes in the middle of an (already expensive) Stratford. And while Newham’s mayor is right to say that astronomical central London prices and rents have pushed more and more people into the outer boroughs, the answer can’t be to push poor families further out and create yet another two-tier borough.

This isn’t really about the housing benefit bill, or benefit caps, or even electioneering off the back of these. It’s about a housing market in London that is completely broken, and in the process is breaking the back of the city’s poorest residents.

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Nancy Kelley

Nancy Kelley is deputy director of policy and research at the Joseph Rowntree Foundation.

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1 Comment

  • Rod Davies

    IMO the issue of London’s housing crisis is rooted in issues that go back decades and are very complex, and reflect a national lack of appetite to engage in a debate about how to sustain the nation and achieve balance across the country. As long as I can remember (back to the mid-1960′s) there has been a steady flow into the South, and failure to ensure reinvestment in the post-WW2 period in the industrial North. Like many of my peers I fled from the NorthWest in the 1970′s in pursuit of work and after more than a decade of migration ended up in South London. I would have liked to return to my home on the Mersey, but there were no jobs.
    Although i was vaguely aware of it beforehand, it wasn’t until I lived abroad that I appreciated just how London-centric UK’s self-projection was on the international stage, and the degree to which potential investors were effectively steered away from investing outside of the Thames Valley. Even though when I worked in Germany I was asked by a bewildered Head of Personnel why it was that UK held such negative attitudes towards the North and Northerners when his experience was that they were amongst the best workers in the EU (literate, numerate, reliable, safe and above all sober!). Frankly despite the lengthy discussion, I had no real explanation as to why UK Plc was so disparaging of a large section of its own population.
    UK Plc also imagined that the “market” could & would respond to demand and produce sufficient housing etc. But in London unless there was mass high density development, there was no possibility that there would be sufficient affordable housing to meet demand. It was interesting to hear Mrs Thatcher during a visit to Hong Kong speak of emulating HK’s laissez faire market approach, clearly oblivious to the fact that HK govt had a policy of mass construction of low cost high density housing adjacent to commercial / industrial centres as a mechanism to suppress wages, and very stringent controls upon minor items like the costs of school uniforms & books, and public transport. Despite its free-booting reputation HK’s entrepreneurs knew that only through the containment of basic living costs could people invest in themselves through education, and the workforce develop to meet evolving market needs.
    UK Plc had long rejected high density inner city living, and opted for a far more expensive low density approach with vast swathes of land being consumed. This option was very expensive to maintain as the basic infrastructure had to be equally vast to service these developments. The cost of delivering services to these communities is proportionately higher, which consumes far more of the national commonwealth and denies us the resources to invest in the disadvantaged areas in city centres.
    UK also has the belief that we are all entitled to equal public services regardless of the life-style choices we make. In a large outer London borough where there will be inner high density areas and outer leafy low density areas where the difference in population density will be around 5:1. In the high density areas the population will be much closer to the services centres (i.e hospitals, council office, waste transfer stns etc), and they will used a far lower proportion of the collective infrastructure in their daily lives. Although there is a focus upon unemployment in the high density areas, this does not reflect the numbers of people economically inactive who draw heavily upon public services. In terms of revenue per hectare, the council derives greater income from the high density but delivers the same level of services, regardless of cost, such as refuse collection. As one analyses the utlisation of the community commonwealth it can seen that the outer wealthier areas consume a greater proportion of the resources, and that the inner poorer areas subsidise the outer areas. It one factors in health & environmental impacts the picture worsens. If we were to develop business models for each ward within a council area, where council tax, business rates and other charges remained in that ward the inner areas would have a surplus while the outer would have to negotiate reductions in services.
    As a nation we have run away from addressing the fundamentals of sustaining the nation and providing a decent standard of living and opportunity to everyone. We have contentedly fostered regionalism and the satisfaction of greed. We as a nation have failed to take a strategic view and develop rational stable policies.
    If Newham & other boroughs decide to send its poor homeless to the regions as the only affordable mechanism to address their need for housing then they are simply responding to the market. It can only be resolved through the construction of tens of thousands of homes or an increase in taxation, neither of which appears acceptable to London’s inhabitants in the short term. But the market will ultimately correct itself as the labour shortage caused by this will ultimately force London’s business either follow the enforced migrants, raise wages or lobby for the construction of of tens of thousands of low cost homes.
    But the issue will be that as soon as the tens of thousands of low cost homes are constructed the value of existing housing will fall in line with market supply and that will hurt Londoners in their pockets.
    It’s a tough issue, it needs in-depth national debate and analysis of the costs & consequences of our life style choices, and then some hard decision making. To date we have run away from all of these.

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