Tag Archives: housing crisis

The Rich Will Destroy London Like They Destroy Everything Else

1-hyde-park

One Hyde Park, where flats cost £100 million and no-one lives in them.

It is difficult to imagine a more grotesque situation than entire streets full of mansions lying empty in Chelsea, Knightsbridge and Kensington whilst just down the road the number of people sleeping in shop doorways soars. But this is the sad reality of a reckless free-market economy which turns our homes into just one more commodity to be gambled with by the rich.

It is impossible to guess just how big the London housing bubble will get, and how far outside of the capital the impact will stretch.  The news that house prices have risen by 18% in just one year should chill everyone who hopes to continue actually living in the city.

London’s housing market is being turned into a billionaire’s casino, and as more money pours in those returns will keep getting bigger.  Or at least they will until someone blinks.  And then the whole sorry scam will come crashing down, leaving the not quite so obscenely rich – who thought they were the players – discovering that they have been well and truly fucking played.

The end result could be a disaster as London is split between a minority of buy to let landlords, who have several homes, and tenants with none who can no longer afford the rents demanded to compensate for mass negative equity.

The real fucking tragedy though is that the only thing worse than the bubble bursting is prices continuing to soar.  Already most of the capital is unaffordable for those on low incomes.  With housing benefits now capped far below rents in many areas, the vast majority of London’s private tenants are only a P45, an illness, or an accident away from being socially exported from the capital.

As prices soar the creative heart of London will be ripped apart.  The days when young people could come to the capital, live in a squat, or a cheap if grotty shared house in somewhere like Hackney or Brixton are already long gone.  It is no surprise that beyond over-hyped internet start ups and hipster twats, London’s cultural life is decaying from the bottom up – those at the top just can’t see it yet.  Artists, actors and musicians will be forced to join the exodus out of the city along with street cleaners and care workers.

Social housing is now being re-structured as a stepping stone for young middle class professionals, with laughably called affordable rents set at 80% of soaring local rental markets.  Many of those who already have a council flat are being bedroom taxed out of the capital.  When these tenancies end, these homes too will convert to ‘affordable housing’ in many boroughs – which means they will be unaffordable for most people.

The problems do not end there.  Hundreds of thousands of children are currently growing up in social housing in London who will never be able to afford to live here when they have families of their own.  Meanwhile as the so-called ‘generation rent’ approaches old age, few will have pensions which cover London rents.  The housing crisis in London is only just beginning.

Yet to hear the debate about London’s housing problems you would think the problem only affects ‘young professionals’ hoping to get on the housing ladder.  It is as if the rest of us – millions of us – do not exist.  The people who built this city, clean it, drive the buses and look after its children are being quietly abandoned with no thought at all to our lives, housing needs or futures.

Across London, from Deptford to Tottenham, luxury flats are springing up like a virus – the first warning to the poor that this is no longer our town.  There was a time when gentrification took a couple of decades, areas like Notting Hill did not become the playgrounds of the rich overnight.  Now as soon as a Foxtons opens next to the launderette you know you’re fucked.

When this onslaught is finally complete London will die.  No-one wants to live in a city full of braying chinless wankers jabbering into smart phones about house prices all day.  A global city of the super rich may sound like a utopia to the likes of Boris Johnson or the toffs in government.  But they will destroy London like they destroy everything else.  The end result will be a city that may have lots of places to buy fucking artisan cupcakes or quaff Champagne, but it will be a place with no soul.  Their money will not be able to fix that.

Follow me on twitter @johnnyvoid

Higher Rents And Less Council Houses: Osborne’s Blundering Cure For The Housing Crisis

chicago-rent-strikeIn under two weeks hundreds of thousands of the least well off people in the UK will find a shortfall in their Housing Benefits due to the bedroom tax.  At the same time the benefit cap will be introduced in three London boroughs, which will see thousands of London families no longer able to pay the rent.  This chaos is to be extended throughout the UK from July.

Changes to Council Tax benefits also come into effect next month leaving people living on as little as £72 a week (or less in some cases) now eligible to pay Council Tax in many parts of the UK.  The Benefits Uprating Bill currently passing through the House of Lords will see Housing Benefit rises capped at 1%, despite rents rising by over ten times that figure in some areas.  Along with cuts to in and out of work benefits, and the public sector pay freeze, many of the lowest income households are due to see that income shrink on an annual basis.

From October this year Universal Credit will start to be expanded across the UK.  Benefit sanctions, meaning people left with nothing and currently running at about half a million a year, are likely to rise due to ever increasing benefit conditionality.  Hundreds of thousands more are being impoverished by the Atos regime for sickness and disability benefits.  A fifth of disabled people are aset to lose Disability Living Allowance over the coming years.

Universal Credit will feature ‘direct payments’, meaning claimants can no longer have housing benefits sent to direct to landlords.  This had led to rocketing rent arrears everywhere it has been tried as claimants already forced to choose between heating and eating are given a large monthly cash payment to pay the rent.  Instead it pays for nappies, or a broken washing machine, or debt repayments to high street loan sharks.  Housing Associations have warned they are cutting the number of new homes available due to stockpiling cash reserves to pay for the inevitable spate of evictions.  So called ‘affordable’ house building collapsed last year.

Even before these changes every measure of homelessness is rising.  Already many councils can’t cope.  Westminster Council is housing families in £3k a week hotels after they have been evicted due to the housing benefit cuts which have already taken place.

Anyone who has been paying attention will point to both the chronic shortage of council housing and soaring rents as two of the key factors behind the housing crisis.  George Osborne’s answer to the problem is higher rents and less council houses.

Osborne yesterday extended the discount for London tenants who wish to buy their council property to £100,000.  What little social housing remains the Chancellor is desperate to sell off.  Once all right to buy houses sold had to be replaced by a new council house.  This rarely happened in practice, but that was the idea.  But even that has been thrown out of the window.  New homes designed to replace those flogged off will have rents set at 80% of the local market and fixed term tenancies.  The long established tradition of genuinely affordable housing on secure tenancies managed by Local Authorities – and often making them a profit – has been glibly demolished by this Government.

Not content with this Osborne has also introduced a series of measures which risk wildly inflating the housing market even further.  Gideon wants to help more people buy houses by making them more expensive.  His Government backed mortgage subsidy, even available for those looking to purchase half a million pound mansions, is likely to lead to a bonanza for landlords.  Whilst he has claimed this new scheme will not be on offer for specifically ‘buy to let’ mortgages, he seems relaxed about it being available to those who already have one or even more houses.  Which simply means a little paper shuffling on the part of grasping landlords and bankers and the scheme will end up being used to buy properties to rent out.  Or leave empty as in the case of some of the most valuable properties in London, bought up as investments with laundered money and then left uninhabited.

The only predictable outcome to Osborne’s scheme is higher rents in both the  social and private sector.  For now Housing Benefits – meaning tax payers –  will pick up the tab for shoveling billions into the pockets of landlords.  The already much maligned housing benefit bill could be set to soar to levels that can barely be imagined now.

According to The Guardian, Osborne’s plan to avoid this could be to cap social security spending if they win the next election.  Should this happen then it seems inconceivable that the current legal protection to prevent children, pensioners and disabled people from street homelessness could be maintained.   It will be just too expensive.  This is the choice the free market offers on housing.  Tens of thousands of homeless children or tens of billions paid to landlords by the state.

Of course this whole tragic mess could be halted overnight if everybody stopped paying their rent.

Follow me on twitter @johnnyvoid