Guy Brandon Posted: 21 November 2011
Keywords: Finance & the Economy,
The government has unveiled plans to address the lack of affordable homes and increase the number of first-time buyers. A £400 million fund will be used to restart stalled building schemes, and buyers will be able to borrow 95 percent of the new home's value, with the government underwriting part of the risk. 'Right to buy' will be made available once again, with the money from sales of social housing going back into the building industry to create more affordable homes.
Leviticus 25
Biblically, this idea has a lot to commend it. Private ownership of property was an ideal that early Israel took very seriously, with each family receiving a permanent stake in the Promised Land (Lev. 25). This maintained rootedness and community cohesion, and gave families a shared economic stake. Along with the debt cancellation laws, the land laws meant that no family would be reduced to a state of long-term poverty.
The government's initiative has the joint aim of stimulating one sector of the economy and reducing the housing crisis: 'It is hoped that about 450,000 mainly affordable homes will be built by 2015.' It is impossible that either aim will be met solely by the new policy. Demand for housing far outstrips supply, and will continue to do so for the foreseeable future - 4.5 million people were on housing waiting lists in 2010. As well as an increasing population, average occupancy rates have been steadily falling for the past 50 years.
Family fragmentation
In 1961 the average UK household size was 3.1; in 1971 it was 2.9 and by 2009 it was 2.4 (National Statistics). The proportion of single-person households doubled from 14 percent in 1961 to 29 percent in 2009, driven by three categories of people: mobile and single young professionals, middle-aged divorcees, and older people who live alone.
There will be a predicted 27.8 million households in England by 2031, with an average of 2.13 people living in each. If average household size could just be maintained at current levels, that would save building over 3 million houses. For every 0.1 people it can further be reduced by, another 1 million houses would be saved.
Although the government's homebuilding initiative is a step in the right direction, without addressing the underlying factors that drive fragmentation it will be a drop in the bucket. Conversely, increasing family cohesion and rootedness could have an enormous impact on the housing gap. This might be partially achieved through tax breaks for families (nuclear and extended) who support dependants living under the same roof, and with council tax rebates for joint occupancies.
One question that remains is where that money might come from - and whether it would represent a better long-term investment than the £400 million about to be spent on building houses?
Near where I live there are large tracts of land with boards saying 'New homes coming - Summer 2011'. These are supposed to include 'affordable housing' to use the newspeak term (what's the rest of the housing?). At the rate of progress on the sites, Summer 2012 might be more like it. Planning permission granted to these sites included a requirement for a significant proportion of 'affordable' housing. So it'll be interesting to see whether things now accelerate.
Others elsewhere have pointed out the circularity of responding to the mountain of debt by encouraging first time buyers who can't get loans (sub-prime ring a bell?) to take out large mortgages backed by taxpayers. Politicians of all parties seem to have run out of solutions.
Churches need to be part of a much more radical solution! Small steps can give us confidence that we can help ourselves rather than rely on the failing state or distorted markets. Our church just helped someone buy a family home through some church members 'buying' part of the house with the family taking out a much smaller mortgage. But when you look into starting a credit union (for smaller financial help) you get told "don't, it's too difficult, join an existing one" except that it has nothing to do with your locality, never mind church family.
Barn-building anyone?
Keith 25 November 2011
I meant 'barn-raising'!
Keith 25 November 2011
Thanks for the blog, and for your efforts to think through affordable housing from a Christian perspective.
On the matter of private ownership of property, I don't think that Levitical ownership translates to what we understand as private ownership of property. A current understanding of the law around private property in the UK would be that the owner has the right to use and dispose of the object as their own. This is bounded by law of course and it is on this point that I believe there is a divergence. The 'boundedness' of ownership in Leviticus is predicated upon the land ultimately belonging to God. Land could be rented or sold, but it would have to be returned to the family to whom God had given stewardship of the land in the first place under the Jubilee laws.
Private ownership in the UK, while within the law, is guided by self-interest. I believe that the majority of personal wealth in the UK is held in individual's property, and how this wealth benefits ones family and kin is entirely subjective. This leads into the second issue you raise of fragmentation of the family. How will the wealth of one generation transfer to the next if families are so fragmented? This is one question I would ask with regards to home ownership and affordability. With real incomes faltering and house prices still rising (albeit at a much slower rate than before), the term 'affordable housing' takes on a whole new meaning. Perhaps this doesn't sit within the same issue being discussed in the blog, nevertheless, these are my two pennies. Maybe I should have held on to them as part of a deposit!
Iain MacPherson 9 December 2011