Housing is now financialised, like the rest of market capitalism

The enforced sell-off of housing association homes, at the same enormous discounts as under Right to Buy (£70,000+ for a flat and up to £102,000 for a house, is driven by the two Tory goals, not only to act as bribes for voters at election time, but also to bring homes as an asset into play in the private market.   Implicit in that goal are two other Tory presumptions.   One is that rents should also be determined by the private market, and the euphemism of ‘affordable rents’ is simply a con to distract from the truth that such rents are a teeny-weeny bit below market rates on their way to reaching full market levels.   The other is that while tenancies are in principle inferior to ownership, Council tenancies which charge a ‘social’ rent of around half of market rates are anathema.   Council tenants, like scroungers in the Tory panoply of poisonous misrepresentation, are pampered, not taking responsibility for their housing, and needing to learn the benefits of individualism.

This explains why the Tories, on coming into office in 2010, cut the capital funding for social housing by no less than 60%, despite the enormous shortage of such housing.   Then they scrapped secure tenancies and introduced fixed term tenancies.  Still they harassed Council tenants further by imposing means tests  so that if tenants improved their lot and increased their income – the very model of aspiration that the Tories like to preach – they can be forced out on the grounds that that they no longer need a Council tenancy.   The implication of this in the Tory psyche is that Council tenants have no security of tenure and no rights that cannot be overturned by government fiat.

The same morality (or immorality) is now being applied to working class estates which may have been built under charitable auspices by Victorian philanthropists, but then a century or more later the descendants of the original founder are hard-up (or greedy for an easy killing) and sell to private developers or private equity.   If the latter then decides to demolish the estate and replace it by building expensive homes for sale, the tenants are subject to eviction and, if they’re lucky, offered alternative accommodation in (as in one case) Hastings, Birmingham or Manchester.  The financialisation of housing proceeds apace and a community to decent and secure housing for all evaporates.

This is not only a vile policy, it also has perverse results.   Tory-run Westminster tried to sell its Council housing in the Homes for Votes scandal in the 1980s.   Now it has been ruled by the Supreme Court that it acted unlawfully in forcing a single mother to move to Milton Keynes, and today faced huge bills in providing temporary accommodation for homeless families.   It has just spent £20m on buying back 45 homes previously sold under Right to Buy so that it can re-house families who are over-crowded or affected by regeneration schemes.   We haven’t heard the end of this saga yet.

7 thoughts on “Housing is now financialised, like the rest of market capitalism

  1. Another excellent post, but I’d also add that since many people living in social housing are on low or insecure incomes or benefits often due to age or disability; the misguided aspiration, (at the root of the sub prime crisis and it’s dire repercussions,) that we’ve all had inflicted on us, (a house as a financial asset not as a home,) post Thatcher is not just unrealistic but is even wrong headed.

    But all the Tories and their vile mates can see is yet another tranche of property potentially up for grabs that they can get their sticky fingers on and as you pointed out previously, 2 thirds of the council houses purchased under right to buy have ended up as part of a commercial, to rent, property portfolio, and not owned by the tenants.

    But as pointed out previously Blair had 13 years to build more social housing and couldn’t have cared less about it or about those people for whom it was intended as affordable, secure and decent alternative to buying.

  2. Is there any evidence that low income housing association tenants would be able to buy their own homes – even at huge discounts ?

    Or would it simply open the door for private companies and landlords to get their hands on them at a knockdown price ?

    Hard to see how this policy can possibly help the millions of people seeking affordable rented homes.

  3. It’s not intended to help, ” the millions of people seeking affordable rented homes,” it’s intended to put more semi public assets into the hands of Dave’s mates and sponsors, (the brain dead policy of paying rent directly to tenants and not to the landlord is actually part of that policy,) based on previous experience I would anticipate a tranche of policies, (the new right buy being only one of them,) intended to effectively bankrupt the housing associations, (as with the NHS,) so that the banks can then swoop in and snap up these, “distressed,” or orphaned properties at a huge discount and transfer them to the private sector.

  4. Also and this in neglected in most analysis, “giving away,” discounted, (subsidized,) social housing doesn’t simply rob a Housing Association of an asset on the form of a particular property it also deprives them of all the future revenues and income that should be generated from that property, which is essentially robbery by the government; once again of the least well of to the benefit the better off.

  5. Housing is a fundamental of human rights, but the Government are making life difficult if not intolerable for a huge number of people.

    It’s good to know that at least the courts offer some protection, although accessing legal aid has also been made more difficult. Heads the government wins, tails ordinary people lose.

    What’s happening in London amounts to social cleansing. This is devastating to the people concerned, as they’re usually vulnerable in some way and need to have their support network of family and friends near at hand. Being forcibly transported to far away cold and wet Manchester (well, it’s much colder and wetter than London) must be horrendous and totally devastating for them. Also, the opportunities for these people to find work in already impoverished areas must be greatly reduced than if they had remained in London.

    The government should govern for the good of the country. This means the people in it and not corporations run by their friends and donors!

    Many of the Tories’ policies are so poorly thought out that they have resulted in costing far more money instead of making savings. Having evicted or hounded out the previous tenants due to the bedroom tax, some councils are now sitting on a number of larger properties which now remain empty as people can no longer afford to pay the rent. Where’s the sense in this!?

    The benefits cap of £23k works out at £442 per week. Many people who are now working pay far more than this just in rent, let alone other essential expenses, such as food and fuel. What’ll happen if they lost their jobs? Insurances can’t be relied on to pay up, especially if they develop an illness which cannot easily be diagnosed, and many people can’t afford the insurance premiums on top of all their other expenses.

    Whilst on the subject of social housing:

    A friends’ daughter who has mental health problems lives in a nice little flat in Gloucester, paid for with her benefits as she’s unable to work. Her flat was recently transferred from the council’s ownership to that of an housing association. Consequently, her rent was increased to an unaffordable amount.

    To make matters worse, the changes resulted in her receiving letters telling her that her benefits had been terminated!! This is the sort of thing that pushes vulnerable people who are already in a fragile state of mind into committing suicide!

    Fortunately, in this case my friend was able to help her daughter fill in copious forms which resulted in admittance that an error had been made. This took an inordinate amount of time, during which this lady suffered a tremendous amount of stress which understandably exacerbated her fragile condition; she has also recently been diagnosed with cancer and is awaiting treatment. The stress must have been intolerable! Many others don’t have anyone to help them (especially if they’ve been transported away from their families) and some areas no longer have CABs, due to all the cuts.

    Life in this country is being made evermore difficult for people, especially those who are less able to cope, whilst already well off people prompted by sheer greed are raking it in.

    Although fortunately none of these issues affect me personally, I am greatly saddened at what’s happening in this once fair and just country and find our government’s actions quite abhorrent.

  6. Here’s another “Tory” in the Labour Party:

    “Labour should not have sought to control rents by regulating landlords, the party’s new shadow chancellor has said.”

    “Chris Leslie, who is a landlord himself, said the party’s policy of limiting the speed of rent increases for tenants had upset people seeking to profit from housing by implying that fast rises were exploitative.”


    The party needs to have a good clear-out.

  7. I love it not realy since that woman and blair councils lost the right to build govern their housing having to sell it offf beggers belief doesnt it then we have the housing associations who ripe you off nice people who incidently had the monies to build property’s from the tax payers lovely jubbly isnt it two in to their one part to get that new build ops tory helping tory but now thatchers blairs ways have the poor lost fighting amongs themselves untill that day everybody gets outside and tell this lot no more untill that day jeff3

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