TV review by Mark Langabeer, Hastings and Rye Labour member
The ITV programme Tonight is about housing costs and it asks, how high will house price go? The programme explains that the boom in house prices during the pandemic has been partly driven by working from home.
Large numbers of city workers have moved out of London and its suburbs and settled in more rural areas where they can work from home for the first time. One woman interviewed, said that she bought a house a year ago for £950,000 and recently sold it for £1,250,000. According to Tonight, house prices are rising more than at any time in the last seventeen years.
The housing market has been described as a sellers’ market, with offers being made often well over the original asking price. ‘Gazumping’, whereby an agreed sale is ‘hijacked’ by a higher offer, has made a comeback. The programme interviewed a guy who had agreed a price but whose vendor then received a letter from another prospective buyer, offering £40,000 more.
Tonight drew the obvious conclusion that the rise in house prices is preventing many young people from buying and who are therefore being forced to rent privately. The programme also noted that those that who are well-off enough to buy second homes are contributing to the lack of affordable housing for others.
The Tories have pledged to build 300,000 homes annually, but there are nowhere near that number being built and those that are going up are simply unaffordable. The Tories have also introduced a , ‘help-to-buy’ scheme, costing around £29 bn, but while this has lined the pockets of builders and developers, it has also contributed to pushing up prices.
The Tonight team interviewed a developer who complained about the planning system, which he claimed was preventing some of his new builds. Local authorities argue that nine out ten planning requests are actually approved It might be that those that are questioned are querying the developers obligations to meet social housing needs and homes of sufficient size. British builders are notorious for throwing up unaffordable homes like rabbit hutches.
Negative equity…we’ve been there before
The programme interviewed a couple of experts who had differing views on the direction of travel with regard to house prices. One suggested that prices would continue to rise, but the other thought that prices would begin to fall next year. If it is a ‘bubble’ then the longer it continues, the bigger will it crash. It might mean some houses become more affordable, but for those young families who have struggled to get a mortgage and a deposit, it means being pushed into ‘negative equity’, where the value of the house is less than the money owed on the mortgage. We’ve been here before.
The programme, as you’d expect, offered no solutions to the housing crisis, the obvious one being the construction of large numbers of social housing for (cheap) rent. That ought to be a central plank of a Labour housing programme: it would offer a huge incentive for young people to vote Labour.
We are facing a housing crisis. It is that bad. And we need a crash programme of council house building and the compulsory purchase of empty homes to solve the problem of affordable housing. Labour should also argue for the end of ‘land banking’ by developers, whereby they sit on land and wait for prices to rise before they consider development. These developers feed on high prices and shortages.
The cost of living crisis will result in a significant rise in homelessness and debt as rents continue to climb inexorably beyond the capacity of working class families to pay. Private landlordism is out of control. It is time for the Labour movement to lead a campaign to drive the Tories out of office and introduce policies that support the needs of the great majority.
The programme is available on the ITV hub here.
