If we value social mobility, we have to value social housing

Next year will mark the centenary of Lloyd George’s ‘Homes fit for Heroes’ campaign and the requirement by law of Local Authorities to provide council housing. 100 years on social housing still divides politicians of all persuasions and delivering it remains on the evidence of my lifetime as pressing and yet insoluble a challenge as it certainly was back then.

Why should delivering social housing be so problematic? Whether you believe welfare is a ‘ransom’ or a moral imperative, the electoral demand and need is there, yet (money aside) the ability to execute delivery eludes all governments. Conservatives, in particular, find social housing difficult yet, at first glance, one might be forgiven for thinking that any exercise that sows the seeds of another generation of Right to Buy residents and creates a new generation of socially mobile and grateful Tory voters would be a ‘no brainer’. For almost a century the Conservatives have promised to usher in a ‘property-owning democracy’, a concept popularised by Margaret Thatcher’s Right to Buy policy. But Right to Buy was not a panacea. The same policies that initially promoted ownership acted to reverse it. Right to Buy created more homeowners but it did not create more social housing. A third of Right to Buy properties fell into the hands of private landlords.

There has always been a tension between the party’s free market liberal instincts and the patrician desire to protect the environment. Tories vacillate between Thatcher’s vision of a home owning democracy to a reluctance to build new social housing for fear it might create Labour voters or a fear that new mass home ownership might result in the desolation of our green and pleasant land.

For the right, rising home ownership was once a reliable route to government. Former Labour voters, like my father, still speak with fondness and gratitude to Margaret Thatcher for the Right to Buy scheme. Even today, senior Conservatives know that owning property massively increases the prospects of someone becoming a Conservative. But it is a long game in these short-term times and that, in the end, explains successive Conservative governments failures to do the building in the first place. The problem is that as home ownership has declined, and in increasingly sharp measure, the Tories have struggled to sell capitalism to a generation without capital. There is a generation now who are married with kids, have jobs and pay tax but cannot get on the housing ladder. For them the whole idea of capitalist home ownership must feel irrelevant and certainly not worthy of support. With home ownership in England at its lowest level for 30 years and Conservative party support among 25 to 40-year-olds fell away, a group that had supported them in 2010 but has since been priced out of the housing market, with the number of homeowners under the age of 45 dropping by 900,000. Housing illustrates people’s concern that their children and grandchildren are not going to have the chances they did. By not investing in the next generation of social housing we have pulled the ladder up and damaged social mobility. Rather than expanding supply, too many governments have focused on subsidising demand because ultimately all homeowners feel better for that. More supply of cheaper homes does not mean higher margins for builders, developers or prices for current owners.

There’s plenty of evidence that social housing increases social mobility too. It is easier to get on in society, educationally and in the job market, if people have a secure, decent home. It creates more balanced communities through a mix of tenure, and sensitive allocation policies, can protect against the danger of stigmatisation.

As a result, consecutive centrist governments have focussed on fiscal flagship schemes to help more people get on the UK housing ladder. These have little impact on improving social mobility as better-off buyers are most likely to benefit from the support. A report last year for the Social Mobility Commission into the impact of low-cost homeownership schemes found that those benefitting from schemes – such as Help to Buy – earn more than one and half times the national working age median income. Around three in five first time buyers said they would have bought anyway and that the scheme merely enabled them to buy a better property, or one in a better area, than they were originally looking for. The high cost of housing means many low-cost homeownership schemes are beyond the reach of almost all families on average earnings. Only 19 per cent of Help to Buy Equity Loan completions to July last year to were for homes worth less than £150,000. If households put down a five per cent deposit, the researchers found that this exceeds the 40 per cent limit of affordability for a median-income working age household.

We have written previously that our housing crisis needs bold action, not the re-arranging of deck chairs. In the context of the housing market, there is very little money available to government and not enough will power. We are now a divided nation, demographically and politically. But there is no appetite to take the required risk. Mrs May is not a natural risk taker. Indeed, the last election was the one political gamble she has taken and the result has probably confirmed her risk averse view enough to deter her from another potentially difficult course of action. She may have promised to make it her “mission” to fix the broken housing market, but she joined a campaign to block a new development on a greenfield site in her Maidenhead constituency. The truth is that the immediate alternatives are no more wedded to the idea of delivering social housing either and Labour’s new found left have no aspiration to create social mobility that we have seen in recent decades. The conclusion must be that, unless we see real vision (not rebranding), the social housing building of the 50s and Right to Buy revolution of the 80s were a ‘one off’ event that led to social mobility the like of which we may not see again.