I Thought Things Were Already Bad….
photo by bob the lomond via flickr
The title to this blogpost comes from a member of the public who lives in the East End of Glasgow. Its taken from the Herald, some time ago, and I don’t think I’ve seen anything else written that sums up how I feel about the situation our country is currently in.
The years prior to the Credit Crunch are often portrayed as the years of milk and honey, where everyone was well off and no one had a care in the world. Free bus travel for the elderly, free prescription charges, no tolls (of course we still have these, but for how long?) etc.
But I remember a world where there was under investment in huge swathes of our public services, but one sticks out for me particularly, and one that is being attacked on a UK level by the Tories and the Lib Dems, and in Scotland by the SNP. Its housing. Its a huge issue, and it isn’t going to help that the Scottish Government want to cut it by a massive 19.3%.
The huge increases in property values in the last decade or so have had consequences across the housing sector. From Housing Associations being priced out of buying new land to build high quality affordable housing by private developers who know they will make a killing with a build em’ cheap, sell em’ high financial model, to first time buyers who have to raise tens of thousands of pounds for a deposit so they can buy their own home.
These land value increases have simply contributed to the inequality within society- gentrification of both rural and urban areas grows as only people with access to capital and who can afford a mortgage can live in certain areas. Many small rural communities are completely off limits if you’re budget can’t stretch to £150,000. We are still suffering from Thatcher’s right to buy, where people in the poorest strata of society were effectively left with the poorest quality housing stock- and there has been little attempt to genuinely rectify that situation.
The SNP to their credit have stopped right to buy and started building council houses, but doesn’t go nearly far enough. Scottish Housing Associations still struggle to get enough houses built or refurbished to a live-able condition in their attempt to get the 160,000 people in this country on a waiting list into a home. This means thousands of people still go to sleep each night without a proper roof over their head, a place they can really call a home- which is what a house should ultimately be. This should be an outrage. This should be an absolute priority.
And yet, government after government continue to under invest in this vital element of society- the solution is relatively simple. We need to build more affordable housing and now. I often think about what we could do with £2.34 bn the Scottish Government (and all the other parties for that matter) want to spend on the Replacement Forth Road Bridge. Normally I think of Rail upgrades or sustainable transport, but I now believe the priority should be approximately 92,500 affordable homes.
A 19.3% cut in the budget for housing will only see more people struggle, and inequality grow.
I’ve just started a family and am looking to upsize.
I’m still getting rid of a bit of debt at the moment, let alone building any kind of meaningful savings, but I’m already on the housing market with a bit of equity. So, if I sell my one bed flat now, once all the fees etc have been accounted for, I would be able to buy a property around the £140k mark with a 10% deposit (i.e. borrowing about £125-£130k from the bank). Great!
Except for two things:
1/ There’s bugger all worth buying in my area for that amount
2 The bank rates on a 90% £130k mortgage mean that my monthly repayments would be around £800 to £900 per month!!
Sorry Mr. Banker and Mr. House Builder. No can do. I think I’ll just stay put thanks.
My one bed flat may be a squeeze, but its safe, comfortable, affordable, and a home, and there are people far worse off than we could imagine.
The thing is though, and I’m no expert on this by any means, if there are lots more people in a similar situation to me who just cannot afford to buy, whether its because of prices, lack of deposit, bank charges, or whatever, surely sooner or later the market will have to come back from cuckoo land, and/or the banks will have to lend at better rates?…
Remember the days before duel income families became the norm and you could buy a comfortable family home from a single salary?
Then, when households started bringing in dual incomes and had disposable income, the banks and housing markets must have rubbed their hands with glee. “Oooh, look, now we can charge people lots more!…”