Britain’s hundred-year housing crisis: a century of uneven spending

Peter Shapely | 06 October 2017

In her Conservative party conference speech this week, Mrs May announced that she would make it her mission to resolve the housing crisis. She recognised that the 2017 General Election result had highlighted the inadequacy of the government’s Help to Buy scheme in tackling the country’s housing problems. She promised a further £10bn to bolster the programme and an additional £2bn for more affordable housing, taking the total to over £9 billion. Providing homes at below market rates would, she claimed, signal the government’s return to getting “back into the business of building houses.”

Some basic figures underline the scale of the task she has undertaken. Local authority housing statistics: Year ending March 2016, England show that in 2016, the number of households on the local authority waiting lists was still 1.18 million. This has gone down year on year since the 2011-2012 peak of over 1.8 million, but is still above the 1997 figure of just over 1.1 million. The three main reasons for wanting to be rehoused were unsatisfactory living conditions (overcrowded and insanitary), health reasons and homelessness. At the end of 2016, Shelter claimed that more than 250,000 people were homeless, and that this figure was a conservative estimate. In London, an estimated one in 51 are homeless while in Luton it is one in 63 and in Brighton one in 69. Recent figures show that an estimated 120,000 children from 78,000 families are currently sleeping in emergency accommodation.

Housing crisis invariably refers to a mixture of the poor quality of existing housing, affordability, need and availability. The scale of Britain’s housing problems is nothing new, and neither is the fragmented approach of successive governments. It was the last Liberal government that first tried to resolve the housing crisis after the First World War. Its ‘Homes for Heroes’ policy promised to revolutionise social housing with a large annual building programme, high building specifications and subsidies. The programme had a great deal of success, and it continued under both Labour and Conservative governments, but it was also fraught with difficulties that highlight the fundamental problem with all housing policy. After only two years, national economic problems diluted the specifications and eventually led to cuts in the number of completions. It set the pattern for slum clearance and house building across the inter-war period. Nevertheless, 4 million houses were completed, 1.1 million by local authorities and a further 430,000 with the support of a government subsidy. However, most of the council houses tended to be for general purposes, which meant that the problem of the worst slums (and slum dwellers who could not afford the rents of the subsidised houses) remained.

Governments during the 1945-1970 period repeatedly promised to clear the slums, replace the near 500,000 lost to bombing raids and provide mass housing developments that would transform the housing stock and finally resolve the crisis. New towns and overspill estates allowed for population dispersal and slum clearance programmes to be rolled out. Housing remained a major political and election issue. Labour’s failure to meet its target in 1945-51 was criticised by political opponents at the 1951 election, while the Conservatives in the mid-1950s under Harold Macmillan could boast average completions of over 300,000 houses a year. Yet the crisis continued. By the early 1960s, an estimated 600,000 slums remained. Both Labour and the Conservatives advocated modern system-built designs and tower blocks as the solution to greater clearance and redevelopment programmes. Problems continued. Intermittent funding meant redevelopment programmes dragged on for years, creating the misery of planning blight. Again, spending on housing was linked to economic performance. By 1969, Labour effectively signalled the end of new mass housing programmes with a new Housing Act, which encouraged local authorities to create General Improvement Areas. This shift towards improving the existing stock was reinforced by the Conservatives’ 1974 Housing Act, which allowed councils to designate Housing Action Areas.

Despite all the policy initiatives since 1919, by the end of the 1970s the crisis had not been resolved. Many new developments proved to be unpopular expensive flops that created new problems because of design faults and poor management. Old problems such as overcrowding and lack of basic amenities remained. The 1978 National Dwelling and Housing Survey highlighted the poor conditions in which people lived. The response of the returning Conservative government was to scale down public spending on housing, leading to a moratorium on new developments, and the 1980 Housing Act that reintroduced ‘The Right to Buy.’ This facilitated the sale of nearly one million council houses in ten years. Local government’s role as the main social housing provider was eroded with the transfer of housing stock to non-profit making organisations, a process accelerated under the Housing Acts of 1985 and 1988.

While Mrs May’s promise is to be welcomed, the scale of the on-going problems in housing demands a much greater level of resource allocation. In addition, there needs to be fundamental shift in Whitehall’s approach to housing policy. As public spending on housing programmes has invariably been linked to economic performance, it means that windows of opportunity open only to be shut soon afterwards. Spending on key welfare areas like health and education may expand and retract in real terms, but housing policy has always suffered from damaging swings in the levels of investment and subsidy. Housing policy has never been recognised in the same way, never understood as an area of policy that requires a long–term commitment to investment and support.

Consequently, the country suffers from perennial housing crises. History shows that if these are to be ever resolved to an extent that keeps the problems around homelessness under control, then governments must commit to investment and subsidies as a part of the annual budget. There should be no more moratoriums. Rent controls or rent stabilisation need serious consideration. They have certainly proven to be invaluable in New York since 1942 (and previously in the 1920s). The expense of building and subsidising homes may be prohibitive, but that only strengthens the case for an annual affordable rolling programme that would spread the cost rather than storing up ever-greater social problems through targeting housing when making budget cuts. Housing needs to be treated as a basic human necessity, just as much as health, if governments are ever to break the endless cycle of crisis. 

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About the author

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Dr Peter Shapely is Reader in modern and contemporary history at the University of Wales, Bangor. His research includes government, governance, power relations and non-governmental organizations in nineteenth- and twentieth-century Britain, with an increasing research focus on decision-making and policy creation in the twentieth century. He is the author of The Politics of Housing: Power, Consumers and Urban Culture (Manchester University Press 2007). his401@bangor.ac.uk