Buy to Leave: We need to talk about housing

Millennials need to stop complaining about the housing crisis, Sean O’Grady wrote in the Independent on Friday.

Despite baby boomers growing up in an age of free education, affordable property and a prosperous job market they had it much worse.

If you wanted to play Snake on your phone in the 70s you could forget about it. Want a package holiday to Magaluf? No chance. And by far the worse of all, “the most exotic thing you’d find in a British pantry was a box of Alpen”, O’Grady wept. Horrifying.

Housing prices have enjoyed a remarkable boom over the past few decades that is pretty much consistent with the time baby boomers have bought and lived in them.

Those who are lucky enough to own their own homes during the property boom of the 1990s and early 2000s have inherited a £2.3 trillion windfall in a market phenomenon which has widened the inequality gap between the generations, the Resolution Foundation found.

While two in three middle-income people owned a house 20 years ago, now just one in four people from the same socio-economic group can say the same thing.

But that’s not the fault of the baby boomers, nor is it up to us Millennials to bemoan our bad luck on account of our age. Rather, we need to look at the causes for the boom, and the real culprits behind it – the ones who are allowed to buy property as an investment, rather than a place to live in.

Supply 

‘Build more’ has been touted as the answer to Britain’s housing drought by every government for a generation, but it won’t solve the crisis.

For a start, it drastically over-simplifies the problem.

As Ann Pettifor wrote in the Guardian here, speculation in the property market is to blame for stratospheric house price rises.

“When the fuel of private capital, mortgage credit and cash from the bank of mum and dad is supplemented by government subsidies and tax breaks, house prices rise”, she says.

Add to that the fact that wealthy global and non-resident buyers have funnelled more than £100 billion into London property over recent years, and you get a rather toxic mix.

Buy to Leave 

But what about the elephant in the room.

Isn’t the problem that housing supply goes to the biggest bidder, not those in need of it the most?

Hundreds of thousands of homes across the UK are unoccupied, despite widespread concern about a housing shortage. There are 610,123 empty homes in England, according to the government. Of these, 205,821 have been unoccupied for six months or more, the official definition of “long-term” emptiness.

The Bezier building in London’s Old Street is a prime example of this. Despite boasting relatively affordable rents for London the building has been half empty more than five years.

According to Islington Council, in Jeremy Corbyn’s ward, this is thanks to the phenomenon known as “buy-to-leave”, where rich investors, often from abroad, purchase property and leave it empty, not bothering to collect rent money while adding to the nation’s housing shortage.

Resident-less 

So is Britain facing a resident-less crisis more than a homelessness crisis?

If the homes are there than a lack of supply is clearly not the issue. Rather, a lack of willingness from buyers to fill them with residents is more likely the cause.

Viewing it as such could offer the answer for forging a solution for future generations.

The more we argue among generations and the more we ignore the elephant in the room the less likely we are to find a solution that suits everyone.

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