The Theory of Everything

“Make me one with everything”, is the Dalai Lama’s famous request to a New York hot dog vendor. Whilst Buddhism has a unifying theory of happiness I have a unifying theory that the housing crisis underpins almost every social, political and economic problem of our time.

Take inequality. Housing is a primary cause of wealth inequality between the rich and poor. According to John Healey, MP, the bottom property wealth decile has £2 billion of debts but the top decile own some £1.5 trillion. The wealthiest 10 percent own 40 percent of property wealth in the UK, the bottom half own just 8 percent. As house prices have risen so the inequality gap has widened.Take inter-generational unfairness. Most pensioners have never had it so good, but over a third of younger people feel they are worse off than their parents were at the same age. Four in ten renters fear they will never own a place. But as the baby boomers die off so their housing wealth will transfer to their children. Housing is the main source of wealth inequality between owners and renters. Renters have no property wealth whereas the median property owner now has £200,000.

But as the inter-generational divide widens so the Bank of Mum and Dad (BOMAD) has stepped in to help its lucky offspring. The BOMAD is now a top ten lender, providing £5 billion of loans, at an average of £17,500 per property. But if your parents have no resources you will lose out, so the wealth gap will widen again.

Take the economy. We all know that housebuilding has huge multiplier impacts on the wider economy, but as a growing proportion of income is swallowed up in the vortex of the housing market this means less money for investment in productive sectors. As Red Brick recently revealed, the BOMAD also means older people also have less money for consumer goods, holidays and savings, so the wider economy also suffers.

Take politics. Politicians fear falling house prices because older people, who are more likely to be home-owners, are almost twice as likely to vote as younger voters. Older homeowners are also more likely to oppose housebuilding, so politicans won’t take action to fix the housing crisis, even though a long-term reduction in house prices would benefit us all.

Take Housing Benefit. £25 billion a year is wasted on the intersection of high rents and low incomes – almost a fifth of what we spend on the NHS. The #SHOUT solution, investment in social rented housing is “staring us in the face”, and could save almost a trillion pounds within a generation or so if only the government could put its dogma to one side.

Take community cohesion. Wealth inequality and intergenerational unfairness damage wellbeing and cohesion. Someone who has bought their home outright is likely to stay there for 24 years. Private renters stay 4 years, and areas with a high turnover are less cohesive. Pay to stay and the end of lifetime tenancies will make this worse, causing community churn on housing estates.

Take the booming Private Rented Sector. Most people in the PRS don’t want to be there. And around a third of PRS properties are not decent, so millions of people are forced to live in homes that could harm their health. Shelter says that one in ten renters had suffered ill health due to their housing conditions.

Take the growth in rough sleepers. According to Crisis, in London 4 in 10 have problems with alcohol, 3 in 10 a problem with drugs, and 45 percent have mental health problems. Time spent on the streets will only worsen these problems with consequent impacts upon society.

Take the NHS. Many of its difficulties are caused by underlying housing problems. Bad housing makes you sick. “Bed blocking” is caused both by our failure to build smaller, suitable homes that will tempt older people to downsize, and the failure to use some of the NHS budget funding housing providers to provide supported and extra care homes.

The underlying cause of all these problems is our decades-long failure to build enough homes of the right tenure, type and affordability. It sits like a giant, smothering toad upon everything and everyone. All of this is set to get worse with the loss of 350,000 social rented homes over the next five years and the impact of the worst-ever Housing Act that will see the end of investment in affordable rented homes, instead pumping public money and planning consents into a dysfunctional housing market, that will guzzle public money like a giant cuckoo, to no long-term benefit.

Meanwhile, the coffee shops are full of Generation Renters, eking out a single coffee for hours with their laptops because they have nowhere decent to work. Serving them are low-paid staff, often migrants, earning more than they can at home but forced to live with ten or twenty others in cramped conditions to cover the rent. Outside, the streets are crammed with Generation Rent cyclists, fighting for road space, because they cannot afford the cost of public transport.

Bad housing is having impacts on our society in ways that we barely understand.

Joining up the dots between all of these problems and making the case for housing as infrastructure, as the fundamental bedrock of a decent society, is the challenge for this sector. We have to make the case for change and if we don’t do it, who else will? When the Dalai Lama proffers a twenty dollar note for his hot dog, he waits a long time for his change. When he asks for it, the vendor replies, “Change comes only from within.” Quite.


(This blog first appeared in Inside Housing on 17th May 2016)

2 thoughts on “The Theory of Everything

  1. This blog is spot on Colin- It infuriates me that Social Housing is almost seen as an inconvenience to be swept under the carpet, rather than the fundamental bedrock it is. Fixing the problems aren’t unfortunately a quick fix and politicians are too focused on what they can impact in their 5 year cycle, rather than what is ACTUALLY important to citizens in the long term. They don’t want policies that will have a lag in their impact as the other party could benefit! If politics could be placed to one side for a moment (never going to happen!), then perhaps we’ll get a holistic solution that could impact everything you talked about above.


  2. Thanks Barry – I agree that politicians seem reluctant to take a long-term view of housing. Someone suggested recently that planning for housing over the long-term should be taken out of the hands of politicians in the same way that the Bank of England now has independent control of interest rates and inflation. It seems to me this could be a good idea, particularly as politicians are more likely to be swyaed by the views of older, home-owning voters at the expense of younger, priced-out voters.


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