First Person - with Mike Delaney

Mike Delaney
Mike Delaney

LAST week, Fife Council announced plans to invest millions of pounds in putting an affordable roof over the heads of thousands of people in the Kingdom.

The local authority is currently Labour-led, but I should imagine that this aspiration would find favour with most, if not all parties on the council.

This ‘social housing’ - as it is known (what does un-social housing look like I wonder?), will be delivered partly through working with housing associations, such as Kingdom, which already has a track record of replacing derelict council properties with new homes.

Affordable housing is as desperately needed here as elsewhere in the country, but apart from the obvious ‘good’ involved, it would also be a small, first step toward ending, or at least drastically reducing the scope of a practice that has been a long running, but largely overlooked scandal.

For years, millions of pounds has been squandered paying private landlords exorbitant rents, effectively subsidising the kind of property speculation that stoked up the housing boom and, eventually played a part in contributing to the crash.

Public bad, private good

Some of the amounts handed over by councils to private individuals and property companies are quite startling: the mortgage on one home of which I am aware barely scrapes £400, but the landlord who rents it out receives three times that amount from the local authority, which effectively means from me and quite possibly you.

This is not and has never been a good use of scarce financial resources.

Councils were forced into it to an extent because, for most of the years since Margaret Thatcher’s 1980s’ heyday, but also extending into the new Labour years, they had to balance an obligation to house people against what amounted to a prohibition on building public housing.

From 1979 onwards, the mantra was that public was bad and private good.

We were all encouraged to become members of the “property owning democracy”, and assisted in so doing by the introduction of right to buy, not a bad policy in itself had the proceeds been used to invest in new housing, which they were not.

Our mania for owning our own homes is quite out of kilter with most other European countries, where renting is the norm, and where, in my experience, even private rates are way below some of the levels charged in this country.

I am not suggesting that home ownership is, of itself, a bad thing. That would be silly.

Generations of people have benefited from owning their own pile, both in terms of security of tenure - and it is often forgotten how much many of our forebears had to move around, because that comfort was sometimes lacking

- and in having either bricks and mortar, or the proceeds of a sale to pass onto children as a legacy of a hard-working life, prudently lived.

Mortgage chaos

Owning your own home also means that you are not dispensing cash for no return, as in the case for renting.

But this is, all conditional on being able to afford to do so.

To obtain a mortgage up until the end of the 1970s was a daunting affair for most people and would normally involve stressful meetings with the bank manager, a then all-powerful figure. It was a strict system, but it worked.

What happened post that era was the exact reverse, with borrowers given many multiples of their income to allow them to compete for homes which, prior to the slump, were trading at sometimes ridiculously expensive prices.

Like much of our current economic system, it was borrowed from the United States, where the ‘sub-prime’ mortgage crisis that left the western World on the brink of financial Armageddon started five years ago.

The property crash and the loosening of restrictions on public house building will hopefully see a better balance achieved and, eventually, start to ease one particular gravy train off the rails.