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The speaker sets out the goal of expanding home ownership and explains the anger caused by soaring house prices and the treatment of homes as financial assets. This opening frames housing as a political choice rather than an inevitability.
what we want to see is what I've called a property owning democracy we want to help people earn their
housing the goal of a property owning democracy the right of every family to have their own home to increase home ownership by 1 million a whole generation given the security of a home of their own reigniting home ownershipin Britain once again giving millions of young people the chance to own their own homes house prices have reached another all-time high you'd hear a lot about people investing and saying oh that's just my pension for someone whowas trying to get on the property ladder um it made me quite angry you had become a bit of a play thing in financialmarkets developers saw their profits saw on their share price rocket investors and developers have got far too greedy they've made far too much money out of people's
homes when I revert back to 2006 the idea you got to buy a home push your finances to the extreme to buy a home renting is a dirty word I do look back with real
anger it's entirely the government's fault governments in this country failed to build enough homes the thing that makes me angry is that it is a political Choice nothing needed to have happened nothing should have happened that allowed thisMarket to get to this
state
This section explains how Bank of England independence and falling interest rates made mortgages cheaper and helped fuel demand. It also shows how global confidence and abundant lending pushed property prices higher.
I've just accepted Her Majesty the Queen's kind offer to form a new administration of government in this country outside the treasury the arrival of Gordon Brown prompted the unusual sight of a Chancellor being cheered in the
street Tuesday the 6th of May first working day after the election and on that Monday I had come back from playing tennis and I got a phone call from Eddie George the governor at the time he said comeinto the bank immediately he told me that he had just been informed by Gordon Brown that the bank would be given operational Independence to set interest rates I therefore decided to give the bank of England operational responsibility forsetting interest rates with immediate effect the new Chancellor Gordon Brown took the city and Westminster by surprise this morning with his decision to radically alter the role of the bank of England the decision to make the bank ofEngland independent in 1997 was indeed arguably the most important decision that the new labor government made in its 13 years in power this was a watershed M the argument is in the long term mortgages should be cheaper and
over a period of years make the cost of borrowing lower for everyone following the um decision to make the bank of England Independence and we saw a big fall in real interest rates then a lot more people couldsuddenly afford to buy when you have low interest rates borrowing is really cheap and if borrowing is really cheap then the biggest form of debt that most people have which is their mortgage is really cheap so people areable to buy houses the problem of course though is if everybody has a mortgage and that everyone is buying a house well then you're going to have to pay more and more and more to get the houses there'sa bewildering array of loans about with lenders cutting each other's throats to win business offering ever lower rates on ever bigger sums you have this explosion in mortgage credit and this is a lot to do with the deregulation
that we saw in the 1990s and in the 1980s but it's also to do with low interest rates because interest rates fell which meant that cost of mortgages reduced house prices were able to grow faster than wages grewthere's been another big rise in property prices the boom has rippled out from London they're on the up and up house prices are soaring at their fastest rates since the boom of the
80s
what dollar is that 14645 10
million and so there was certainly a significant Improvement in the confidence of the rest of the world in how the UK was being run that led more people to want to buy Assets in the United Kingdom and meantthat assets of all kinds in the United Kingdom became more expensive there was a lot of money available looking for places to invest now when you've got lots of money available to lend and when you've got uh asupply of housing that is not as high as it should be that's a lethal
The transcript turns to the rise of buy-to-let investing and the culture of property speculation. First-time buyers and campaigners describe how investors crowded out ordinary people trying to get on the ladder.
combination I had a look at a flat and it was quite small you know modest kind of as you'd expect for a for a first time place um it had sort of a you know one bedroom um butas I was leaving the estate agent kind of let slip he said oh well there's actually an investor who's put in an offer on the whole house the traditional idea that most families could reasonably expect to own theirown home that actually was being overtaken uh by a different kind of motivation that um investing in property was better than investing in stocks and shares um in wealth
creation there was money coming in and therefore you needed to create ways for that money to flow out and clearly a substantial part of that was the buy toet Market it's quite simple you buy a house you letit out to tenants they pay your rent and this covers the mortgage Tina buys houses like in Melda Marcos bought shoes she currently owns not one not two not three but 18 properties and there's still no stopping herand people were doing this buying one buying two buying four it was an arithmetic game the TV programs at the time really poured fuel on the fire and talked Non-Stop about the fact that you could be clever youcould buy buy property do it up sell it for a lot more I call them property porn because ultimately they were just everyone was watching with these lustful eyes about what they could get and what they should do
cheffy has made some money in the property boom she's just sold her flat in this Tower block and invested the money in this £400,000 house in henden Chef is planning to put as many bedrooms as possible in thisproperty so she can rent it out room by room for £32,000 a month that's twice as much as she currently has as a
nurse the process of rising prices created a surge of activity that reinforced the growth of uh house prices and created this this spiral this this period of exuberance but while everyone knew that it couldn't last forever no onewas C clear how and when it was going to
stop the number of people with mortgages fell while the amount of those mortgages doubled in value credit was not going into creating more homeowners it was just going into making homeowners need to borrow more money to purchase ahouse than they would have done previously property prices were Rising all of the time and that was always reported as a good news story and that was really frustrating for someone who wanted to buy their first home youwould hear a lot about property investors you'd hear a lot about B toet you'd hear a lot about people investing and you know people saying oh that's just my pension and there seems to be the sense that peoplecould just keep using property as an asset as an investment without there being a KnockOn effect for people and there 100% is a KnockOn effect especially when demand you know was outstripping Supply that kind of felt like a
real kick in the teeth for someone who was trying to get on the property ladder it made me quite angry that's how I first got involved with price out in London I caught up with there some young peopledemonstrating outside a property investment show it's really widening the gap between rich and poor people with property are the ones who are able to get more and that's what inequality is and people who don't have anything are youknow completely disenfranchised you know I can't afford to get an ex-council flat in most places so price out was formed in the early 2000s to kind of Be The Voice um of the the firsttime buyer who is strugglingto get onto the property Market you know we obviously felt strongly about um the situation that we were
Kate Barker's review is introduced as a forensic diagnosis of the housing shortage and its wider economic effects. It argues that Britain needed far more homes and that the market was distorting investment away from productive activity.
facing central government had a role to really sit up and see the crisis that was unfailing before them and 100% that was the opposite of what we what we
experienced I think it's fair to say that back in 2003 housing was just beginning to rise up the political agenda and everyone was obsessed with this question of why house prices seem to be exploding um but Supply wasn'tresponding to keep up and so you had this kind of Powder Keg that was really pushing prices up quite quickly prices were Rising really quickly but the supply of new housing wasn't and you hadn't got enough housing sowhat was exercising the treasury if you like was this problem so the treasury rang me up and said would I like to lead a review on housing Kate Barker is a top Economist asked by the treasury to lookat what's needed to take the heat out of the housing market the treasury asked me to they asked us to estimate how many homes we had to be building to reduce that long-term Trend in house prices rising relative
to incomes so we had a pretty heroic go at it the report by Miss Kate Barker today concludes that the supply of new homes consistently lags behind demand and that the number of houses built in Britain which arecurrently 175,000 a year must rise substantially if we are to reduce house price inflation the ballpark range of new private housing that we were talking about was probably around the 240 to 250,000
range the bar review completely defined the way that we all thought about housing I think why it was so ground breaking was it was the most forensic diagnosis of the problem it escalated it uh to the point thatwe started to understand that there was a genuine crisis and it talked about the need to build more homes and that in the end there was this massive mismatch between the demand for housing and the supply of homesand until you tackled that you wouldn't be able to break out of the housing crisis and I think that completely changed the game she also talked rightly about it was well-being if you like the social impact of therebeing adequate housing the way in which the housing stock was allocated just wasn't fair so we had this shortage of social housing at the at the bottom so that only very poor people were being housed the people in
the level just above that sort of struggling to get into good private rent and then very difficult for people to move into owner occupation she also pointed out the the intimate link between the availability of Housing and theperformance of the economy more and more money is tied up in mortgages to buy houses as the prices escalate the mortgages go up so they've got less money to spend or to save uh and that is you knowa serious problem for The Wider economy the whole bias of the lending system shifted against creative productive activity and in favor of property it sucks too much investment into housing as opposed to into small firms and Industry inother
The government raises housing targets, but the financial crisis soon exposes how fragile the boom was. The chapter covers reckless mortgage lending, mounting debt, and warnings that the housing market had become a bubble.
ways for England we will raise the annual house building Target for 2016 from 200,000 houses a year to 240,000 new homes a year the housing stock did increase in 2007 we built more houses than any time since theheight of the Thatcher era but it was quite clear to all of us uh that if we were going to start to deal with the uh problems being caused by the lack of housing we needed to build muchmuch more I often look back at this with a bit of a shudder they really geared up to deliver more houses if you look back at 2007 to8 real evidence of Greater delivery and then of course the financialcrisis
came it's official property prices are rising fast there's more evidence today that house prices are continuing to rise rapidly the economy seemed to be booming a lot of people thought that we were in you know Wonderful period ofeverlasting expansion but a lot of it hinged on the Boom in the housing market it was a time when if a bank glanced at you out of the corner of their eye before you knew it they would havegiven you a mortgage for £200,000 I mean they were just spitting them out there with ease often 100% mortgages 125% mortgages and it was all based on this idea that you couldn't lose with property house prices are continuingto rise strongly not only have house prices gone up again but it's the biggest monthly rise for almost two years they were being pushed up further by credit being pumped into the market by the Banks and the building
societies they appeared to be no limit on what they were willing to put into the market for me me the total ambition is to make buying houses as easy as buying a carton of milk out of Tesa it'sabout 15 times my anual income I believe and that just makes it completely unaffordable for me to be able to live in and around where I work I distinctly remember one conversation with a chief executive of a buildingSociety who appeared fixated over success being the ability to lend more the regulations were not tight at the time they were simply chocking out mortgages to anybody and everybody because it was making them money to do so withoutany real strong tangible form of responsibility people began to create a myth within themselves that this process was undeniably good that everyone was gaining from it and if we were creating it well why not have a share of
people would be taken out all expenses paid golfing trips restaurants where people would literally order the largest lobster that they could see here at the building Society they can't lend money fast enough the explosion of activity all thebad things that happened in the ughs even now I burn with anger at the greed the self selfishness the short termism it was only a matter of time before something stopped the party I and I think some otherswere warning that that we had something like a bubble in the housing market which is a dangerous State of
Affairs when I revert back to 2006 2007 to the idea you got to buy a home push your finances to the extreme to buy a home renting is a dirty word I do look back with real anger fearsare growing that many people could be taking on too much debt appetite for borrowing is stronger than ever the bank of England said mortgage lending Rose by a record 8 billion last
month the bank of England I think needs to accept some responsibility they knew what was happening they were tracking flows of credit into the housing market they publish statistics on this every month so yes uh they were uhto some extent I think asleep at the
wheel there are signs of trouble in the broader mortgage Market foreclosures hit a record last quarter there were a lot of mortgages that were lent out to people they may not have had jobs they may have had anyform of incomes whatsoever nevertheless lenders said well interest rates are low we can still make money off these people so the house isn't a financial product but the mortgage that you've taken out to buy it did become afinancial product which was bought and sold you would become a bit of a play thing in financial markets right through the first half of 2007 those of us in the Bank of England were worried about the signs thatwe were seeing about excessive
Northern Rock, the wider financial panic, and emergency policy responses show how the crash hit housing and banking. Quantitative easing and falling prices are discussed, but the underlying shortage of homes remains unresolved.
borrowing good evening thousands of customers have been queuing up outside branches of the troubled mortgage lender Northern Rock to withdraw their money there were lines in Nottingham H and London nobody's given an absolute guarantee that the money issafe in this bank I don't think we could have anticipated precisely the timing and the nature of the events that would have prevented it from occurring but warnings we certainly wanted to give and we did shares have plummetedaround the world billions wiped off their value central banks among them the bank of England are pouring funds into financial markets mortgages are in short supply and more and more people are falling behind with their payments added towhich every single day seems to bring a new piece of bad news from
America we wanted to put in place a number of measures to make sure the economy did not stall or Worse go into depression but also uh we wanted to make sure that people weren't fearful of losing their ownhomes or facing unemployment which is why we put in place a number of measures including measures to support the housing market governments gain popularity by pushing home ownership and see it and have them for a long time asthe Holy Grail now the problem with that is when home ownership slows it's because the markets are slowing there was an absolute fear of house prices falling and the loss the flow through of the impact that has onour banking sector given the size of Mortgage Debt of the impact that has on economic activity I'm off to Sussex to meet a couple who can't afford their new mortgage and selling would mean losing money because of the
collapse in house prices they're desperate I feel bit my fingers have been burnt for something I haven't done you know I've just been happily paying my mortgage and all of a sudden we're in this situation and it's quiteharsh to
take what we had in 2009 was a very unusual situation the amount of money was going down and we didn't want that to continue because that might have led to a repetition of the Great Depression in the 1930sso we printed using quantitative easing more money in order to ensure that the amount of money in the economy in total was great it was initially an experiment um I think people didn't fully understand what it was goingto achieve I think we many of us agreed it was necessary to try it it's a very simple idea which is quantitative easing increases the amount of money in the economy and that will increase asset prices and inturn will ultimately lead to more spending if it runs on the risk is you start inflating asset prices Heistprices and that's something that's not good for the economy as a whole and you know I think at that time we thought well this will all get wounded up
£300,000 could buy you a flat or a house at a push but not in Bel gravier £300,000 is how much the average property in the area went up by last
year the size of new mortgages could be limited to just three times your salary and borrowers could be told they need bigger savings to get a home loan it's going to take us forever to be able to geta house and the only other option would be to rent I moved to London from leads in 2010 and I was really shocked by how high rents were there was this sort of idea after the the financial crashthat housing was more affordable but that never found its way uh to private renters never it never found its way to people on Lower or middle incomes I think the people that you know really benefited were people whohad had the money to come in and like buy up the now cheaper houses which ordinary folks couldn't afford still the average firsttime buyer will have to wait until they're in their 50s before they can even afford a
deposit one there on the right what about young professionals who can't access social housing we can't rent cuz the rents are too high and we can't get on the property ladder social housing was being squeezed home ownership wasbeing squeezed and and more and more people were being housed in the private rented sector
the group that didn't benefit which normally would have done would have been those that are waiting to buy the cycle of house prices falling so people selling homes so homes go on the market so there's an excess supplyof homes so house prices fall Etc that process did not happen the crash did bring a slow decrease in prices but that still wasn't enough and that's because the underlying issues didn't change the makeup of the housing marketif you like stayed the same there still wasn't enough Supply there still wasn't a Level Playing
The coalition government argues that planning reform is needed to unlock more building, but the proposals trigger fierce backlash. Local opposition, green belt politics, and the difficulty of changing the system are central here.
Field I am married my husband is an accountant and we have two children we work really hard and between us have a good joint wage yet still we cannot afford our own family home well Anor this is whyof the things that I along with immigration actually that I probably hear about more than anything else as I travel around the country the house building industry has really not served us well in this country we've also gotto build more houses I think there's no doubt in my mind that we got to change the planning system right now 11 hours 40 minutes after the polling station's closed it is a hung Parliament mathematically no party cannow get an overall majority and so there will have to be negotiations over what happens now about who becomes our next prime minister earlier today standing by the front door of number 10 Prime Minister David Cameron and his
Deputy Nick CLE shook hands Mr Cameron said they were ushering in a new era in which the national interest came before Party
politics it's not just about the e it's also about um people's hopes and dreams we will provide hundreds of thousands of new homes for families to live in and that's what today is all about David believed that extendinghome ownership the idea of a property owning democracy the idea of spreading inip more widely was good for society
overall I was uh heading up the city's policy unit if you think about the work that had been put in from the Barker review which had very much taken us to housing Supply and the coalition government came inand said we've got to get the market working better the answer to that is planning so a huge set of planning reforms in order to essentially give developers maximum ability and right to build and build atscale
I was given a task to produce a national planning policy framework for the first time I wonder what the best way to approach that uh was Miata Fula was the the brilliant uh official uh who was uh inthe cabinet office we were trying to essentially completely revise the national planning policy framework now this was a framework that run into the thousands of pages um that the government was trying to do a massive overhaul of tomake it simpler uh to make it more digestible but also to make it work in the interest of those that build the key provision was that there was what we called a presumption in favor of sustainable development theresponse I I think did take us all by surprise this country is crawling with hysterical nihilistic people according to the coalition government they include the members of The National Trust Friends of the Earth the royal Society for the
protection of birds and the bat conservation trust these deranged organizations that seems to be the Judgment of ministers are furious at Plans by the government to allow concrete to be laid in the countryside it's the most biased documentI've ever seen it's not a planning document it's a lobbying document this is simply not true if you read the document in detail you will see that the protection we enjoyed I invite your your viewers I'm not I'mnot a nistic left Winger I remember the response vividly uh because I think when the National Trust mobilizes um it sends Terror through whiteall and it certainly sends Terror through uh conservative MPS I think we underestimated the extentto which the the radicalism of the the document would spook people yeah hello hi can I just say hello I'm sry jar hi hello hello what's your policy on housing yeah what in general conservative policy on housing as
a constituency MP housing was was really a big issue I would receive in my mail bag in my surgeries was um being contacted by people uh that were almost always against new housing the central problem is we havetoo many people that don't want new housing in their backyard in their neighborhood because uh they they feel it will affect their house price or the you know it's going to spoil their View and that is what motivatesthem more than thinking about the Next Generation the only way you make a real difference to the housing stock is by building on Green Belt land the answer from the neighbors is not on my doorstep would you liketo see green belt land built on uh not on my
The speaker describes becoming planning minister and trying to push through more housing despite hostility. The focus is on the political difficulty of building on land and the belief that the Conservative Party would not fully solve the crisis.
doorstep I was giving a speech and I was sort of summoned out for a call with the Prime Minister he wanted to appoint me planning Minister and I turned up at the department uh Eric pickles who didn't knowme particularly well uh and I think probably didn't have a huge amount of uh sympathy for me uh viewed me with intense suspicion as some knock who' been sent in by the chancellor to mark his homework delighted thankyou thank you I love Nick very much but I didn't ask for him um um and um I think he found it very difficult idealism came up against the Sher practicalities of um of of the nature of politicsI took the view that I didn't have very long to get stuff done we had two points we were trying to get across the first point was not very much of England is built on even though it doesn't
always feel like that when you're driving down Suburban roads uh and then the second point we were trying to get across was that new housing developments can be great my husband and I work as carers in the communityand we still can't reach you know like getting a deposit together for the mortgage paying the monthly rent with four children your situation is is absolutely typical I'm afraid and it's I mean it's a huge National crisis Ithink for my money I think it's the biggest social justice crisis we have building on a few meadows outside harow is not going to cure the housing crisis um there are plenty of empty buildings there's plenty of siteswith planning permission existing which hasn't been used yet you know home ownership sank by five percentage points in the last decade in England problem of housing this country how many H can I this is paying for your houses
bloody hell now fortunately I had decided quite early on that the only way this was going to work was if I was willing to take an unlimited amount of heat I remember the headline of the the front pagesplash of the Daily Telegraph ministers war on the countryside it was exhausting I mean it was really really exhausting um but hey you know I was I was young and and ambitious well it's a great thinker is neckbut he decided to announce um a massive house building program the weekend of the conservative councilor um annual conference so I spent quite a bit of my morning on the Saturday talking to him um uh on the telephoneto see exactly what he was doing I think that the difficulty that the conservative party has is that it weighs up against each other on the one hand the people that they know vote for them who live in
agreeable houses with views of green fields and who might be members of the local conservative Association and then a theoretical group of people who are in their 20s and 30s they have no idea how they vote they rathersuspect that they probably don't vote conservative I have reached a conclusion which is that the conservative party is never going to do what is necessary to meet the housing needs of the British people and it will never putsufficient weight on the the interest of those who currently do not have a place to
live you have the conversation with developers and that what they will tell you is why would we build why would we flood the market with housing it doesn't work for our business model CU in the end that modelrelies on the fact that demand outstrip Supply and therefore prices are always increasing and you can generate a
return the business model of the house building sector has always been to drip feed new Supply you don't want to move into increasing uh Supply uh and flooding the market we noticed in Taylor Wimpy's 2011 report a linethat would easily be skimmed over but is really significant um um and that is that their strategy was to prioritize margin over volume and what that essentially means is that you grow the the the sale price you growthe margin of profit on each home rather than commensurately building more housing you're making your money through price increases rather than increased output and that's really significant that really uh really revealed the the strategy so what that equatesto is that you can increase profitability by increasing the amount that you charge and the profit you can make on each home rather than simply increasing profit by building a lot
The government introduces Help to Buy to revive housebuilding and support buyers after the crash. The speaker argues that the scheme also inflated prices and benefited existing homeowners and developers more than new buyers.
more developers absolutely reduce the number of homes that they build out in order to keep prices and profits at a level that they believe is necessary in order to ensure that they get get an appropriate return on investmentcoming out of the financial crisis we were pretty Keen to match our volume with the common o of market demand and land availability and planning availability you the key thing for making a difference to the housing crisis isabout number of houses built but it's number of houses built over 10 years over 20 years over 30 years not the number of houses built before the next general election hello good evening flat stagnant and sluggish and that'sjust what the optimists are saying the rests are warning the economy faces a triple dip recession the first the country has seen in modern times the latest figur show the country's economy shrank by 3% numbers that will increase
the pressure on George Osborne to come up with a plan B and bluntly to make it grow
again we were in a situation then where firstand Bars were effectively being shut out because they didn't have the 20% deposit uh that would be needed to be able to get a mortgage to buy a property I hadmany conversations with people in the industry as well as with other politicians and certainly the the big housing developers always made the case that we would get more houses built if the housing market was booming um and ifdemand was strong and that's why they favored what effectively sub mortgage subsidies to keep up
demand in March 2013 the day before the budget I got a call from our trade body to say uh Andrew you know just to be aware what you're going to see tomorrow is a new scheme on steroids todayI can announce help to buy it's a great deal for home buyers it's a great support to home builders a deposit of just 5% is needed for a new build of up to £600,000 the government lends the purchasera 20% equity loan meaning they just need to secure a 75% mortgage and from January help to buy will be offering a mortgage guarantee scheme it's this part of the scheme which will provide £130 billion worth of
mortgages we just really wanted to go get out get our own place um own our own property um so we've been saving and if obviously we'd had to save up for the 10% it would have took us longerwe didn't want to have to spend every less Penny we earned on an house what we couldn't really afford to pay 10% on that scheme which I used myself encouraged people not only to take on mortgages but helpto buy loans from the government which when you start repaying them as I just have are not cheap to repay and the interest rates are inflation linked I've since actually interviewed one of George Osborne's advisor ERS who workedon the help to BU scheme I told him that I used it I was like oh but Sur you've paid off your loan I was like no if I had 200,000 in the bank do you think I would
have taken a government loan it's a huge amount of money it's more money than most people will ever see in one go in their entire
lives
I think it's pretty clear that if you simply try to give people money to buy houses then what you do is push up the prices I made that clear both privately and publicly and if the idea was todo do something to deal with a very short run problem but it's only a short-run scheme well okay but it cannot be seen as part of a long run policy there was an argument going on with government Isort of had a public argument with the treasury about this about using techniques like help to buy aggravating the problem not solving it some of it is often cannibalizing it's self-defeating often increasing the price of properties by morethan the amount you help people get on the housing ladder in the first place they've been helped to buy a house that's more expensive than it would have been had they not had the inflationary effects it's really helped
the people already own their homes because they've had a little boost to their to their Capital value of their home
This chapter examines how Help to Buy boosted housebuilder profits and shareholder payouts. The speaker argues that the policy encouraged a model focused on price growth and dividends rather than building more homes.
you know George Osborne was always motivated by the Politics as well as uh the fundamental issue so yes he saw that a a little housing boom uh would be good for the economy it would be good for people'ssense of well-being and it would be good for the chances of the conservative party at the next election I've have no doubt that um the help to BU scheme did have some incidental benefits I'm I'm sure a fewmore houses were built and a few more people did get on the housing ladder but it's main impact was in pushing up the price of housing kicking away the ladder that middle income families were climbing to get intothe housing market and enriching directors and Executives of of the big property developers bis has reported a steep rise in pre-tax profit another upbeat set of figures from from the Housing Industry the UK's main house builders saw big
profits this week big rises in profits at all the big Builders some say it could be down to the government's help to buy scheme you might remember that allows profit is kind of bursting into kind of new territoryif you like to historically unprecedented levels so prior to the the the financial crisis house builders were generating around2 billion pounds of profit for tax a year what we saw was by 2015 profit for tax for the bighouse builders was around 3 and A2
billion I think the problem with help to BU is that it was continued for too long it was the right intervention to make to Kickstart a recovery in house building coming out of the deep financial crash and thena pretty deep recession but what happened and that's why people called it cocaine for house builders is that the house builders became hooked on
it they are large asset managers Pension funds from other countries and interestingly they have shareholdings in multiple house building firms some of them in almost all when we started to look at dividend piecing together the bits of informationfor each house Builder the scale of increase in dividends over this time is so extraordinary we've maybe got this wrong and so we went back just to just as a check that we we were correct which wewere before the financial crisis what we saw was dividend payments collectively among the big house builders was in the 3 to 400 million range so by 2015 it was a billion pounds by 2017 it was 1.8 billion poundsand by 2019 our estimates said that it was around £2.5 billion now to put that into context that equates to the sum that was being spent around that time by our major government affordable house building program equated to
just the dividends that those eight companies could could pay out
The impact of rising prices spreads beyond London, making home ownership harder across the country. The IMF warns that ever-rising house prices could threaten financial stability and squeeze incomes.
if your aim is to maximize shareholder value then you look for the prime sites and and you look for the houses which are going to recruit the better returns which might be the more expensive end of the spectrumthe impact of this on new home buyers is buyers are going to have to buy for over and above what they would have done pre pre-
crash Rachel in Manchester has been saving for 10 years but says prices are racing away from her prop prices are really inflated compared to what you actually earn on a normal salary I'm not sure how I'm expected tobe able to get a mortgage the property boom is now Rippling far beyond London it's just impossible to be honest to be able to get on house and lad of the most unaffordable places to live in the UKaround half are in the countryside we would have about people from the Midlands from the West country from from Scotland from all over really we would hear about people who were really struggling you know couldn't afford their ownhome and and felt powerless and and felt really cross about the state of
things the international monetary fund has warned that ever increasing house prices could threaten the recovery every year the IMF doctor to the world economy Pops in for a home visit to check all's well this year there were warningsthat the housing market presented a Potential Threat keeping interest rates low could further fuel house prices and increase risks to financial
stability everybody has got used to super low interest rates house prices are so many times more than people's earnings what we've through is a complete unprecedented anomaly 300E historic lows I think we were lulled into a completely falsesense of security by thinking that interest rates could always stay low I think that's a mistake let me spell it out does the housing market pose an immediate threat to financial stability today no it doesn't could it inthe future yes it could this low interest rate regime is inflating house prices and rather than pushing back on this cycle governments have done the opposite they've said oh there's a problem with the market not enough people cancan get on the housing ladder the growing demand for housing has to be met by growing Supply the alternative as in any Market is that prices will rise so that homes become unaffordable to many of our citizens and
take up ever more of their
The focus shifts to London regeneration projects and the tension between private development and affordable housing. Large schemes like Battersea Power Station are presented as examples of how costs and profit pressures limit social benefit.
incomes local authorities in England can compel developers to build some affordable housing now affordable means that they're within the reach of local people on average
salaries you'll continue to see the development of great housing for people in their City ready in hereby preparing this wonderful new Fantastic addition to London's growing quotient of affordable housing open there you I was approached by Boris Johnsonto become his chief of staff and also to take responsibility for the planning department and so it was it was one of those jobs when you're off it You' take about 30 seconds to consider the pros and consand say yes his big concern was numbers how do you get more housing it wasn't just about affordable housing GSA housing um or anything else it was all stock we had a number of key regeneration areas um placeslike B C9Elms it was the 9 alms and baty Power Station development was the most physical example of like the massive changes that were taking place in the city and you've got the state and the government both at local and
National levels and at City Hall saying what we're going to do is this is going to be private Le largely because councils were under this incredible Financial pressure because of austerity so we had to find new developers newsources of money so that was all about going out to all the different markets and saying London is open for business
it's a place designed to attract the global Community the question though is whether this type of urban regeneration benefits ordinary londoners a private developer business model is to try and maximize their profit when you ask them to deliveraffordable housing alongside on the site they get planning permission on a certain amount of affordable homes but then they can turn around and say oh I don't think I'm going to make profit anymore so can I cut backon the affordable homes or can I get rid of them all together uh let's talk about 9M for a second uh because I think it's a good example of the challenges that we were facing you couldn't get thereI remember the early discussions we talked to network rail we started to think about extending the northern line now the thing is that was about a billion pounds to do that and then we needed about a billion for
the rest of the infrastructure that was needed now when you've done that kind of sum you haven't got a lot left for affordable housing they're spending more than a billion pounds on restoring the power station itself from Shanghaito Singapore baty's just gone on sale around the world a Global Marketing push launched by its Malaysian owners last month I mean people complain about the price of some of those properties but I'm afraid if you're not goingto sell a penthouse appartment for a few billion a few million sorry you're not going to um be able to afford to build some of the other affordable
housing
The speaker reflects on whether major developments delivered enough affordable housing and admits some mistakes. A wider European perspective shows that gentrification, eviction, and displacement are not unique to Britain.
can you imagine what 9 MMS could have been that land if we had just even just got the basics think of all the good that could have happened the heart's gone out of B you now very expensive theproperty around there people feeling squeezed out and they are feeling squeezed out out of their homes out of their areas and they don't see longterm future for their children growing up did you ever think you could have gotsome more affordable housing out of them why didn't we do that well you always ask those kind of questions did did did did go hard enough um that was always a judgment call I'm sure we've got some ofthose a little bit wrong I don't think overall we got it badly wrong I think we got pretty much everything we wanted the developers they end up with all the power it's weighted towards them and it's weighted towards
their B line um and that's what we saw historically we saw time and time again during this period affordable housing numbers
reduced future Generations in England face Rising private rents and increased poverty unless more affordable housing is built that's the warning by the charity and in 2013 2014 Oxford didn't build a single affordable dwelling where are the affordable housesyou're talking about cuz they're definitely not in Brighton they're probably not in the Southeast I'm going to be in rended accommodation for the rest of my life because I'll never be able to afford a
house
business model of private sector developers is simply not set up to build lots of affordable homes but both the conservative party and the labor government under Tony Blair and Gordon Brown just didn't believe that the public sector couldor should uh be be given sufficient funds to go on a major house building
program it's not okay to displace people to come in here in the name of progress and we need to stop the in
jce I went to this event with people who were like organizing on housing Estates right across Europe and I was so shocked to hear them talk about you know rampant gentrification eviction High rents displacement of of working-class communitiesit was a real eye opener for me to understand that this wasn't just about a conservative government who were kind of pursuing these policies it was much bigger than
Public anger over rents, displacement, and housing shortages grows into protest and political pressure. The transcript ends with the 2015 election context, a new generation of renters, and the claim that the housing crisis can no longer be ignored.
this who's home home marching through streets that many can't afford to live on they called for more affordable and counil properties social housing is a right the government knows it faces trench warfare over housing somebody said to mecenturies ago there were bread riots when are there going to be housing riots it's time that you put a cap on private rent in you don't allow foreign investors to come in and buy up all the properties asthe chief steward I was under pressure there was anger on the marra Hunts and that was good and that was
powerful the level of public support for what we were doing was just huge because people were living it and if they weren't living it then their kids were living it or the grandkids were living it this private landlordsare ripping us off something they to be done about it is social cleansing at its very worst we aren't just passive here we're going to fight back people suffer in silence around housing but the March H has broughtpeople
together I've just had an audience with her majesty the queen following the dissolution of Parliament the general election will be held on May the 7th what struck me going into the 2015 election as a person that was uhleading our work on housing policy was we had a new generation of young renters uh who weren't going to play by the old rules of the game there was a big shift in the debate I made the caseoften that the conservative party is ultimately doomed if Young people can't get a place to live and develop a life like their parents did when there's an election politicians always like to talk about housing and promise that they'regoing to Magic up homes for people but I think something else was going on the housing crisis at that point was starting to get so bad that it could no longer be ignored how about of Britain where a
young couple don't have to dream of owning their own home but can actually afford to do it for so many people the dream of home ownership is just disappearing into the distance that's why we've got a better planthe dream of a property owning democracy is alive and we will help you fulfill it one of the most fiercely contested elections of recent times has ended with the conservatives on course to win a
majority he's moving back in David Cameron and his wife Samantha have arrived back in Downing Street knowing he has a second term as prime
minister supply of social housing is shrinking house prices are going up rents are going up building more homes is critical conditions were absolutely slum likee is the only way I can describe it tonight a number of Banks andlenders have stopped offering new mortgages and suddenly we were now at that ticking time bomb explosion period what's different about the UK housing market that impacts where we build and how we rent our homes to watch exclusive insightsfrom government and housing market experts go to bbc.co.uk Britain's housing crisis and follow the links to the open
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