The History of the UK's Housing Crisis

The UK is in the midst of a housing emergency. Homes across the country have become unaffordable to buy and rent. Many are unfit for people to live in safely. They are unstable, and the provision of them is discriminatory.

Only 6,500 social homes were built in England last year, despite the fact there are 1.1 million people waiting for social housing. According to Shelter, one in three adults in Britain is affected by the housing emergency. That’s 17.5 million without a safe, secure and stable home – in the fifth wealthiest country in the world. How did we get to this point?

Videos by VICE

“Industrialisation happened rapidly in Britain in the 1800s,” says Tarun Bhakta, policy officer at Shelter. “From about 1850 to the 1890s, Britain’s population almost doubled, and a lot of that was concentrated in cities. Workers didn’t have the power to challenge poor conditions, and overcrowding was a breeding ground for diseases like cholera and typhoid.”

Then came the First World War. War-time prime minister David Lloyd George promised “homes fit for heroes”, and in 1919 his parliament passed a landmark piece of housing legislation, the Addison Act, promising government funding to build 500,000 low-rent homes. However, the Second World War stopped house building, and hundreds of thousands of homes were lost to heavy bombing.

John Boughton, a social historian, explains how things improved, albeit temporarily, in the years following the conflict. “The post-war Labour government, from 1945 to 1951, built 805,000 new homes in an era of unprecedented economic constraint and difficulty,” he says. “Then the Conservative government in 1953 built 220,000 council homes, the highest number in any single year. There was a basic assumption that improved housing would improve health, which of course it does – people lived longer, and fewer babies died.”

Kate Macintosh, the now-retired architect who designed the Dawson’s Heights social housing estate in Dulwich, south-east London, says there was “a terrific mood of optimism” in the mid-1960s. “We really did think we were moving towards a classless society,” explains the social housing retention campaigner. “We were building for everybody.”

But in 1979, Margaret Thatcher was elected. Her government deregulated the private rented sector, taking away renters’ rights and bolstering those of landlords. Right to buy was her government’s flagship policy – and while a scheme that allows social tenants to buy their council home at a discounted price might not sound like the worst idea, it didn’t work out in practice. Private landlords now own four in ten right-to-buy homes.

Cecil Sagoe, a former policy officer at Shelter, says, “Since it’s been established in England, we’ve seen nearly 2 million social homes sold under the right to buy. It’s a policy that has facilitated the growth of the private rented sector and the transfer of social housing into the hands of private landlords. This leaves renters plagued with affordability issues, pushing them towards homelessness.”

Today, 50 percent of what was public land in 1979 has been privatised. Macintosh says the idea that commercial house builders are ever going to provide social housing for rent is “ludicrous”, adding, “Their central objective has to be to maximise returns for their shareholders.”

A Home Builders Federation spokesperson responded: “Private developers provide tens of thousands of affordable homes each year, including 60 percent of all the social rented homes built last year. Like any private company in any sector, home builders seek a return on investment, which, in turn, allows for more investment in the skills and land necessary to build more homes. This is how builders have rapidly increased housing supply to a quarter of a million homes per year as we look to address the huge housing crisis with which we are faced.”

Cllr David Renard, a Local Government Association housing spokesperson, says: “We want to work with government on a cross-departmental long-term homelessness prevention strategy, and tackle our housing shortage as we recover from the pandemic. Giving councils the powers and resources to build 100,000 social homes for rent each year, including further reform to right to buy, would not only help to reduce homelessness, but deliver a third of the government’s housing target.”

The situation was set to worsen beyond the Thatcher era. In the 1990s, mortgages – including those for landlords – were made more widely available, fuelling rising house prices. If the cost of a supermarket shop had gone up at the same rate, a kilo of chicken would now cost £19.68.

Josh Ryan-Collins, an economist and the author of Where Does Money Come From?, says the excessive demand for housing as a financial asset, rather than as a place to live, has been the main challenge facing the UK housing market since the 1990s.

“This has been driven by the liberalisation of the financial sector, by very low interest rates, which have made real estate and property a much more attractive global asset for investors,” he explains. “The banking system itself has become dependent on increasing house prices, because housing is the main asset on its balance sheet and the main form of collateral it owns.”

Then, in 1996, the UK government introduced the buy to let mortgage scheme, enabling people who already owned homes to buy second homes to let out as a rental investment. “We’ve had this shift from affordable, decent quality social housing into pure investment properties, creating a return for the wealthiest people in the population,” says Ryan-Collins.

In the 2010s, there was a change in government strategy to focus on building more so-called “affordable homes” – however, prices were still out of reach for most, and homelessness has doubled over the last decade.

Poppy Noor was a teenager when she became homeless. “People from all walks of life are in temporary accommodation,” she says. “As somebody who has lived in homeless hostels as a teenager, I can say I didn’t have mental health problems at that age. But you put somebody young and vulnerable [in a homeless hostel], and you move them around every month, they don’t feel safe.

“People are in these units with no windows, where they don’t get to install a phone line or an internet connection for two years. Those things are what can really push somebody beyond the brink of despair. The idea that there isn’t enough is a lie. There’s more than enough, but we’ve made a calculation about who gets it and whether or not they’re allowed to have this very most basic of things that they deserve.”

A Department for Levelling Up, Housing and Communities spokesperson said: “Building more affordable homes is an absolute priority for this government, which is why we are investing over £12 billion in affordable housing, including half for social rent. This will unlock a further £38 billion in public and private investment to further boost the number of homes available.”

The housing emergency is about who we are, about what sort of country we want Britain to be. The state pays private landlords billions in housing benefit every year, because we don’t have enough social housing. It’s nonsensical. We urgently need to build more. We need policy changes that establish a model of prevention, not a short-term cure. Houses must become homes again – for people, not for profit.