'Housing market' is a lie - there is no market, only a corporate monopoly, fueling a crisis, that needs desperately to be broken

Government right-to-buy policy is plugging holes in the greedy housing sector, but is unsustainably syphoning homes form social housing to do so.

Britain's housing crisis rumbles on. When Theresa May returns to the role of Prime Minister in earnest, to face whoever will be (at least nominal) leader of the opposition, getting to grips with housing has to be at the top of the list.

An uncomfortable fact for the Conservative leader is that the money made by private landlords from housing benefit - received as a welfare benefit by households in order to pay their rent - has doubled over the last decade (Gayle, 2016).

That fact goes side by side with the continued rise in rents and prices, escalating beyond reality for the overwhelming majority of people (Chakrabortty, 2016), and the failure of successive governments to build sufficient housing. And then there is the siphoning off of homes from social housing stock (Williams, 2016).

To plug shortfalls in properties available for purchase by those with the means, former Chancellor George Osborne raided social housing and housing associations. Rent-to-buy took affordable housing for the least well off, to feed a greedy and bloated system in danger of collapse.

All of these facts point to a very particular problem. The housing system is very much tailored to the interests of a small group of people. Those who own property and those who have capital to spend, playing in a housing market that is exclusively for them.

Conservative policy has failed the worst off and served only an upper middle class of wealthy property owners and those fortunate enough to already have some 'equity' in the system. Everyone else, the poor and the young, is automatically frozen out.

For some this is a double blow. While private landlords reap astounding profits from housing benefits - since the government effectively subsidises this rentier practise, so literally encourages this state of affairs - it is the taxpayer that is funding this policy.

What is more astounding is that investing public funds instead in a big increase in homes in the social housing sector would actually reduce this private landlord subsidy by billions (Gayle, 2016), saving taxpayers huge sums at a time when spending on essential services is stretched thin.

Amongst the first tasks has to be to get to grips with the rental sector. New York housing chief Alicia Glen has argued that Britain's problem is the expensive and inefficient private landlording system (Murray, 2016), which flies in the face of the lower costs, and so cheaper rents, of operating at scale - although that implies that the purpose is efficient service not self-enrichment of rentiers.

But larger organisations, operating at scale shouldn't be the end of the story. There is room and need for mutuals and cooperative principles - for rental housing that can operate at scale and which honours the stake held by those investing time and money in living in those properties.

However, this is nothing less than a complicated situation. Not all private landlords bad or greedy. For some it is an essential source of income in hard times - look at the difficult situation facing tourist trammelled Barcelona, where efforts to stop illegal renting to tourists runs up against the needs of people with otherwise limited sources of income.

A small clan of property owners are being enriched by rising property prices as most people are simply cut off from access. Some exploit that position further as rentiers, raking in cash from private renters and from public subsidy. It is clear that a new approach is needed.

Part one of any response has to be public investment: build more housing and make most of it affordable, truly affordable, social housing. So many ills could be fixed through this one act of government spending, one that would pay itself back many times over.

But part two is more difficult. The entire housing sector needs to be urgently rethought, because it is not fit for use. Housing, a human essential, a necessity like fresh water, is being held ransom by those few holding it as property - stifling supply and bloating prices in bubbles that have disastrous rippling results.

Not least, steps should be taken to discourage unproductive property accumulation - like land banking or small rental property portfolios that gouge prices - and policies such as land value taxes should be taken into serious consideration, because the phrase 'housing market' is a lie. There is no market, only a corporate monopoly that needs desperately to be broken.

References

Damien Gayle's 'Private landlords get £9.3bn in housing benefit from taxpayer, says report: Amount is nearly double what was paid 10 years ago according to National Housing Federation study'; in The Guardian; 20 August 2016.

Aditya Chakrabortty's 'Rob the poor and give to the rich – housing policy for 2016: The bill before parliament is ideology at its purest: a full-throttle attack on social tenants everywhere'; in The Guardian; 5 January 2016.

Anne Williams' 'The Housing and Planning Bill is a disaster: The Housing and Planning Bill being debated at Westminster will only make Britain's housing crisis worse'; on Open Democracy; 5 January 2016.

Kate Murray's 'New York housing supremo: "The strength of a city is in its diversity"'; in The Guardian; 11 November 2014.