According to Maslow's hierarchy
of human needs, under the second level of "safety", there is said to
be the security of body, employment, resources, morality, family, health and
property, which in themselves incorporate the basic requirements of every
sentient human being on the planet, regardless of whether they're black, white,
brown or red, whether they're rich or they're poor, male or female, educated or
uneducated, Muslim or Christian, believer or non-believer.
Of course, in today's
increasingly globalised world we routinely accept as a basic human right an
individual's access to adequate healthcare, employment, resources, a family
life and property rights, within the limits of a free and equitable society,
but without specifically setting universally accepted standards for all of
these basic human rights. As a result we might have one individual living in a
palatial mansion, while another lives in a hovel, one man and his family might
eat grasses to sustain themselves, while another feasts on the best cuisine
that money can buy. One man might be denied employment through the colour of
his skin, or the manner of his birth, whereas another man is guaranteed
employment regardless of his caste, his colour, or indeed his ability, or his
apparent lack of education. One might be condemned to die at a comparatively
early age through an easily preventable illness or disease, while another is
spared death through spectacular advances made in modern medicines, or through
the provision of a readily available medical remedy. In other words, despite
sharing the same basic primal needs as one another, as members of a shared
human race, in reality a person's access to and availability of these necessary
basic needs is often influenced by any number of different factors, including
climate, culture, geography, politics, religion, economics, trade innate
inequalities and of course money, or more importantly perhaps, personal wealth.
In Britain today, we often pride
ourselves on our modern westernised society with its ready access to many of
these same basic needs, a good diet, a good job, sufficient resources, our
family around us, a fairly effective healthcare system and the right to buy and
own property, as we are able. We all know the expression "An Englishman's
home is his castle", which is palpable nonsense of course, simply because
if it's not owned by a mortgage company (the bank or the building society),
then increasingly it's more likely to be owned by a private or public landlord,
so in fact, it's their castle, as opposed to yours. However, that major point
aside, for most tenants and occupiers, the fact that their home is actually
owned by someone else, who then chooses to rent out their property to someone
else at a fixed monthly cost is largely immaterial, as being a tenant is much
more preferential than having to live on the streets, in a bed and breakfast
hotel, or even in a homeless shelter, none of which can provide the level of
security that comes with having you own front door to shelter behind.
It would be wrong to imagine that
large scale public or social housing is peculiar to Britain, as most developed
and developing countries have also
recognised the need for that basic requirement for shelter amongst their own
indigenous populations, although it's probably fair to say that the UK was a
global pioneer in the provision of such housing, not initially at a government
level, but at a purely private philanthropic one. It was during the 19th
century that any number of individual philanthropists, industrial employers and
social reformers took it upon themselves to establish worker's tenements,
villages and communities for those less fortunate than themselves; and it was
only in later decades that central government took on responsibility for
communal housing, largely as a result of the public disease and pestilence that
was ravaging many of the poorly built slums and dwellings that had previously
been thrown up by unscrupulous landowners, employers and builders.
Today, most modern nations make
significant provisions for housing their citizens, often at huge financial
costs to the individual country's national exchequers. In 2009, the Brazilian
government set out proposals to build around one million new homes, having set
aside an estimated $18 billion to build them; and at the same time setting a
long term goal of building around 3 million new homes in total. In China, where
the provision of public housing falls under the direct remit of the central
government, the construction of an estimated 36 million new homes is reported
to be an core strategy of the communist government's latest 5 year economic
plan for the country. In Singapore, public housing provision is the
responsibility of local housing boards, who offer affordable housing to tenants
on 99 year leases, ensuring that the occupants have some degree of connection
with a family home, but also making sure that at some point in time that the
property can and will come back into public use.
In North America, Canada is
increasingly adopting a public housing strategy that is based on a fusion of
both public and private investment, in what are mixed housing estates, with low
cost housing included as a central part of any new proposed private
developments. The city authorities in Toronto are also said to have made use of
what they refer to as "stop gap" housing measures by utilising or
building semi-permanent, or wholly temporary housing units, which it is hoped
will bridge the period between planning proposals being made and the finished
properties being ready for their new owners and tenants to move into.
In France and following the
destruction caused during the Second World War, as in Britain, the post war
government made a priority of constructing brand new social housing, to help
replace the often privately owned properties that had been destroyed during the
conflict. In order to prevent private landlords exploiting the shortage of
properties immediately after the war, the French authorities were reported to
have imposed rent controls in order to ensure its ongoing affordability. Once
again, in common with the UK the authorities in France also set about building
a series of post-war "New Towns" to house those displaced from the
cities and as a means of providing affordable public housing to the masses.
Unfortunately, as in Britain, in some cases these new housing estates
eventually became home to less desirable elements, with the result that they
were quickly abandoned by the more law-abiding citizens, who were then in turn
replaced with even more undesirables. In more recent times, the French
authorities have begun to repeat the practices from elsewhere in the world, of
insisting that 20% of any new proposed housing development must be specifically
set aside for affordable public housing, although even now approximately 50% of
the total property rental market in France is still privately controlled,
another negative feature of the sector that it shares with the UK.
Perhaps surprisingly, one of the
best country's for the provision and development of public housing was pre-war
Germany, where low rise apartment type accommodations was said to have become
to most common form of social housing, something that was only brought to an
end following the rise of the Nazi Party during the early 1930's. However,
following the war itself, the defeat of Nazism and the separation of Germany
into East and West, the East German authorities were keen to develop ways of
quickly and cheaply housing their citizens, in light of the utter destruction
that had been wrought on the city by the Allied Forces. Within a relatively
short time East German designers and architects had managed to produce a
prefabricated modular construction design that allowed new low rise housing
estates, of up to five floors in height, to begin springing up all over the
country; and helping to alleviate much of the housing shortage that had
previously blighted the communist state. In fact, the basic model was said to
have been so successful that several improved varieties of the same simple
design was said to have been employed in East Germany over the course of the
next 30 years or so.
Britain today is reported to need
one million new homes just to stand still in terms of housing, the same number
that Labour's Ed Miliband has promised to build if he and his party are
re-elected to national office in 2015; and exactly the same number of homes
that Clement Atlee's post-war Labour government built between 1945 and 1951, a
Golden Age of British housing construction, even though the country was
essentially bankrupt. It is worth noting that around the same time that
supposedly bankrupt Britain was building these million new homes, the
unemployment rate was thought to have been hovering around 1-2%, as close to
full employment as we're ever likely to get in this country again.
According to one of the directors
of a national housing campaign group, successive British governments, from
Margaret Thatcher onwards, have spent the past few decades deliberately
creating a form of private investment that builds very few new homes, rinses
the taxman by allowing overly beneficial tax breaks, artificially raises the
costs of new houses generally and prices first-time buyers out of the housing
marketplace. According to a recent report issued by the same campaign group,
this has helped to create a situation where the older and wealthier property
investors gain the greatest financial benefits from the current housing market,
even though they have already gained huge personal financial benefits from
earlier price increases. In other words, the rich simply get richer, because
the system has been deliberately engineered in their favour.
As things stand for most Buy To
Let Landlords, they are currently allowed to offset 10% of their rental income
through "wear and tear" deductions, whilst additional allowances are
also made for items such as letting fees, ground rent, insurance, accountants
fees, utility bills and council tax. in the tax year 2010-2011, it has been
estimated that around £13 billion was deducted by private landlords for such
expenses, which was thought to be the equivalent of around £5.2 billion lost in
potential tax revenues, all of which was legally claimed. At the same time it
has been suggested that many private landlords are deliberately exploiting the
loopholes in the tax system to avoid having to pay Capital Gains Tax on
properties that they would normally have to pay the CGT levy on. Unrecorded
lettings, those that are "off the books" are also an area of concern
for those who take an interest in the industry, as these unregistered and
unregulated transactions ensure that the National Exchequer and therefore the
taxpayer loses out on any tax revenues due to the. It has also been reported
that there are approximately 500,000 private landlords registered with the HMRC
for tax purposes, yet most calculations tend to suggest that there are in fact
up to 1.5 million landlords letting properties at any one time, meaning that
about one million property owners have not registered themselves with the tax
authorities. Some commentators have questioned the reluctance of government to
close down such obvious loopholes, by placing a duty on both estate agents and
mortgage lenders to report on their clients, to ensure that HMRC would have an
almost complete record of all private landlords, who could then be monitored
more effectively.
At least one source has suggested
that the private rental market in the UK derives around £35 billion from public
funds each and every year, although most other sources place the amount at
around £25 billion. Regardless of the exact figure, when one considers that
Brazil plans to build one million new homes for around £10 billion, that Legal
and General Insurance have proposed building several "New Towns" for
£5 billion, that the Labour Party plans to invest £10 billion to help build one
million new homes over five years, it clearly puts the £25 billion spent on
private sector rents into some sort of perspective. In theory, with that same
amount of taxpayers money, the UK government could probably build around 1.5-2
million new homes over a five-year period and bring an end to the national
housing shortage within a few short years.
But, rather than trying to bring
an end to this exploitation of the public purse; and in the process help reduce
the nation's almost endless public deficit, it seems that central government
are indifferent to the problem. According to one source, in the quarter, April
to June 2013 mortgage lenders approved an estimated 40,000 new Buy To Let
mortgages, worth around £5.1 billion, a clear indication that the private
sector rental market is still very much regarded as an easily available
"cash cow" by some property investors. The recent changes to pension
savings announced by the Conservative Chancellor George Osborne may in itself
result in even more demands being made on the public purse, especially if a
significant number of pensioner investors choose to put all or part of their
savings into the private property rental markets through schemes like the Buy
To Let, or similar. If that were to happen then rental costs will undoubtedly
rise, costs to the public purse will escalate, property prices will increase
and any hopes that the government has of ever reducing overall public debt will
prove to be as elusive as ever.
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