The obscene sums of money being lavished on football teams and players by Arabs and Russians have upset much of the press, and make this small-town club supporter despair. But maybe we should be looking at this as ‘The Great Football Swindle’, whereby millions are being brought into the game that would otherwise be thrown at yachts the size of small islands and on building unsustainable ski slopes in the desert.
When it comes to housing, though, the credit crunch seems to worry everyone – yet it shouldn’t. Perhaps.
I was booked to give a presentation at a business conference recently and arrived a bit early. The place was full of young, mainly male business middle management. A dozen or so of them saw me sat in Reception, catching up on emails, and came up to me. Most of them, knowing of my involvement in the housing industry, wanted to probe me for my thoughts on the housing value falls. They all had ‘invested’ in multiple buy-to-let properties in new-build apartment blocks. You know, those cramped shoeboxes that developers have been throwing up, and overstretched, underskilled planning authorities have been allowing, to sate the demand of a greedy investment market. There was visible horror on their faces when I said that I expected their ‘investments’ to devalue further, with no sign of any recovery back to previous levels for many a year. With much relish I advised them to prepare to live in negative equity. If you’re going to gamble then be prepared to lose, and gambling on new-build flats doesn’t just hurt the investor, it has seriously affected Britain’s housing stock. I also have no sympathy for the large housebuilders who have been happily throwing up characterless, cramped apartment blocks in the knowledge that 50% of mortgages were being taken out by ‘buy to let’ or, worse still, ‘buy to leave empty’ investors. It has become a numbers game, a licence to print money for housebuilders, who have been able to brush the concepts of ‘home’, ‘liveability’ and ‘placemaking’ aside because most people were not making homes, or living in the places they were buying. As the investor market has dried up – and surely with so many investors in negative equity, it won’t come back any time soon – the housebuilders’ fortunes have gone into freefall, and some big names will go to the wall.
In an effort to shore up the market, the Government are making noises that RSLs (registered social landlords) could possibly, with government money, buy up all those units that the housebuilders can’t sell. The result being help for the housebuilding industry’s crippling cash-flow problems, and making the units available to the needy in the rental market or the emerging shared-equity market. It’s a very sensible and laudable idea, and one that could start to help with the redistribution of property wealth. This would be all well and good if the flats available to buy from the housebuilders were fit for living in. But most are not: they are cramped, lacking in public space and suitable only for dormitory accommodation, not community- or family-oriented at all. The more enlightened RSLs are thus turning the Government’s offer down.
Over the past few years, I have been describing these ‘buy to let’ apartment blocks as ‘slums of the future’. But they are about to become the ‘slums of today’. There may be a silver lining, though. The big housebuilders who have contributed to this mess are in such a pickle themselves that when the finance industry sorts itself out and mortgages become more readily available, they will almost certainly not be in a position to respond. We must hope and fight for communities being delivered by communities. Great new places like Vauban, in Freiburg, Germany have been delivered by a combination of community-build and small developers rooted in their communities. This system results in more care being taken. I was born and bred in Lancashire, and a saying that sums this up is ‘you don’t shit on your own doorstep’.
Maybe, just maybe we are about to see the future of our communities, our places, our homes finding its way into our own hands. Maybe the seismic shock that is going through the housebuilding industry will result, initially at least, in a redistribution of responsibility, a rethinking of what constitutes good placemaking. Ultimately a redistribution of wellbeing and wealth will be the outcome.
