Week 14 2013

Tendring Topics……on line

A Second ‘Mrs Thatcher’?

The ‘Right to Buy’   

According to some sections of the press the promise in the Chancellor’s Budget  that the government will step in to guarantee a large proportion of the deposit currently required by Banks and Building Societies before they will grant a mortgage for house purpose, will help thousands to realize their home ownership dreams.   In furthering the cause of home ownership for all it is, so they say, comparable with Mrs Thatcher’s bold move in offering the right to buy their homes (at bargain basement prices) to all Council House tenants.

            I certainly hope not. Right to buy was surely a flagrant (and sadly probably very effective) example of buying votes with other people’s money.  It was made worse by the fact that the ‘other people’ whose money bought those votes were far-sighted Borough or District Councils that had invested in Council dwellings to ensure (or so they thought!) that there would never be homelessness or overcrowding in their areas, and that local young people who weren’t sufficiently well off to buy their homes would be able to move into a rented houses in the vicinity of friends and family.   It was significant that there was never any suggestion that the right to buy should be extended to include tenants of privately owned properties. The owners of those properties were likely to be supporters of Mrs Thatcher’s Party!

The Consequences of ‘Right to Buy’

           

As for the effects of right to buy; well, it certainly improved the fortunes of quite a few middle-aged people who seized the opportunity of, ‘helping poor old dad (or mum) buy his own home’, at a ridiculously low price. ‘At eighty-five he’d have never managed it on his own’,   Of course, they made sure that poor old dad left them the house when he departed.  They then sold it at its proper price immediately they were able to do so, making a very comfortable profit.

            Many urban council housing estates started degenerating into slums as the ‘best tenants’ bought ‘the best houses’, selling them at a profit when they could and moving on. Many other council tenants bought their homes and found that, even though the purchase price had been low, they were having difficulty keeping up the mortgage repayments, plus having to pay Rates (now Council Tax) and Water Rate and carry out regular painting and maintenance.

            It was though in rural village communities that the right to buy had its most malign effects. Council houses and bungalows in such areas tend to be built in small groups, infilling available space, and merging into the village scene.  These were quickly bought up by astute tenants, eventually either selling them or passing them on to their sons or daughters who had no trouble at all selling them on at inflated prices – in some cases as rural ‘second homes’.   Thus, councils were building no more houses to let and no longer had ‘casual vacancies’ as tenants died or moved away.   Young couples whose families had lived in village communities for generations, perhaps centuries, found themselves unable to make their homes there.  Meanwhile, house price inflation soared as ‘townees’, seeking second homes or rural homes from which to commute to the city, snapped up any rural property becoming vacant.  Village communities died and degenerated into dormitories for city workers as village shops, pubs and churches closed.

39 Byng Crescent, Thorpe-le-Soken. A rural council house where Heather and I were happy to live temporarily in 1955, and where our second son was born.                  

One of the more idiotic statements made by Ed Miliband as leader of the Labour Party was his apology for the Party’s opposition to right to buy, way back in the 1980s.  He should, on the contrary, have been apologising for the Party’s failure to repeal the legislation when, during the following decade, it had the opportunity to do so.

          Will George Osborne’s proposal to lend would-be house buyers a large proportion of their deposit, have the same disastrous results as Mrs Thatcher’s right to buy.  I hardly think so but, inspired by the same mirage of home ownership for all that blinded the Conservative government of the 1980s, it is likely to create disasters of its own.

House Purchase – then and now

           

Heather and I with our two young sons outside our bungalow in November 1957.  We had been home-buyers for just a year.    

Is this, for instance, a sensible time for anyone to be taking on a long-term loan for house purchase?   When, in 1956, my wife Heather and I began the purchase of the bungalow in which I am typing these words, I was thirty-five years old and a qualified Public Health Inspector with ten years experience.  I had just been appointed as a PHI by the then Clacton Urban District Council.  The mortgage loan was repayable over twenty-five years (in fact my spare-time freelance writing enabled us to pay it back in fifteen!) and I had every reason to believe that, unless I did something criminal or utterly stupid, I would stay in the same or similar employment for the whole of that time.

           

How many junior public officials nowadays can be confident of retaining their employment and being able to repay a similar loan over twenty-five years?  No job is really secure.  There’s no longer such a thing as a job for life.  During those pay-back years we would have described ourselves as home-owners. We weren’t really though.  Until we made that final payment and the Building Society returned to us the deeds of our bungalow, they were the true owners and we were only the home-buyers.  David Cameron has waxed lyrical about the pride and joy of receiving the house key and moving into your own home.  He’s right, of course. But he should also have given some thought to the shame, dismay and despair of being evicted from what you had thought was your own home, because – through no fault of your own – you could no longer keep up the mortgage payments.

            Then again, do you remember what triggered the current economic depression?   There was a housing boom.  House prices went up and up, way above the rate of general inflation.  Building Societies were eager to lend.  They no longer bothered about the credit-worthiness of applicants for a mortgage.  The steadily increasing price of houses made them believe that they were betting on a good thing even if the purchaser defaulted on his payments.  They were offering loans of 95 percent or 100 percent of the purchase price, sometimes throwing in an extra few hundred for moving-in expenses.   And then…….the bubble burst.  House prices dropped, Britain went into recession, and those loans were anything but secure.

‘What goes around comes around!’

            Banks and Building Societies had learned their lesson.  They weren’t going to be caught out like that again.   There were to be no more 95 and 100 percent mortgages. Deposits of 20 percent and more of the value of the house were demanded.  There was, and is, a housing shortage.  Unable to find the deposit, home-seekers looked to the rental market.  Social housing had become only for the virtually destitute. Private house owners put up their rents.  Not a penny of that Housing Benefit with which the government parts so reluctantly, stays with the actual recipients.  It goes straight into the pockets of rapacious landlords taking advantage of uncontrolled market forces.

            Now, thanks to this bright idea of clever Mr Osborne, the government is going to rush in where banks and building societies have learnt to tread with extreme care.  They are going to help by guaranteeing a large proportion of those high deposits.  Can they really not see that they are manoeuvring themselves into the same position that existed before the housing bubble burst?  The only difference is that it is the government’s money (our money!) that is being put at risk this time.

            The government’s offer will increase the number of potential home buyers –but there will, at least for some considerable time, be no corresponding increase in the number of new homes on the market.  Those all-powerful market forces will force up house prices again – and again – until once more the bubble bursts!  As Stan Laurel (or was it Oliver Hardy?) used to say ‘Now look what a muddle your right to buy and home ownership for all have got us into!’

The Teaching of History

            No regular reader of this blog is likely to accuse me of being an uncritical admirer of our present government and its members.  Yet I have to confess to having some sympathy for Mr Michael Gove, Education Minister.  He is painfully aware of the fact that there’s something wrong with Britain’s Education System (if you doubt this, watch any popular quiz show on tv and note the encyclopaedic knowledge of sport and pop music and the abysmal ignorance of virtually everything else) but his every attempt to do something about it provokes anger and derision from the teaching profession.   His ideas on the teaching of history go back, so they say, to the 1920s and 1930s.  His critics are quite convinced that in those unenlightened days, History Lessons consisted of learning, by rote, dates of kings and queens and the battles in which they were involved.

             Well, I was at school from the late ‘20s to the late ‘30s and my History Lessons weren’t a bit like that. They were exciting.   From our very first years at school, we learned something about Egyptian and Greek civilisation at a time when Western Europe was sunk in barbarism, about the Roman Empire, the Roman invasion and occupation of Britain and that empire’s eventual collapse.  As we progressed we moved on to learning about the Anglo-Saxon invasion and settlement of Britain, followed by the Vikings and eventually the Normans.  As we grew older we learned rather more about all these events and how they happened.  The Dark Ages were followed by the Middle Ages, the Renaissance and the Industrial Revolution.  We learned about the great Empires that succeeded the Romans – the Ottoman Empire, the ‘Holy Roman Empire’, and those of Spain, Portugal, France and ourselves.  In the 1930s the British Empire was, of course, still intact.   

            This narrative, that made sure we all realized how and in what order each event led to its successor, was lightened by colourful, sometimes legendary, stories about events of the past;  King Alfred burning the cakes,  the Burghers of Calais, Henry VIII’s six wives, the martyrdom of Cranmer, Latimer and Ridley,  Raleigh spreading his cloak over a puddle so that Queen Elizabeth could walk on dry-shod, Drake finishing his game of bowls before sailing out to meet the Spanish Armada, the Speaker of the House of Commons defying King Charles I and so on.  They all helped to make us feel that history was about real people like ourselves.  In those days ‘school history’ ended with the Causes of the Great War (we didn’t, of course, call it World War I because we didn’t know there was going to be a World War II!)  Those like myself, who were studying history for the General Schools Examination (the Matric) spent two years studying one particular period of history in greater detail.   My class studied British, European and World History from 1815, the end of the Napoleonic Wars, to 1914 – the beginning of the Great War.

            It was an action-packed century.  There were wars, in many of which we were involved, among them Crimea, two Boer Wars, Sudan, the Indian Mutiny, and two failed attempts to control Afghanistan (pity our present politicians hadn’t studied those more closely!)  There were others in which Britain was not involved; American Civil War,  Austro-Prussian War, Franco-Prussian War, and wars of liberation in Latin America.  It was a century of nationalism with the unification of both Germany and Italy. It was a century of social unrest – the birth of the Trade Union movement the Labour Party and of the Christian Social Movement.  It was the century of the Chartists and of Karl Marx; when even Benjamin Disraeli, founder of the Conservative Party was briefly a ‘Radical’!  It was a century of ‘dark, satanic mills’, slums, and cholera epidemics, but it was also a century of Parliamentary Reform, of Education, Factories and Public Health Acts.  A great many good, and evil, aspects of life in the third millennium saw their beginnings during the 19th Century.

            I reckon that we could do a lot worse than return to the History teaching of the 1920s and 1930s.  The fact that, after well over seventy years, I remember so much of it surely suggests that they must have got something right in those days!