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London’s Housing Concerns

May 24, 2004

London?s Housing Concerns

Residents of Bayswater recognise that they are a stone’s throw from some areas of low cost public housing. It is true for all of us in central London but with the continued growth in house costs across London there is much debate about how “key workers” can be retained locally in the capital.
Disa…

London?s Housing Concerns

Residents of Bayswater recognise that they are a stone’s throw from some areas of low cost public housing. It is true for all of us in central London but with the continued growth in house costs across London there is much debate about how “key workers” can be retained locally in the capital.

Disappointingly, the government has made it clear that its recent key worker initiative will only apply to those working in the public sector. In the course of my correspondence with the Minister for Housing, he ruled out ? at this stage at least ? extending the key worker definition to private sector employees.

My fear is that caretakers, shopkeepers and many of our small service businesses such as restaurants and newsagents, who are the social glue of local communities such as in Bayswater, will lose out. By convention these types of job are not especially well paid. In my view far more discretion needs to be given to the local council to take account of specific community factors.

It is undoubtedly the case that in central London we have an increasingly polarised community between those people able to buy property, who generally have to be either wealthy or in highly paid jobs, and those who qualify for council or housing association properties. Whilst there clearly needs to be a simplification of the planning process and an eye towards the infrastructure needs to support any growth in population whether here in Bayswater or in Greater London as a whole, I also fully support discretion for scarce local housing to be focused on local workers and families who have a longstanding connection with the area.

However, there is one frequent assertion in the housing debate with which I disagree ? it is often said that “public sector workers are being priced out of London”. This is purely a factor of national wage bargaining which not only provides a raw deal both to public sector workers in London, but also to residents here whose public services are often of a lower standard than elsewhere owing to understaffing pressure.

My view is that we need to pay public sector workers the market rate here in London. Private house prices in Bayswater and other parts of central London are in fact far higher than they need to be partly as a result of the amount of subsidised public sector housing. An inventive deregulation of public housing alongside shared ownership schemes would help enable the housing gap to reduce between London and the rest of the UK.

One potential way forward is that in addition to a right to buy, we should also invoke a right to invest, which would enable housing association and council tenants, over a period of time, to buy a share in the property in which they live. Not only will this give them a stake in the flats or houses in which they live but also ? very importantly ? it will become a lifeblood for business creation.

One of the main reasons for continued relative poverty in parts of London is that many people without formal qualifications who might like to set up small businesses of their own lack any liquid capital or collateral with which they can obtain a bank loan. Imaginative joint or shared property ownership schemes would certainly be a step in the right direction in rectifying this.