Affordable Rent and Housing

SUMMARY of our HOUSING POLICIES

We advocate:

1- We must Build More Social Housing and the only way to do that is to subsidise it via the UK Government.

2- When elected, we shall examine the role of the commercial banks in inflating the national money supply and creating house price inflation. Independent Green Voice will make this an issue at Holyrood.

HOW TO LOWER RENTS, and HOUSE PRICES

House rents and house prices are too high. This is a result of three things:

1. There is a lack of subsidised Social Housing ("Social housing" is the general name for both council houses, and also housing association properties.)

As a consequence, the private housing market has taken over the job of housing the majority of the population.

This is a problem for 5 reasons.

Firstly, providing all the nation's homes isn't the proper role of the private housing market. The private housing market is there to service those who have saved additional funds and who choose to rent or purchase privately.

Another reason why it is not appropriate for the private housing market to try to house the population is because – in the private market – there is a natural economic tendency to keep the supply of houses less than the actual demand, in order to maximise the prices. Thus a tendency towards shortage is going to be built into the business model of the private market.

Thirdly, over-reliance on the private market for homes also means that once houses pass a certain price then fewer people can afford to rent or buy them. This means that even fewer houses will get built because the building companies won't construct them if they can't sell them!

Fourthly, it is no good asking the private Building Companies to build enough "affordable houses" because it is difficult for them to make such developments pay. Obviously, it is going to be difficult for those Companies to turn a profit if they are required to sell a certain number at a reduced price.

Fifthly, "Anti-Landlordism" can exacerbate shortage. Anti-Landlordism is an inevitable consequence of relying upon the private sector to supply the nation's housing needs, and this can make matters even worse.

For example, if the private sector is the only sector housing the people then, obviously, people will begin to focus their anger about the high cost of rents on private landlords, even though that, as above, is far from the whole story.

When private landlords put up the rent then people turn against the private landlords and blame them for the high cost of housing. At this point, they will start doing things like calling for the "abolition of landlords" (Green Party policy in England and Wales).

If the government then tries to intervene in the private market by, say, fixing rents or putting up the costs of them doing business in the private market, then some landlords are likely to simply sell up their properties and get out of the whole business of renting because it is "too much hassle".

This will mean that they sell into the private market, but many people who are looking for a home (or who have been put out of such private rental flats) will simply not be able to afford to put down the deposit for such a flat or house.

After all, many of us are just living week to week – some of us can barely afford to rent at all. We certainly cannot buy.

This decrease in private flats merely ensures that more people struggle to find and pay for accommodation.

Therefore, anti-Landlordism is not the answer, although it is an inevitable consequence of a housing market which relies upon the private sector to supply the nation's housing needs!

SO WHAT's THE ANSWER?

The answer is more affordable rent in the non-private sector which means more social housing – which means more housing directly subsidised by the taxpayers (whether we like it or not)!

When "the market" cannot provide the necessary "affordable homes", then the only way to build a sufficient number is for them to be heavily subsidised by the government. That's just a fact.

A benefit of this policy is that more social housing will put downward pressure on the cost of rents and houses in the private market.

Therefore, it is necessary to encourage more social housing to be built because otherwise the burden falls on the private sector – a burden which it is not equipped, and is not meant, to service.

Lack of Social Housing is one reason for high prices, and it should be corrected. However, another reason is:

2. The Inflation of the Money Supply by the Commercial Banks

Prior to the 1980s, mortgages were only available via Building Societies. These "mutual" societies could only lend the money which they had deposited with them. Thus, house price rises were limited by the amount of savings held by the nation as a whole.

Commercial banks were not in the mortgage market. After the Building Societies Act 1986, banks started lending money for mortgages. They were able to take advantage of their unique ability to lend money which they do not actually possess (known as "fractional reserve banking") – taking the risk that the lender would be able to pay it back, often over decades.

This ability of banks to lend money which they do not have has been a huge driver in the inflation of the housing market ever since.

Even though the 2007-8 bank crash showed the danger of this business model, the banking system suffered no real consequences.

There was no reckoning. Instead, the banks were bailed out by the UK government (us, taxpayers) because such "privately-created commercial bank money" represents the actual national money supply these days. In the absence of a publicly-created national money supply, bank lending is the overwhelming way in which new "money" enters society – literally created out of nothing for private profit!

Removing the power of banks to create money would mean their loans were restricted to the amount of savings that they held. This would limit the amount of money sloshing around in the housing market and would work to end house price inflation.

(Even restricting mortgages back to 2.5 times annual salary – instead of around 4.5 times today – would help to prevent house price inflation.)

A side effect of that policy, initially, could be a serious shortage of money in the economy because no new money would be entering (since this privately-created bank-created money is the main way in which new money comes into the economy).

That's why such a policy would need to be done at the same time as we instituted a regular source of publicly-created money, created by a State authority, which would be spent "debt-free" (not lent, as a debt) into society by the national government.

This policy was developed and explained in the excellent 2012 book "Modernising Money: How our Monetary System is Broken and How it can be Fixed" by Andrew Jackson and Ben Dyson which is available in paperback on Amazon here and available for free download at modernisingmoneydotorg

It has also been converted into a draft Act of Parliament (2011), which is "good to go" and available here.

And the following is also a reason for the housing crisis, even though some people don't want to hear it spelled out so succinctly:

3. A Population which is increasing at an Unnatural and Unsustainable Level due to the Importation of thousands of "Ready-Made Adults" into the Country every Year.

What do we mean by "ready-made adults"?

For example, in the past, prior to mass immigration into the UK, and when fertility levels were higher, a man and a woman might have 2, or 3, or more children. This was an "organic" increase in the population, which would lead to an organic increase in the supply and demand of accommodation; in the sense that babies were born, and then they would take 18 years, to reach maturity, and while they were growing up they would live with their parents before they left the home.

During this period, there was time for houses to be built for them – whether council or otherwise. Meanwhile, at the opposite end of the age range, the older people were naturally passing. The population, and its housing needs, were kept in a manageable balance.

Now, instead of our economy slowly adapting to a slight increase in the population, with a slight increase in the housing stock, the population is exploding with "ready-made adults" 18 years and older, from abroad, all of whom need to be housed right now, not in 18 years' time!

To put this in perspective:

In 2023-24, the last year for which we have figures, a number of long-term immigrants equivalent to the size of East Kilbride came into Scotland. That is, 76,100 – see inter-active graph at Figure 3, National Records of Scotland, report dated 14-8-25.

In the year 2022-23, a massive 90,700 long-term immigrants came in. This is bigger than the population of Paisley, Scotland's fifth most populous town (after Glasgow, Edinburgh, Aberdeen and Dundee).

It should go without saying that it is obviously not possible to build council houses, or private housing, at the rate at which people are entering and staying in Scotland! Nor have we ever been close to doing so.

How many Affordable Homes have been Built in the last 19 Years?

For example, John Swinney is quoted as saying (in the last 19 years): "Since 2007, the Scottish Government has supported the delivery of 141,000 affordable homes in Scotland, including 101,000 for social rent". [Quoted in Jane Mcleod, "Plans announced for agency to boost new homes supply", The National, 23-1-26, p2.]

Over the course of these 19 years in power, that's 7,421 houses per year, of which only 5,316 are for social rent.

That's 5,316 social houses per year! We had 76,100 long-term immigrants into Scotland in 23-24, and 90,700 the year before that!

For those who point out that the "net" figures are slightly lower than the gross figures quoted above – we respond by pointing out that even the net figure for 2024 is 77,500 – the size of Paisley; and for 2023 is 56,400 – the size of Livingston (Figure 2, ibid). Furthermore, the new immigrants who entered are not moving neatly into the exact areas and houses and jobs and schools and waiting lists of those who left.

When elected to the Scottish Parliament, our MSPs will highlight all the above matters.

Sources

nrscotland.gov.uk/publications/mid-2024-population-estimates

en.wikipedia.org/wiki/List_of_towns_and_cities_in_Scotland_by_population