London is broken

Today, Britain goes to the polls to elect its local councillors. In one sense, this is the least consequential decision of all time. Beyond collecting bins, hosting diversity workshops and (whoops) shouldering the entire burden of social care and going bust, what do they even do? In another sense, it’s the highest of high stakes events, as the fate of the government, the traditional political parties and the future of things like the union between England, Scotland and Wales are being decided. Not least of the necks on the chopping block is the stiff trunk of Keir Starmer, a political cancer patient getting his latest scan, finding out how long he has to live.

Out on the ground, as Londoners furtively scurry into their polling places, I’m struck by existential questions. If it’s unclear what local councils are for, it’s also increasingly unclear who they are for. My local borough, Lambeth, is an improbable wobbly crescent, encompassing the ravey riverside delights of South Bank and Waterloo, the genteel parks of Kennington, before exploding out southwards into the dodgy expanses of Brixton, Clapham and Streatham, a crazypaved maze of gentrification and social decay. I’m very attached to nearby friends, the slumbering, rolling lightness of life in South London, silly arthouse cinema at the BFI, the warmth and joy of my local parish church.

Yet what on earth, and really what on earth, has local politics got to do with anything I love, identify with, or hope for in my locality? The council, described memorably by one opposition candidate as a castle that does things from on high, is arguably London’s most useless. Council salaries, and council tax go up and up, even as much of the Borough (typically of London) is dirty, strewn with rubbish and run down. The only likely alternative is a Green party which saw two Lambeth candidates arrested for posting anti-semitic content online, but this hasn’t apparently stopped them getting back on the campaign trail.

Social housing in London is a double horror

But on gazing into the abyss that is London politics, one monster in particular glares back. Lambeth, like many central London boroughs, is stuffed to bursting with social housing. Intellectually of course, I know there has to be a lot — there are council estates all around me. But the figures still managed to shock me: one in three households in Lambeth are renting from the council. If you’re trying to rent or buy in the area, a third of properties are permanently unavailable. And don’t bother trying to get into a council house yourself — there is a waiting list tens of thousands of families long, with people waiting decades waiting to get one. A large part of the stock is used as “temporary accommodation”, with over 4,000 households shuffling around decaying council flats. And that’s not an idle stereotype, sadly — Lambeth also has some of the worst maintained stock in London, with the council ranked 349th out of 353 social housing providers nationally. A miserly trickle of new stock has been built at great expense, even as much of the existing stock is in desperate need of renewal, maintenance or replacement.

Social housing in London is a double horror. It is often degrading and frustrating for those who depend on it, but is equally experienced as desperately unfair by those trying to work and rent in London. Nearly half of socially renting households are economically inactive, and about 4 in 5 receive housing benefits. Council houses are disproportionately concentrated in central London, with flats and houses ideally placed for workers let out for a fraction of their market value to a population the majority of whom are not in work and in receipt of taxpayer funded benefits.

More than merely being unfair, the long term impact of the British social housing system is economically and socially regressive. Property that would be renovated or redeveloped if made available to the private sector is locked up as a burden on local councils instead. Because of the vast waiting lists and endemic socio-economic problems of many residents, poorer workers are less likely to access social housing than those out of work entirely, as priority is given to those at risk of homelessness and destitution. The system, as John Wills noted last week, is uniquely poor at investing in and maintaining high quality property, and acts as a brake on social mobility. In London the situation is uniquely acute because of the yawning gulf between social and market rents.

London feels in this instance like a three-tier society. On the one hand there are those who bought property in the capital decades ago. Protected from economic reality by triple-locked pensions and booming property equity, this group has little reason to disrupt the broken housing market and every reason to want it to stay the same. On the other extreme, there is an entire population that is born, lives and dies nestled in the arms of the welfare system. Stories of individuals and families waiting over ten years for council flats reflect stories of desperation, but also of unquestioning intergenerational dependence. There is an entire demographic that lives in the belly of the state, for whom it is the government’s job, not the individuals, to provide and maintain housing. Caught somewhere in the middle, stand the Nicks, the Millies and the Henrys — the young people packing into London for work, stuck paying sky high rents, even as people down the street in the same kind of properties, by a trick of history or the welfare system, pay little to nothing in housing costs.

The system of social rent might be defended as allowing settled working class communities to continue in the city they have built and sustained. But quite apart from the fact that so few social tenants are in work, very many of them are not originally from Britain, let alone London. About half of socially renting households were led by someone born overseas. Whilst many are now British nationals, this raises the most serious of questions about the economic impact of migration, and makes nonsense of the idea that council housing in central London is maintaining the traditional character of working class neighborhoods.

Nor is it clear that any of this is to the long term benefit of those caught in the system. Social tenants in boroughs like mine suffer from low quality, heavily rationed properties. The benefits of being in London — access to the best employment opportunities in the country — are not realised by communities stuck on low pay or outside of employment altogether. Leaving social housing is profoundly disincentivised. The cost of housing in London, worsened by the unavailability of so much prime land, makes switching to private accommodation unaffordable for social tenants. Moving away from the capital is the obvious answer, but this means losing access to council housing, as the English regions have the same issues with long waiting lists and give priority to residents. Compounding the problem, many ethnic minority communities lack the social capital or family connections that might ease a move to a lower cost area.

Most importantly, no serious measures to change or disrupt the system, whether by carrot or stick, are going to come out of London itself. The “three tier” system of owners, rents and social tenants creates an inbuilt majority for keeping things the same, with private renters in any case less likely to vote as a youthful, transient population. With councils having narrow duties and few powers, they are low stakes environments with little motive to grow their tax bases, sponsor development, or fix structural problems.

But this situation is far from sustainable, and the London gravy train may just be coming off the tracks. Economic trouble at home, political chaos and war in the Middle East has seen the London property market seriously stumble for the first time in years. The biggest collapse in prices has occurred in boroughs like Westminster and Kensington and Chelsea, reflecting a flight of international capital from London’s housing market. If shortages worsened by regulatory barriers and social housing have driven the housing crisis in London, so too has the financialisation of property as housing shifted from practical consumer goods to speculative financial assets. Foreign buyers and renters face few limits to their capacity to outbid native renters and buyers, and the presence of the global jetset in London has helped push up prices across the city. Foreign labour and capital do much to flatter a stuttering and dysfunctional domestic economy, even as they have imposed ever more severe social and economic costs in the long term.

London is a city that needs to be rethought

The housing market is caught between the hammer of globalised demand and the anvil of rationed supply. If every 1 per cent increase in stock decreases prices by 2 per cent, every 1 per cent increase in transactions by foreign entities in the domestic housing market increases prices by 2%.

London is a city that needs to be rethought. For all that people love it and make it their home, it is no longer a city that exists for the country of which it is the capital, or for its own citizens. This simultaneous loss of civic and national identity is driven by the internationalisation of the city. The physical infrastructure of the city is colonised by soulless plate glass monoliths, fossilised in post-war social housing, or fractured across subdivided period properties. The best parts of its old character — dense, riotously English, economically productive, culturally fertile — have been lost and dispersed.

Reclaiming London is as much a project of moral courage and imagination as it is one of policy levers and capital allocation. The unholy marriage of globalisation with post-war welfarism is now a union of corpses: two systems that have long since failed. Yet the inherent strengths of the city remain, and might yet be unleashed. Culture and ideas simmer and boil away in London like nowhere else. Whilst pride in the city has waned, local communities in London can be incredibly strong, with little platoons and villages scattered across the capital, waiting to be engaged in a broader civic spirit. Stifling this lively spirit is the desperate weight of international competition and the rationing of housing. Young people lack the space to start a business or a family, to live and grow. The centre of the city is bleakly emptied out every evening, social life exsanguinated from the nation’s heart.

Turning things around means making hard choices, choices that London’s own politicians will never make, any more than turkeys vote for Christmas. It means prioritising work over welfare, families over finance, and valuing country and city ahead of cosmopolitanism.