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Martin Pawley: back to square one after 100 years, or worse?

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Housing is a funny business. Ever since the tremendous population increase of the nineteenth century it has flickered in and out of the policy frame. This time last century it was the housing problem ('problem' was the word that was used at the time) and it was solved by the production of huge numbers of houses in the wake of two world wars. This production solution only ended a generation ago. When I first went to work for the aj, the magazine was running a series of articles called '500 thou', dealing seriously with the task of designing and building 500,000 houses a year - a target that actual completions came very close to in the late 1960s. Nowadays any such figure would seem impossible: especially if half of them were to be produced by local authorities.

Compared to this grand adventure, it is hardly surprising that Tony Blair's much vaunted £800 million to 'turn around' 4000 sink estates seems like very small beer indeed. It only amounts to the price of one detached house in the South East for each estate: the equivalent of a bare £80 million in 1968 money.

Today we have reached a kind of plateau of credibility in housing matters. Nobody any longer believes that high-rise, high-density housing is the cause of vandalism and social exclusion, any more than they believe that low-rise, low-density housing is the solution to it. Nor does anybody seriously believe that the private sector can take care of the homeless, or shops or banks be induced to remain open on estates where no one works or has any money. Everything to do with the future in housing, everything summed up by the phrase 'New Deal for Communities' speaks of an area where technical solutions are no longer on the agenda unless they are of the communitarian self-help variety - which is more or less to say that at the end of the twentieth century we are more or less back where we were at the end of the nineteenth century as far as the housing problem is concerned.

Almost, but not quite, for if public and charitable housing has done no worse than return to square one after 100 years, home ownership is in a far worse condition than it was in the last half of the nineteenth century. In those days the interest rates charged by 3600 competing building societies were either fixed, or remained static for decades on end. The Halifax, for example, charged 4.5 per cent from 1859 to 1915. Today the interest rates charged by the handful of surviving building societies and the converted banks and mortgage companies that have replaced them fluctuate unpredictably, increasing debt at will.

Far more promising news for housing in the long run than 'New Deal for Communities' was last month's decision by the Office of Fair Trading to challenge the right of the £450 billion mortgage industry to use variable rates to increase debt. There is still a long way to go, of course, but a legally enforced return to static mortgage interest rates would indeed be a return to nineteenth-century practice, but a welcome one.

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