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House Prices and the Politics of Housing
Publication date: 2002-08-15

With the house prices 'going through the roof', politicians and journalists are jumping up to 'identify the problems' and offer their solutions to the 'housing crisis'.

Some blame lack of government (taxpayers') investment in 'affordable housing', others blame 'capitalism', and still others blame the immigrants. They are all pandering to prejudices and emotions and seek to justify unlimited powers for the politicians.

Few bother to look at the problem from prime principles and to ask questions. So, again, we are left with the task of digging out the truth from under the heaps of myths and ideologies.

Buy, Buy, Buy!   -----   to top

There is an assumption in Britain today, that the moment a youngster leaves home to start his independent life, he has to buy a house of his own.

It also happens to be the case, that youngsters leaving home seldom start their independent lives earning big money, nor are they quite ready to settle down in a particular place.

So, why is it so important to buy a house of one's own the moment one starts one's adult life?

Can't one just rent a room, in a cheap area, and then buy a house, if and when one has sufficient income and the need to own a house is dictated by the circumstances of one's life? In some countries people on low, medium and even high incomes live in rented flats and houses throughout all of their lives, and only some decide to take upon themselves the burden of property ownership.

Why such urge to own a house at all times and at any cost?

The Skeleton in the Cupboard   -----   to top

To understand the reasons for this phenomenon, we would have to go back almost a century to the times of the First World War, because this is when the Rent Acts came into being. And these Rent Acts played an important part not only in shaping the British "housing landscape", but in turning the British System of Administration of Justice from an instrument of justice and protection of the rights of the individual into an instrument of enforcement of Socialist policies of the political governments of the 20th century.

Originally, the Rent Acts were introduced as war-time emergency legislation, limiting rent rises and giving temporary security of tenure, in the abnormal conditions caused by the war.

Bending the Logic and the Law   -----   to top

The Rent Acts were, however, not repealed after the state of emergency was over, but were ingested into the cesspit of twentieth century politics.

The twentieth century Labour Party Socialists saw private property as a social evil. Their aim was to put all private property into 'social ownership', and put themselves in control of the distribution of the resulting 'national cake'. They saw landlords, i.e. people who let their houses or rooms in their houses to others, not as parties to a contract, but as a 'class', which should eventually be 'expropriated', but could be tolerated temporarily until the Socialist Dream is achieved.

So, the law of contract, which was 'politically inconvenient' was perverted by introducing the concept of 'quasi-contract', which was a relationship imposed upon the parties by the government against the will of at least of one of the parties.

The word "quasi" means "seemingly", or "not quite". Because contract by its nature means a voluntary agreement, and in law a contract made under any form of compulsion is invalid, a "quasi-contract" is a contradiction in terms. But, while being nonsense, "quasi-contracts", that is contracts imposed by government, were "politically convenient" and "socially acceptable", and this is why they exist.

The essence of the 'quasi-contract' imposed by the Rent Acts, was that the government set the rent to a level which was convenient to them, and the landlord was obliged to rent his property at such government imposed rent practically forever.

So, in reality the relationship imposed by the Rent Acts was not 'quasi-contract', but 'quasi-expropriation'. The 'landlord' retained a formal title to his property and was responsible for it's maintenance and repairs, but the beneficial use of his property was taken over by the Socialist government, who used his property to provide subsidised 'social housing'.

Once a property became subject to such 'protected tenancy', it's value became that of an investement yealding whatever rent was established by the government. This in practice meant that, if the owner of such property wanted to sell it, he could do it, but the price he would get could be 10 to 20 times less than he would have got, if the property were sold with vacant possession.

It was obvious that this was a crime against private property committed by the British government. But the landlords were a minority, and had little 'clout' in the organised mob-rule of the Electoral Democracy. Yes, the rule of the justice-based Common Law, has been replaced with the rule of the Electoral Clout - Political Convenience and Social Acceptability.

Being unable to regain control of their property by legal means, some landlords were resorting to violence, with the result of the Socialists using such cases to vilify landlords as a 'class' still further, and to impose still further restrictions on their property rights.

Thus the Rent Acts were extended from unfurnished properties to furnished ones. And, by the last quarter of the 20th century, the only possible way of renting rooms without loosing control of one's property was 'bed-and-breakfast', because bed-and-breakfast establishments were considered as guest houses, and were exempt from the operation of the Rent Acts.

Homes Sweet Homes   -----   to top

The Conservatives, while calling themselve champions of freedom, could never stand up to the Rent Acts and abolish them as a crime against property.

With the concept of 'private property' having been vilified and the word 'home' having been given an emotive meaning by political demagogues and the media, the Conservatives started promoting the ideas of encouraging 'home ownership' and 'owner occupation' by introducing various tax incentives for 'owner occupiers'. This was a political use of taxation, and another abuse of government powers. This was also driving people towards home ownership.

In parallel with their 'quasi-expropriation' policies against private landlords the Labour Party Socialists were expanding their social housing. That is houses built at the public expense.

This still further encouraged the belief, that housing is a right, to be provided by the government, or private landlords, free.

The result of this activity are those crime-ridden 'Damilola' council estates, that from time to time get into the media limelight.

No, it is not the architecture, that makes these council estates areas of vice and depravity. The same houses built for private occupation can be sold as "desirable residences". It is not the shape of the houses that leads people to alcohol and drugs abuse, it is the attitude to life that people develop when they are deprived of the sense of control and responsibility over their own lives. Once people abandon responsibility for their own lives, their life looses meaning, and they seek refuge in alcohol, drugs, and promiscuous sex. While lack of respect for the property of others, which is implicit in the Socialist ideology, encourages vandalism, muggings and theft - 'redistribution of wealth'.

As social housing, constant wage increases as a result of strikes, and spiraling benefits could only be maintained by spiraling taxes and consequent spiraling prices, inflation had become a permanent feature of the 'mixed economy' of the 20th century.

This inflation was another incentive towards property ownership. Money was loosing its value, while prices of houses kept increasing.

So this is why today there is such a drive for house ownership.

Examining the 'Causes'   -----   to top

Now let us look at the 'causes' of housing shortage as identified by the political establishment: lack of investment in 'affordable housing', 'capitalism', and 'the immigrants':

Squaring the Circle   -----   to top

So what is the solution for the British housing shortage?

  1. Repeal of the Rent Acts in their totality as criminal legislation which has been enacted by politicians ultra-vires and is null and void.
  2. Criminalisation of abuses of powers by governments. This is necessary that no laws like the Rent Acts will ever be introduced in the future.
The above two measures will lead to liberation of the housing market and allow it to cater for the various needs of private individuals in the free society, which no government can ever foresee or cater for.


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