Report by Saija Lukkaroinen, Hackney local group of Positive Money supporters
On the 19th October 2014, 120 people gathered at Chats Palace in Homerton to discuss the causes and consequences of the current housing crisis. The sold-out event was entitled The Hackney Housing Debate and it was hosted by the Positive Money Hackney Local Group.
The debate was attended by local residents as well as Hackney politicians – Diane Abbott, MP for Hackney North and Stoke Newington, spoke at the event and the councillor Philip Glanville, Hackney Cabinet Member for Housing, took part in a panel discussion. The Liberal Democrat electoral candidate Simon De Deney also attended and contributed to the debate.
There were speakers from three organisations: Ben Dyson from Positive Money, Heather Kennedy from Hackney Digs and David King from Priced Out.
Ben Dyson explained how the debt-based monetary system has lead to the rocketing cost of housing. Ben showed how private banks’ ability to create money out of nothing through their lending processes directs large amounts of newly created money into mortgage lending, pushing up house prices. The amount of money created through mortgage lending quadrupled during the ten years leading up to the financial crisis, whilst house prices increased by 200%. During the same period, for every four new people in the country, three new homes were built, indicating that the increase in house priced is caused by the increase in mortgage lending rather than an increase in the number of people looking for a new home. Ben proposed that by granting the power to create new money to a publicly accountable body rather than private banks, house prices could be levelled out and resources could be directed into socially useful purposes – for example into funding social housing programmes.
Heather Kennedy from Hackney Digs shed light on the difficulties facing people who live in rented accommodation, including the current overpriced rents and insecure tenancies. Heather spoke about the impact of the lack of council house building and the selling off of council owned properties, and argued that there needs to be a new focus on increasing social housing and capping rents at a reasonable level. Heather also made the point that stricter legislation is needed to offer tenants better protection and a higher quality of homes.
David King from Priced Out argued that a factor contributing to cost of housing crisis is the current tendency to treat housing as an investment rather than a place to live, with a sharp increase in the number of buy-to-let mortgages being approved in the years preceding the financial crisis. This tendency has increased demand during a period of time when councils have stopped building new houses due to the policies introduced under Thatcher to encourage more people to buy their own home. Priced Out argues for house building to be increased and for policies to be created that treat houses as places to live rather than financial investments.
The debate ended with an hour-long interactive discussion with people from the audience making interesting contributions and expressing their dissatisfaction with the current situation. The importance of renewed council house building was emphasised many speakers and it was recognised that the current system, including the debt-based monetary system, do not promote the interests of the majority of people.
The popularity of the event and the feedback from attendees clearly shows that housing is an issue people feel strongly about. Whilst it should be noted that there are many factors affecting housing, it seems more urgent than ever to stimulate further public discussion about the role played by private banks’ lending activity in pushing up house prices. If banks continue to be allowed to create new money through mortgage lending, they will continue to be incentivised to lend more and more – resulting in house prices remaining beyond the reach of more and more ordinary people.