Intended to make houses affordable for first-time buyers, the government’s Help to Buy scheme has ended up just funneling money into the pockets of profiteering construction companies.
The Help to Buy scheme introduced by the coalition government in 2013 was presented as a way to deal with the housing crisis and allow young people to get their first home. Instead, all it has achieved is increased house prices and greater profits for housebuilding companies at the expense of the taxpayer.
A grotesque example of this was seen recently when the housebuilding company Persimmon – which sells almost half its houses through the scheme – reported profits of £1bn last year. This is the largest profit ever made by a UK housebuilder – a direct result of the Help to Buy scheme.
Since the introduction of the scheme, Persimmon has almost tripled the profit it makes for each house sold. The bosses at Persimmon rewarded themselves with almost £500m in bonuses dished out to their 150 most senior managers.
There is no such reward for the customers of Persimmon, who have regularly complained about the poor construction of their new homes, reporting windows cracking and pipes leaking within days of moving in.
The workers at Persimmon have also not benefited from the huge profits made over the last few years. Persimmon only agreed to pay its builders and cleaners a living wage from January this year as a PR move, after a public outcry over the extravagant bonuses being taken by its bosses.
Meanwhile, the housing crisis has escalated. The housing charity Shelter reported that homelessness increased to 320,000 last year, which it believes is an underestimation of the real figure. This reflects an increase of 13,000 people who have lost their homes and ended up on the streets or in temporary accommodation.
The capitalist system is incapable of resolving this crisis. It is driven by profit and it is simply not profitable to build decent, affordable homes. Every attempt to resolve the housing crisis on the basis of capitalism merely further subsidises the bosses profits. This is the case with housing benefits, which subsidise landlords profits; and with the £10bn of taxpayer money spent on Help to Buy, which, according to a report from investment bank Morgan Stanley, nearly entirely ended up in housebuilding companies’ pockets.
Despite this abject failure, Philip Hammond announced in 2017 that a further £10bn would be spent on the scheme. No doubt this was music to the ears of the bosses at Persimmon and the other housebuilding companies.
Instead of continuing to subsidise Persimmons profits, we need a socialist Labour government in power to carry out a housing programme that nationalises Persimmon and the other construction companies. Alongside nationalisation of the other major monopolies and the banks, this would allow us as a society to use these resources to build millions of good quality, affordable homes for all.
