Do these figures add up?

Jacky Peacock, Head of Policy at Advice for Renters

I was never very good at maths, so I invite you all the check whether these figures really make sense. If they do, the next question is 'Why aren’t we ending the housing crisis right now?'

About five years ago, a report in the Church Times stated that, to end the housing crisis, we needed to build 3.1 million Council homes over the next 20 years. I make that 155,000 a year. We’re currently well short of that - according to the Local Government Association we’ve built an average of only 1,400 homes a year over the last ten years.

The cost of building a 3-bedroom house averages about £250k, so hitting the target could cost up to £38.75billion a year.

Is any Government going to spend that much?

Well, there are a few savings to bring the net cost down a bit. Housing homeless families in temporary accommodation costs £1.6bn a year, and living in poor conditions costs the NHS around £1.4bn. So leaving aside other social costs that brings the bill down to about £35.75bn - still pretty steep.

But hang on a minute, there's light at the end of this tunnel. I love a really good statistic such as one unearthed by this analysis of The Sunday Times Rich List which finds that the richest 50 families in the UK have as much wealth between them as the whole of the bottom half of the UK population. That is, those 50 families own £446,000,000,000; that is the same amount as is owned collectively by 33.5million people.

A more relevant finding for our council house building programme is that the rate of return for the richest 200 families since 1989 (when The Rich List was first published) is 8.7%. That is, the amount that their wealth has grown without them lifting a finger to make it happen. They could all have been basking on a tropical beach the whole time for all we know.

This same report calculates that if these 200 families only paid a miniscule 4% on that unearned increase, (they probably wouldn’t even notice!) it would come to £18.6bn. So that reduces Year 1 council house costs to £17.15bn.

But why not double the tax to 8%? That’s still a lot less than the 20% rate of tax most of us pay. Year 1 council house building programme paid for with a billion or so spare change.

Well this might be a silly example, but it’s designed to make an important point. You don’t need to change the tax rules very much to resolve the housing crisis and start to re-build the welfare state – making sure that we are all protected from the cradle to the grave.

That’s really the end of this blog, but I can’t resist one more statistic:

When The Sunday Times Rich List was first published in 1989, the Queen topped the list as the richest person in the UK. Our new King Charles has this year been relegated to 263rd place! So you can see there’s a lot of folk who could contribute a bit more to make life fairer for everyone.