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Britains.Housing.Crisis.What.Went.Wrong.S01E02
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00:00What we want to see is what I've called a property-owning democracy.
00:03We want to help people own their houses.
00:09The goal of a property-owning democracy.
00:13The right for every family to have their own home.
00:18To increase home ownership by one million.
00:23A whole generation given the security of a home of their own.
00:26Re-igniting home ownership in Britain once again.
00:33Giving millions of young people the chance to own their own homes.
00:39House prices have reached another all-time high.
00:43You'd hear a lot about people investing and saying,
00:46oh, that's just my pension.
00:47For someone who was trying to get on the property ladder, it made me quite angry.
00:51You would become a bit of a plaything in financial markets.
00:56Developers saw their profits soar and their share prices rocket.
01:01Investors and developers have got far too greedy.
01:04They've made far too much money out of people's homes.
01:10When I revert back to 2006, the idea, you've got to buy a home,
01:15push your finances to the extreme to buy a home,
01:19renting is a dirty word.
01:20But I do look back with real anger.
01:29It's entirely the government's fault.
01:32Governments in this country failed to build enough homes.
01:35The thing that makes me angry is that it is a political choice.
01:40Nothing needed to have happened.
01:42Nothing should have happened that allowed this market to get to this state.
01:50There's one big piece of unfinished business in our economy.
02:20And that is housing.
02:22A Greater Britain must mean more families owning a home of their own.
02:28Both David Cameron and George Osborne recognised that extending home ownership
02:32had been central to Conservative success.
02:35It was not just an electorally attractive thing.
02:38It was also, from their point of view,
02:40crucial to making sure that the property-owning democracy should be advanced.
02:45And in our manifesto, we announced a breakthrough policy,
02:50extending the right to buy to housing association tenants.
02:531.3 million more people given the chance to become homeowners.
02:58A promise made, a promise kept by this government.
03:01Yes, from generation rent to generation five,
03:06our party, the Conservative Party,
03:09the party of home ownership in Britain today.
03:14The nature of the offer to housing association tenants
03:17was one that would resonate with the new coalition
03:20that David Cameron and George Osborne were building.
03:23How do you feel about having the right to buy your housing association flat?
03:29Well, I'd quite like to, but I don't know whether I would at my age.
03:31Would I be allowed to at my age?
03:33Oh, I think you'd be allowed.
03:35Yes, I think it's a good idea.
03:37Housing association tenants would be allowed to buy their home at a big discount.
03:41Now, that would leave housing associations billions out of pocket,
03:44but the Tories say they've come up with a way to get round that problem,
03:48forcing local authorities to sell their most valuable council homes
03:52when tenants move out.
03:53That money would be used to build cheaper replacement council homes
03:57and compensate the housing associations.
04:09I mean, we were horrified when we saw what they were wanting to do.
04:13This was the time that people were beginning to understand
04:17just how bad the housing problems were
04:20and that it was, you know, government policies that were driving that.
04:26The policy really felt like an attack
04:29on what remained of the social housing system.
04:32It feels like the walls are coming in from all directions.
04:37The supply of social housing is shrinking.
04:40House prices are going up.
04:42Rents are going up.
04:43And that, that is a level of injustice
04:46that people will not stand for, for much longer.
04:51Housing bill!
04:52Housing bill!
04:53Housing bill!
04:53Housing bill!
04:55Housing bill!
04:55Housing bill!
04:56Housing bill!
04:57Housing bill!
04:59For more profit!
05:01Home store people!
05:02For more profit!
05:04He owns his home.
05:05I own my home.
05:07Why won't we let those 1.3 million own their homes?
05:10Why not?
05:10What are you trying to do?
05:12Help!
05:13Help!
05:13The housing bill!
05:15Obviously, if I could get the house cheaper or the flat cheaper,
05:17I would obviously buy it.
05:20I could buy this property for 172,000,
05:23but then I could resell it for 330,000.
05:27So I would have a very good investment.
05:30There was a pent-up demand of people living in housing-associated property
05:34who wanted to own their properties.
05:37So there was strong demand for it.
05:38There was strong political pressure for it coming through.
05:42We will not walk from here!
05:44We have a housing crisis of unprecedented scale in this country,
05:48but this housing bill will actually make the housing crisis worse.
05:54It wasn't just about trying to enable people to become property owners.
05:59It was rooted in a belief that this was not the state's role.
06:04The state should not provide housing to people who can't afford it.
06:07Help! Help!
06:08This bill would have resulted in the end of the social housing sector,
06:11as we've always understood it.
06:13It was going to kill it off.
06:14For homes for people, not walk from here!
06:17Made onto the statute book, it was ready to go.
06:19It just needed to be implemented.
06:21Housing was an important issue under the leadership of David Cameron,
06:25but then I just think what changed everything was the Brexit referendum was called,
06:30or the focus went in on that.
06:32For the first time in four decades,
06:40British voters are to be asked if they want to stay in or leave the European Union.
06:44While ministers met, a crowd gathered.
06:47We are approaching one of the biggest decisions this country will face in our lifetimes.
06:52Me and my mum live in a council house.
07:02My mum is disabled and needs a bungalow.
07:05Immigrants have bumped up the list because of this,
07:08am I right, to want to leave?
07:10I wouldn't make that connection.
07:12If we have a housing shortage, we should build more houses.
07:14That's how you describe it.
07:16APPLAUSE
07:16You have not got enough houses now,
07:21so how the heck are we meant to house them
07:23but we haven't got enough houses now as it is?
07:25So where are you going to cut them?
07:27The fact that we have to build one new dwelling every seven minutes
07:32just to cope with current rates of immigration.
07:36We're adding a city the size of Cardiff
07:38to the population of the UK every single year.
07:42In the run-up to Brexit, when I was reporting on the EU referendum,
07:47I remember travelling around the country and speaking to people
07:49about what was really on their minds, what was bothering them.
07:53And the housing crisis came up over and over again.
07:57The Chancellor George Osborne has told the BBC
07:59that house prices could be up to 18% lower if the UK left the EU.
08:04I mean, for me, that is an absolutely catastrophic economic mistake for our country.
08:11The Chancellor George Osborne says that Britain leaving the EU
08:14would cause a drop in house prices.
08:17Why should we think this is a bad thing?
08:22The British people have spoken and the answer is, we're out.
08:26I voted out myself and one of the reasons was
08:30so property prices would come down,
08:32make it easier to come onto the ladder.
08:33Hopefully Brexit will bring the prices down a wee bit.
08:36That might be the one advantage, actually.
08:37A negotiation with the European Union
08:42will need to begin under a new Prime Minister.
08:45And I think it's right that this new Prime Minister
08:48start the formal and legal process of leaving the EU.
08:53Her Majesty the Queen has asked me to form a new government
08:57and I accept it.
08:59So I was appointed Housing Minister in July 2016.
09:04I was actually up a tree in my garden,
09:06sawing off a branch when the Prime Minister called me up.
09:09So it was a slightly surreal setting for the conversation.
09:13The purpose was very clear
09:14that she wanted to give additional emphasis to housing as an issue.
09:18She wanted to elevate it up the political debate.
09:20We were facing a housing crisis that in many parts of the country
09:26it was becoming increasingly unaffordable
09:29for people on quite decent jobs
09:31to be able to get on the housing ladder
09:34and that that crisis also spilled over then
09:36into the rental sector as well
09:38in terms of the affordability of homes to rent
09:40and people that were finding themselves homeless
09:42because they couldn't find any property.
09:45If you're young, you'll find it harder than ever before
09:51to own your own home.
09:53If you have your own home
09:55that you worry about paying the mortgage,
09:58the government I lead will be driven
10:00not by the interests of the privileged few,
10:04but by yours.
10:06I think what I wanted to achieve
10:08was see if we could freeze house prices
10:09for a long period of time.
10:11What we were looking at was
10:12can we stop further house price inflation
10:14so that over time as wages go up
10:17housing becomes more affordable.
10:26The Bank of England has cut interest rates
10:29to a new record low
10:30and warned of a sharp slowdown in the economy
10:33following the vote to leave the European Union.
10:35To help, a creation of more money,
10:38£170 billion to be precise.
10:41Pumping it into the economy
10:42through so-called QE, quantitative easing.
10:45This is basically where a central bank
10:47creates electronic money
10:48to inject into the economy via commercial banks.
10:53As always,
10:54a loosening of monetary policy
10:56will be inclined to increase house prices.
11:00But I think the Bank of England
11:01didn't have a great deal of choice at that point,
11:04given that the Brexit vote itself
11:06was something of a shock to the economy
11:08and perceptions of the economy.
11:23We were not keeping supply up
11:25as a country with where demand was heading.
11:28And like anything,
11:29when you don't have enough supply,
11:31prices just keep going up and up and up.
11:34Now, housing is the big political hot potato, isn't it?
11:3720 years ago, working people, on average,
11:40were paying around 3.6 times their annual earnings
11:43to buy a home in England and Wales.
11:45Last year, though,
11:46the average was more than double that.
11:50Over a period of about 30 or 40 years,
11:54governments in this country
11:55failed to build enough homes
11:57to meet the demand that there was.
12:00I mean, it's a simple market.
12:01The big developers must release
12:10their stranglehold on supply.
12:12It's time to stop sitting on land banks,
12:14delaying build-out.
12:16The homebuyers must come first.
12:18Building more homes is critical.
12:21Let's build the houses we need
12:23to ensure that Britain is a country
12:25that works for everyone.
12:29Thank you very much.
12:32In the early days of Theresa May's government,
12:35there was, unfortunately,
12:36there was an element of, you know,
12:37sort of, and it's a developer problem.
12:39The real problem is developers' land banking,
12:41slowing things down,
12:42which is deeply frustrating.
12:44I was concerned
12:45that with some of the developers
12:47that they would get a, you know,
12:50maybe planning commission
12:51for 10,000 new homes
12:52in a particular development.
12:54They would rather just leak some out,
12:56you know, a few hundred a year,
12:57taking advantage of high house prices.
13:01We were saying to the developers
13:03that we felt
13:04we're holding on to sites for too long.
13:06If there isn't a good explanation,
13:08then we're not prepared
13:08to tolerate that behavior.
13:10When other people accuse you
13:11of slowing down something,
13:12you're desperately trying to move
13:13as fast as possible.
13:14That's quite difficult.
13:16There's always a balancing act
13:17around pace of development,
13:18but every site is being developed
13:19at a pretty healthy pace,
13:20and here's the range,
13:21and why some are faster than others.
13:23And we've also been through this question
13:24a number of times over the years.
13:39The big developers claim
13:41that whenever they get a plan of mission,
13:43they build out quickly
13:44because that's their business model.
13:45Well, it's not.
13:46I mean, their business model
13:46is to maximize profit.
13:48I was very excited
13:51when I was at Shelter
13:52that the government
13:53had even started to ask this question
13:55because for years,
13:56the assumption was
13:56it's just planning.
13:57If you give enough planning permissions,
13:59more homes will be built.
14:00And we had been screaming
14:01from the sidelines saying,
14:03you can give as many planning permissions
14:04as you want.
14:05Developers won't build them out
14:06if that means lowering the price
14:08because why would they?
14:10Dream of owning a home
14:21but need a little help?
14:23With Help2Buy,
14:24your deposit could be
14:25as little as 5%.
14:27Help2Buy is here to help.
14:30For details,
14:31go to helptobuy.org.uk.
14:33You know,
14:34it's hard to know
14:36whether policies like Help2Buy
14:38were just the result of ignorance,
14:42like economic illiteracy,
14:44or whether they were deliberately designed
14:46to favor property owners
14:49over everybody else.
14:51And loads of us were warning at the time.
14:54The IMF was warning
14:55that Help2Buy would push house prices up.
14:58I think the challenge with Help2Buy
15:00was that it was both necessary
15:02and unhelpful at the same time.
15:04If your answer to the housing problem
15:06is supply,
15:07build more homes,
15:08then you have to be honest with people
15:10and acknowledge it's going to take years.
15:12So the question for any government
15:14is in the meantime,
15:15do you do some things on the demand side
15:17to help people get onto the ladder?
15:19And the danger, if you do,
15:22is that although you're helping some people,
15:24you're also pushing up the price further
15:26and making the affordability problem worse.
15:28That's the trap.
15:30Hello.
15:30There were people in the Treasury
15:32putting forward the economic case
15:34for ending the Help2Buy program immediately.
15:38Indeed, I had to have quite a few conversations
15:40with myself about it.
15:42The problem we had by 2017
15:44was that the economy
15:46was again placed under threat
15:48by the Brexit vote decision.
15:51So we were dealing with a situation
15:53in which the economy had new challenges
15:55and new fragility to manage.
15:58The economic outlook following the vote
16:00to leave the European Union
16:01is challenging, according to Mark Carney,
16:04the governor of the Bank of England.
16:06Leaving economists,
16:06they now fear that there is this,
16:08look at that,
16:0950-50, 50-50 chance
16:10of the UK falling into recession.
16:12There was a credible case made
16:15that withdrawing the Help2Buy scheme
16:18completely with a hard stop
16:19would have undermined the housing market
16:22at a time when we were trying to protect
16:24the economy and support demand.
16:26Today, I can announce an extra £10 billion
16:30in funding to provide loans
16:32under the scheme through to 2021,
16:35helping an estimated 130,000 more homebuyers
16:39over the next few years.
16:45When Philip Hammond further extended Help2Buy,
16:49it felt like we'd just been banging our heads
16:53against a brick wall.
16:55It's not helping first-time buyers at all.
16:58I mean, there's a stunning statistic here
16:59that says a government survey found that
17:0057% of used Help2Buy
17:03could have afforded a house anyway.
17:05Driving house prices up.
17:06It's only the opposite of what the policy should be.
17:08I mean, Help2Buy is a cod anyway.
17:10It doesn't really...
17:11All the experts say it doesn't really work.
17:21Now, what about the sector as a whole?
17:24I mean, they've had a tremendous few years.
17:26Jolly difficult not to make money in the sector
17:28at the moment.
17:29The government obviously making huge efforts
17:31now to build more homes.
17:34Red Row share price is up 70%.
17:36Persimmon 40% and Taylor will grow 50%.
17:39It's about time that any government actually noticed
17:41that we've got a serious housing problem.
17:43And thousands and thousands of people
17:45simply can't afford housing.
17:46I was definitely aware that developers were doing well.
17:51To be honest with you,
17:52I didn't have a natural antipathy to that.
17:54Right?
17:55If I want a developer to produce more and more houses,
17:58I need to make it worth their while.
17:59They're not a charity.
18:00They're not doing it for free.
18:02Right?
18:02So the fact that they could see a path to growth and to profit
18:05by building more and more houses was, to me, a good thing.
18:12The fundamental problem is that land and housing
18:16are being used for profiteering.
18:19The government seems to have lost sight of the fact
18:23that the housing market need really careful management
18:27if they are to work in the interests of ordinary people.
18:32I bought my new build property in 2014
18:49and me and my husband were really excited
18:52to be moving into our first brand-new detached house.
18:57You know, it was our dream home.
18:58I knew it was leasehold,
19:02but the lady in the salesroom said,
19:03don't worry, you can buy your freehold for a couple of thousand pounds.
19:07So I never really thought about the long-term implications
19:10of what that would actually mean.
19:12Good morning, yeah, we're talking about leaseholds.
19:14Those affected don't own the land their houses are built on.
19:20Leasehold is a fundamentally unfair
19:22and ancient business model, shall we say.
19:26It's an aristocratic feudal one.
19:29Traditionally, houses have nearly always been sold
19:32as freehold properties,
19:33meaning the buyer owns the building
19:35and the land it is built on.
19:37However, there has been a growing trend
19:39to sell houses as leasehold,
19:41meaning the buyer doesn't actually own the land.
19:43Modern leasehold and the laws around it
19:51were really outlined in the Victorian era
19:54and it was a way of preventing the Victorian middle classes
19:57from owning the homes outright
19:59and always paying a ground rent to the landowner.
20:03The nightmare began for me in this school playground, actually.
20:09One of my neighbours came up to me and said,
20:12our freeholds have been sold on.
20:15To be honest, I didn't really think much of it
20:17until she said to me,
20:18no, but Katie, do you understand what that means?
20:20And I said, no, I don't.
20:23No-one had really noticed, including a lot of my predecessors,
20:26that quietly, the development industry
20:28had turned the kind of leasehold system
20:31into quite a nice little earner.
20:33So we'd get developers, they'd build the development,
20:35sell the development on lease,
20:37have all these leaseholders,
20:38they'd taken the profit on the sale of the houses,
20:40but they'd also got the freehold,
20:42which they then also sold onto investment companies
20:46who could see the maths.
20:49They didn't ask us or consult us or anything at all.
20:53So then we thought, okay,
20:54so it would make more sense to go and buy your freehold
20:56because they said it would only cost a couple of thousand pounds.
20:59And they came back with 14,000 pounds.
21:01And, you know, I was like, no, no, it can't be right.
21:07And slowly the penny started to drop
21:09and we realised that on that moment
21:12when they sold our freeholds from beneath us,
21:15everything actually changed.
21:18The most important thing to understand about leaseholders
21:21is it just means a long tenancy.
21:22So you do not own the land,
21:24you do not own the building,
21:25you simply own time in that building.
21:28The point of the matter is that you are a tenant
21:31and the law will treat you as a tenant
21:33and you are considerably disadvantaged by that.
21:37Say I sold you a property
21:38and then years later you found you were being hit
21:40by all sorts of charges and costs
21:44and limits on what you could do with it.
21:46How do you feel?
21:47Angry.
21:47If you wanted to change the carpets,
21:50if you wanted to change where the kitchen was,
21:52if you wanted to keep a cat,
21:54you would often have to pay a permission fee
21:56to the freeholder in order to do this.
22:00They realised what a massive second income it could create.
22:03And that is what leasehold is.
22:05I realised that it is literally a blank cheque.
22:16I absolutely felt like I was missold and misled.
22:19And then I realised that things got a whole lot worse on our estate
22:23because half of the properties on the estate
22:26that were built by Taylor Wimpey
22:28had ground rent starting at £300.
22:30That was set to double every ten years.
22:31The developers were putting in these little mathematical quirks
22:37into leases of doubling ground rents, right,
22:40that nobody had really thought was going to ever amount
22:43to a huge amount of money.
22:44But actually, when you do the maths, it's big.
22:46My ground rent will double and double and double and double
22:49until it gets to £8,000 a year.
22:51Nobody had told us this.
22:53So actually in 2058,
22:55we'll be paying £8,000 a year in ground rent alone.
22:58And actually, I will end up be paying long-term
23:02about £182,000 just on ground rent alone.
23:06And all it is is a scam and lying in people's pockets.
23:10This meant that these houses were completely unsellable.
23:13I hate injustices.
23:17I hate being lied to.
23:20And if something needs changing,
23:21then, you know, I'm determined to see things through to the end.
23:27I set up a little Facebook group.
23:29People were joining from London, from the North East, from all over.
23:33And I realised then that this was a national issue
23:36and the scandal broke.
23:38Katie Kendrick's campaign on Facebook has gone national
23:40and over 5,000 people who've fallen foul of the leasehold rules
23:43are fighting for a change in the law.
23:46Everybody's lives are on hold.
23:47They can't sell.
23:48They can't move forward.
23:50They can't buy their way out of this mess.
23:52Because of the doubling ground rent,
23:54our flat was valued at zero.
23:56PLC housebuilders, that is, household name housebuilders,
24:00were up to this racket.
24:01They built them because they could make more money out of them.
24:04Campaigners say new legislation is desperately needed
24:07to stop people falling into a more expensive home-owning trap.
24:12And worst of all,
24:13these housebuilders were being subsidised by taxpayers' money
24:17through the Help to Buy scheme
24:19to create these toxic investment assets.
24:22So they cheated their customers
24:24and they took the rest of us for a ride as well.
24:27So I think, you know, I've always felt it was our problem.
24:38We got it wrong
24:38and I've always felt, you know,
24:40sort of personally responsible for that.
24:42We were clear that there was a real issue
24:44and also that it was our responsibility to deal with that issue.
24:47And we announced a review of the issue publicly
24:49and we then spent some time working out how many leases there were,
24:53who currently owned them,
24:54you know, what the right solution was for customers.
24:56This has literally taken over my life.
25:04I've got the most amazing family and husband
25:07and I couldn't do any of this campaigning without their support.
25:16And if I can make it better for people by getting rid of it completely,
25:22not just for houses but for flats
25:23because what I've, I've,
25:26the people that contact me,
25:28the horror stories,
25:29it is absolutely heartbreaking.
25:32You're selling the freehold from out under them?
25:46Yes.
25:46Without their knowledge?
25:47Yes, we are.
25:48Right.
25:49They had to know it was a lease.
25:50The solicitor.
25:51There's no way they wouldn't tell them
25:54that it wasn't a leasehold property
25:55and explain the ground running.
26:09Persimmon's main crime was spreading leasehold houses all over the country,
26:12even in geographic areas which didn't have any leasehold houses.
26:16Persimmon saw the advantages and the profit to be made out of spreading leaseholds
26:20and used its persuasive sales teams to kick out leasehold houses.
26:25You ask for my reaction to Persimmon,
26:30it's complete contempt.
26:32Who can not feel contempt for Persimmon?
26:35They were cheating their own customers, basically,
26:46and paying their chief executive, what was it,
26:49a £110 million bonus he was set to receive
26:52and he accepted only £75 million.
26:54So it shows what a sort of humble fellow he is.
26:56No, I'm sorry.
26:57Persimmon reveals all that was wrong
26:59with the house building sector in this country.
27:02Give me your name and your title, then, please.
27:06Yeah, Jeff Fairburn,
27:07chief executive of Persimmon Homes PLC.
27:10And just give us the spelling of Jeff.
27:12Jeff is J-E-F-F.
27:14OK.
27:15Persimmon's doing well.
27:16This year did well.
27:17Last year, that was reflected in your bonus.
27:20Do you have any regrets about the furore surrounding that?
27:24I, er...
27:26I think...
27:26I'm sorry.
27:30We're talking about...
27:31Obviously, the construction of the bricks, you know,
27:34follows on from how well Persimmon's doing,
27:36so I just thought the two issues were tied together, really.
27:40I'd rather not talk about that.
27:41It's been well covered, actually, so...
27:43So you don't want to discuss that today?
27:46Are there any lessons...
27:47Are there any lessons to be learned from that?
27:49It was the biggest bonus in the country.
27:53No?
27:54OK.
27:55In this country, I'm afraid, house builders are not struggling to sell their houses.
28:14And they've treated their customers with contempt, I'm afraid,
28:18both in the sort of legal tenure that they've introduced into their housing,
28:21which creates an income stream at the expense of their former customers,
28:24but also building spectacularly badly.
28:27I mean, they were kicking out rubbish and getting away with it.
28:36Could this be the next house-building scandal?
28:39The survey suggests a third of people who bought newly-built homes
28:42aren't satisfied with the properties.
28:45There's nothing there. The mortars completely disappeared.
28:48No rainwater pipes.
28:50We've had tiles falling off of our house.
28:52We've had tiles hitting our car.
28:53Insulation issues, damp issues.
28:56There definitely were concerns about quality
28:59in terms of new-build homes.
29:02The focus was so much on quantity, on supply, on tackling the crisis.
29:06I'm not talking about dodgy kitchen units.
29:09I'm talking about major structural failings.
29:12The industry started to be criticised by first customers and then government.
29:17And I think much of that criticism was fair.
29:19I inspected the eaves and I found that the fire barriers were missing.
29:23Sleeping in a house when you know that you have these particular issues,
29:26it's certainly been stressful.
29:27I wanted a lovely home that I've always dreamed of.
29:31And it turned into a nightmare you can't imagine.
29:36You would have thought that they'd behave a bit better
29:48in acknowledgement that taxpayers were propping up their profits.
29:52We've invested billions of pounds
29:54to get a small number of people onto the housing ladder
29:58and this is how the house-builders have repaid us.
30:01I have just chaired a meeting of the Cabinet
30:10where we agreed that the government should call a general election
30:14to be held on the 8th of June.
30:20Can you unite the country?
30:22The Conservatives say they will join forces with councils and housing associations
30:33to build thousands of new homes for rent if they win the election.
30:37Theresa May says she wants to fix a broken market.
30:41Why should anyone believe a word they say over the next seven weeks?
30:46All the parties pretty much are promising to build more houses
30:49as parties do, just ahead of a general election.
30:52We've seen more than twice as much council housing being built.
30:56I want a Labour government that builds council housing!
31:02It was a surprise to hear Theresa May accept that we have a broken housing system,
31:07but I think they'd got to the point where they realised
31:10they could no longer get away with pretending that the system was OK.
31:14If housing for people to buy has become increasingly unaffordable,
31:20they have to rent housing.
31:22And that increased demand for rental accommodation
31:25pushes up prices in the private rented sector.
31:28So that then manifests in more people going to their local authority
31:32and saying, I can't find anywhere to live, and you need to rehouse me.
31:38And local authorities were telling us
31:39we're finding it increasingly difficult to find places to rehouse families.
31:44It wasn't about, oh, we just need to build more homes.
31:49It wasn't about, oh, there's just some middle-class people
31:51that, you know, can't get on the housing ladder.
31:55The problem was happening at a whole system level.
31:58So you couldn't just look at this as a problem with ownership
32:01or a problem with renting.
32:02The housing market is a whole thing,
32:04and demand for one tenure impacts on demands for other tenures.
32:14In 2010-11, there were your first year in government,
32:1960,000 affordable homes were built.
32:22May not be enough, but last year it was 32,000.
32:26You've half the number of affordable homes.
32:281.2 million families are on waiting lists for social housing to rent.
32:33That's your record.
32:34Why should we believe a word you say?
32:36Well, actually, two things, Andrew.
32:37First of all, this is quite different
32:39to what we've been doing over the last few years.
32:41It is quite striking that the department
32:45that is responsible for affordable housing,
32:48their budgets since 2010 have been cut by 62%,
32:52and all of that just gives you a very big clue
32:56as to where in these governments' views
33:00good quality housing sits.
33:03But we'd not invested enough money
33:05in our existing social housing for years.
33:09Social housing was regarded almost as a sort of
33:12don't worry about it, it's not important,
33:15doesn't matter if it's mouldy,
33:16doesn't matter if it's unsafe.
33:19They don't have an overall majority at this stage.
33:22314 for the Conservatives, 266 for Labour.
33:28Theresa May has played a high-risk political game
33:31and she appears she may have lost her gamble.
33:35I have just been to see Her Majesty the Queen
33:38and I will now form a government,
33:42a government that can provide certainty
33:45and lead Britain forward at this critical time
33:48for our country.
33:49So Theresa May walks back into number 10,
33:53still Prime Minister,
33:54but damaged, diminished, a smaller figure.
34:06Just before we leave you,
34:07let's show you these pictures just coming in to us
34:09from West London.
34:10The London Fire Brigade has confirmed
34:12they're dealing with this serious fire
34:14in a tower block at Latimer Road in West London.
34:17You can look at Grenfell Tower
34:27and see so much of what's gone wrong
34:29in the housing market,
34:31in the construction sector,
34:33this lack of oversight,
34:35this kind of freedom for industry
34:38to just pursue profit.
34:41Grenfell really is the pinnacle
34:43of what's been going wrong
34:45in social housing and in housing full stop.
34:51I moved into Grenfell Tower in 2001.
34:55I'd been in temporary accommodation
34:57with the council for a few years before that,
34:59living in a hotel in King's Cross
35:01and, yeah, it was just, it was amazing.
35:05And we, you know, the flat was built
35:07at a time where they really respected
35:09the people that were living in these flats.
35:13I'd say that I probably knew
35:16a good 90% of the people
35:18that lived in the tower
35:19and so, yeah,
35:21so it was an amazing community.
35:23I was lying in my bed
35:28and the first thing
35:30that I was aware of anything
35:31was that I heard my neighbour's smoke alarm
35:34going, oh, peep, peep, peep.
35:37Went to my front door,
35:38kind of expecting to see my neighbour
35:40outside his flat saying,
35:41you know, I've set the fire alarm off,
35:43you know, smoke alarm off,
35:44I've burnt some toast or whatever.
35:46And in fact, as I opened my front door,
35:48I was just confronted
35:49with this wall of, like, black acrid smoke.
35:53Coming out of the building
35:59and literally, I mean,
36:00I got out of the building at, like, 1.30,
36:02so it was half an hour
36:03after the fire had started
36:05and literally the whole of the side
36:07of the building was already ablaze
36:10and people at their windows
36:11shining torches
36:12and it was awful.
36:15It was really very awful.
36:20Guys, this is crazy, man.
36:21This is a building in London.
36:23Number two, West London, Latimer.
36:26Grenfell Tower.
36:27Grenfell Tower.
36:29Grenfell Tower.
36:30We raised, over a long period of time,
36:33numerous concerns around fire safety
36:35and all of these complaints
36:37were sidelined, not listened to.
36:40We were troublemakers.
36:40We were troublemakers.
36:42We're just hoping and praying,
36:44like the crowds around us here,
36:46that everybody has got out of this fire.
36:47I think that quite early we'd identified
36:53that our landlord was not capable
36:55of keeping us safe
36:56and that they were not being scrutinised
36:58by anyone
36:58and that something very terrible
37:01was going to happen as a result of that
37:03and, of course,
37:03on the night of June 14, 2017,
37:07it happened
37:09and 72 people lost their lives.
37:10There's definitely that constant
37:19kind of running theme
37:20of just social tenants
37:21particularly being not listened to.
37:24But there were deeper problems here too
37:25and some of these did go
37:26right to the heart of government.
37:30Successive governments
37:31had a role in creating the conditions
37:33for the Grenfell Tower fire.
37:34Government, from as early as 1991,
37:36knew that there was a danger
37:40from adding combustible cladding
37:42to the outside of buildings,
37:45that it could result in fire
37:47ripping up the outside very fast.
37:50The area around the tower
37:52is littered with these burnt remnants
37:54of the building's cladding.
37:56Survivors will want to know
37:57why it was so flammable.
38:00Why didn't they do anything?
38:02I think the answer,
38:03as you look through it,
38:04is that ultimately
38:05they subscribed to a philosophy
38:07which prioritised
38:08the state not regulating,
38:11the state not intervening,
38:12allowing industry
38:13to make its own choices
38:14and effectively make its own mistakes.
38:18And the result was
38:20the industry did make its own choices
38:21and its choice was
38:23to use the cheapest product available.
38:29Had they spent a little bit more money
38:30and put non-flammable cladding
38:32on that building,
38:33we wouldn't be here
38:33having this conversation.
38:34the lack of respect for us
38:37went deep
38:38and had awful consequences.
38:41You know,
38:46You know, as the cladding came off, not just at Grenfell,
39:14but all these other buildings, we saw how many corners had been cut,
39:18you know, where nails of one length had been specified,
39:21but nails much shorter had been used to save a bit of money,
39:25or where fire bricks that should have been between every floor
39:28had only been installed every other floor to save a bit of money.
39:34It's my understanding that a government's first duty is to protect the people,
39:39but, you know, our government's duty was to ensure that businesses could make profit.
39:55The whole regulatory framework over which we presided was just totally inadequate.
40:02Successive governments have to take responsibility for that.
40:04Grenfell was such a moment of horror for everyone
40:10that finally it became the thing that made people think,
40:13we really have to do something about this.
40:15This is not acceptable any longer.
40:18And an acceptance certainly in that government
40:21that what we'd been saying about the nature of the housing crisis
40:25wasn't hyperbole, it was just a statement of fact.
40:29After seeing the unimaginable tragedy unfold at Grenfell Tower,
40:38I was determined that we should get to the truth,
40:41because Grenfell should never have happened
40:43and should never be allowed to happen again.
40:48Theresa May obviously saw both the horror for herself,
40:51but also witnessed the anger of the people that lived in that area.
40:55It did, you know, imprint itself quite strongly on her.
41:00So when, for example, the then Secretary of State, James Brokersho and I
41:04were very keen to expand social housing provision,
41:08we got lots of cooperation for Number 10.
41:10They were all for it.
41:12Today, I can announce that we will invest
41:15an additional £2 billion in affordable housing,
41:20and in those parts of the country where the need is greatest,
41:23allow homes to be built for social rent, well below market level,
41:28getting government back into the business of building houses.
41:39The Prime Minister, I think, was very keen
41:42to explore how we could do more.
41:46I'd been involved in conversations with her,
41:48and she was perfectly happy for more money to come from the Treasury,
41:52but the guy running the Treasury said,
41:54you're not going to get any more money.
41:57That was frustrating.
41:59The Treasury is always very sceptical of arguments,
42:03particularly if they come from Number 10,
42:05that everything can be solved by spending more money.
42:08Sometimes problems can be solved
42:11by structural reform and some money on top,
42:15but very seldom by spending money alone.
42:18The House of Commons inflicts a crushing defeat
42:34on Theresa May's Brexit agreement.
42:36By the time I entered government,
42:38it's fair to say that the majority of government's attention
42:40was on Brexit and the ramifications of that.
42:43But that said, Theresa May was genuinely committed to her,
42:46what she called her, burning injustices agenda.
42:48The Prime Minister has once again suffered
42:51a heavy parliamentary defeat on her Brexit deal.
42:54And housing was seen very much as part of that.
42:57It was a chaotic and very, very demanding time on government.
43:01There was not a lot of bandwidth for housing issues.
43:03What do you want? Brexit!
43:05What do you want? Now!
43:07Stand on news! Stand on news!
43:10Every now and again, you'd get a message down
43:12from the Prime Minister's office saying,
43:13Have you got anything on housing? We need to do something about housing.
43:21For years, my dad had been fighting just to get into social housing.
43:26We had been in horrific temporary accommodation
43:29and in the converted guard garage.
43:31So when he was finally offered,
43:32or we were finally offered the place on Eastfields,
43:35Dad was... He felt lucky.
43:37But it wasn't fit for anyone to be living in.
43:52I knew that straight away.
43:55Conditions were absolutely slum-like,
43:57is the only way I can describe it.
43:58And we have cockroaches in the property.
44:01We had damp, we had mould, we had mice,
44:04we had lights filled with water,
44:05we had a bathroom which wasn't fit for use.
44:08My dad was complaining from the beginning.
44:10Please, can you come and fix it?
44:12And they completely dragged their feet.
44:14I mean, they didn't... They didn't sort it.
44:18My dad was diagnosed with stage 1 esophageal cancer.
44:21The nurses were absolutely horrified and disgusted
44:29at the conditions that were coming to...
44:31that were having to come and treat him in.
44:34And they would ask loads of questions about it.
44:36Why is nothing being done? Why is it like this?
44:38They were angry themselves that it was being allowed to happen.
44:46The doubters, the doomsters, the gloomsters,
44:49they are going to get it wrong.
44:51Again, we close the opportunity gap,
44:54giving millions of young people
44:56the chance to own their own homes.
45:01He caught an infection, and I have no doubt
45:04it was because of the conditions we were living in.
45:06And a few months later, in January 2020, he died.
45:17I thought, it's time things change.
45:20So I went in my home, took pictures, took videos,
45:23thought about what I was going to write,
45:24and uploaded a thread to social media,
45:26and it went viral in the space of an hour, I'd say.
45:29It was picked up by the local news.
45:37When Quajo's father was dying of cancer,
45:40he lived in a flat with issues including mouldy walls
45:42and a vermin infestation.
45:44It made a really bad experience, much worse.
45:48I feel like I was ignored, my dad was ignored,
45:50and my family was ignored.
45:59We have done a lot of work since to try and make sure
46:03that those conditions, the conditions within those homes
46:07remain habitable.
46:09Previously, they'd been owned by local authorities.
46:12We took them on, but the level of underinvestment
46:17over many, many decades is such that
46:20some of those homes now are at the end of their life,
46:24and the only realistic option
46:27is that they should be demolished and replaced.
46:31In Merton, in southwest London,
46:33we have three estates that we are regenerating.
46:37That is going to cost us 1.3 billion pounds.
46:40There's absolutely no excuse for any landlord,
46:49public or private, to leave housing in that sort of condition
46:52and not care for your tenants and the properties
46:54that you're responsible for.
46:56But of course, when housing associations
46:57are under financial pressure,
46:59it's harder for them to maintain all of their properties
47:02and to do all of their jobs effectively.
47:10So, in this next TikTok,
47:13I've decided to show some more housing horror stories
47:15that I've come across over the last few months.
47:18Ooh!
47:20They've had issues with cockroaches
47:21and first complained about 10 years ago.
47:24The mould and damps eating through the wall.
47:29More so literally, that's the same thing I would say.
47:32I became aware of KJ's campaigning work
47:37very shortly after I arrived in this department
47:39and some of the terrible living conditions
47:42that he exposed are horrific.
47:46The nature of poor social housing
47:49did not come as a surprise to me.
47:51But the extent of it has been shocking.
47:55I feel just neglected.
47:57I just don't even feel like I'm human-like.
48:02Hold on!
48:05What if my son was here?
48:07My son could have been sleeping there.
48:10And I'm tired of complaining.
48:11I don't want to be living in this condition.
48:14This is all mould.
48:16This is all mould.
48:17It looks like there's been a fire.
48:19It's terrible.
48:19I am on literally on the verge of nervous breakdown.
48:28Being a housing campaigner,
48:29speaking to people in social housing even now,
48:31it just showed me that finances and money
48:34were seen as more of a priority
48:35than the people living in their homes.
48:40Councils are very cash-strapped
48:56and we've seen the public money
48:59that was available for housing associations
49:00to keep them in good condition,
49:03to make themselves safe and healthy.
49:06All of that has been stripped back
49:08by political decisions.
49:10People who are in the social housing sector,
49:13they have access to significant funds.
49:16They should shape up in many cases.
49:19Yes, we can have a robust debate
49:20about the allocation of resources
49:22from national government,
49:23but let's not always have people
49:27who have a direct responsibility
49:29and professional leadership roles
49:31passing the buck.
49:33It's just not good enough.
49:40It's worth understanding
49:50just how low interest rates have been.
49:54I mean, if you're talking to somebody
49:55who's aged 30 now,
49:57they will think that interest rates
49:58of half a percent or one percent are normal.
50:01They're not.
50:02We have never seen rates anything like that.
50:05And then we had the pandemic,
50:07which just took everything we'd had before
50:10and cued it.
50:12The UK prepares for a new reality
50:15as the country adapts to sweeping plans
50:17to tackle coronavirus
50:18with no clear end date in sight.
50:21Investors around the world
50:22have been gripped by fear
50:23that not just the human cost,
50:24but the financial cost of this virus.
50:33This is the Bank of England
50:34kind of on overdrive,
50:35trying to create a kind of airbed
50:37for the whole economy
50:38by cutting interest rates
50:40and £200 billion of quantitative easing.
50:45It seemed to me to reflect a view
50:47that many central banks had at the time,
50:50which was, oh dear, here's some bad news.
50:53We'd better do some QE.
50:56That's not a very intelligent response
50:58to setting monetary policy.
51:03An increase in the amount of money
51:05in the economy
51:05will lead to higher asset prices,
51:08higher house prices,
51:09higher spending, more inflation.
51:11To catalyse the housing market
51:19and boost confidence,
51:21I have decided today
51:22to cut stamp duty.
51:24London's housing market
51:25was hit by lockdown,
51:26but estate agents say
51:28there's been a massive surge in interest
51:30since the government announced
51:31a holiday on stamp duty.
51:33The property market in the south-west
51:35is booming, demand is high,
51:37sales are up,
51:38houses are shifting and fast.
51:40Even with a pandemic,
51:45even with lockdown,
51:46an economic slowdown,
51:47the average house price
51:49over the last 12 months
51:50has gone up
51:51about £24,500.
51:54The demand is unprecedented
51:56here in Ebu Vale,
51:57where there's only one word for it.
51:59It's bonkers.
52:01When the bubble's inflating,
52:02it feels pretty good for everyone.
52:04There's a financial feel-good effect,
52:06there's a political feel-good effect.
52:07So even politicians and governments
52:10that are determined
52:11not to allow financialised housing bubbles
52:12to emerge
52:13can find themselves riding them.
52:16This house would have been worth
52:17about £155,000 before pre-Covid.
52:20And then since all of that happened
52:22and the lockdown came into situ in March,
52:24this house has now gone on the market
52:26for £214,000.
52:30Ultimately, it's completely unsustainable
52:31because you've got fewer and fewer people
52:35able to get on the housing ladder at all,
52:36so more and more of them are excluded.
52:38So they're unhappy
52:39and politically increasingly
52:41voicing that unhappiness.
52:43It just doesn't match up
52:44what the government is saying
52:46on the one hand
52:47about wanting to address
52:50the housing crisis
52:51and the policies that they're enacting,
52:55which just pour fuel on the fire.
52:58And if I'm honest,
52:58I have some real concerns
52:59about mortgages right now.
53:01Most people are on cheap fixes
53:03and they're expected when they end
53:04they're going to be able to fix again
53:05at the same rate.
53:06Well, the rate is likely to be a lot higher
53:07and they may not be able to get them
53:09and that is a real problem coming forward.
53:15Is it all over, Prime Minister?
53:18A Prime Minister on the brink.
53:20We are now hearing
53:21that Boris Johnson will resign.
53:28I have just accepted
53:30Her Majesty the Queen's
53:32kind invitation
53:34to form a new government.
53:36Now is the time to tackle
53:38the issues that are holding Britain back.
53:45Today we are publishing
53:46our growth plan
53:47that sets out a new approach
53:49for this new era.
53:52Reforming the supply side
53:54of the economy
53:55and cutting taxes
53:57to boost growth.
54:00The global markets react
54:02to the Prime Minister's economic plans.
54:04The cost of government borrowing
54:05shoots up
54:06and the pound plunges
54:07to an all-time low
54:08against the dollar.
54:16Tonight, a number of banks
54:17and lenders have stopped
54:19offering new mortgages
54:20because of the volatility
54:21in the currency markets.
54:22I've never seen a budget
54:23move to pound like this.
54:24My entire career.
54:26And whatever the Bank of England does,
54:27the markets are charging
54:29the UK ever higher prices
54:30for borrowing.
54:32The mortgage market
54:33is in shock.
54:34An unprecedented 935
54:36mortgage products
54:37were withdrawn last night
54:38as lenders don't know
54:40how high interest rates
54:41will go.
54:41Once Jeremy Hunt
54:53was in place
54:54as Chancellor
54:54I had a meeting with him
54:57where I pushed hard
54:58that I thought
54:59there was
54:59a potential
55:01mortgage ticking time bomb.
55:03On the back of that
55:04the Chancellor
55:05called a mortgage summit.
55:07It was attended by
55:09the boss of the regulator
55:10the boss of all the big banks
55:12and me.
55:13I argued that we needed
55:15to be ready
55:15to try and prevent
55:16mortgage catastrophe
55:17for some people.
55:19Arreas, defaults
55:20and repossessions.
55:21And I came up
55:22with a number of policies
55:23and they were discussed
55:25and there were lots of nods
55:26and agreements.
55:28That was December.
55:29But those measures
55:31were not enacted.
55:43These are the highest levels
55:45since the aftermath
55:46of the mini budget crisis
55:47late last year.
55:49What our viewers want to know
55:50is what are your solutions?
55:52Dean Patterson has told us
55:54my mortgage is due for renewal
55:55I'm due to pay double.
55:57Mike in Essex has said
55:59he can't sleep
56:00at the moment
56:01with the stress
56:01his mortgage is going to go up
56:03by £500 a month.
56:05So what are you going
56:06to do about it?
56:07Well, the first thing
56:08is to make sure
56:09that we command
56:10the confidence
56:11of international markets.
56:12And suddenly
56:13we were now
56:14at that ticking time bomb
56:16explosion period
56:17with mass panic
56:19from people
56:19coming off fixed rates
56:20going
56:21how on earth
56:22am I going to be able
56:23to pay the new bill?
56:25And I felt
56:25a real frustration
56:26over this
56:27because the warning
56:28had been there.
56:29So I put something
56:30on Twitter
56:31basically saying
56:33they can't say
56:34they weren't warned.
56:39On Friday
56:40I met the UK's
56:41principal mortgage lenders.
56:43At that meeting
56:44I secured agreement
56:45from lenders
56:45to a new mortgage charter.
56:48New support
56:49for people struggling
56:50with their mortgage payments.
56:51The boom in residential property
56:59in Britain
57:00which has gone on
57:00over the last 25 years
57:02has been an absolute disaster.
57:05It has turned housing
57:06which is a social need
57:07into an investment asset
57:09which has made property
57:10inaccessible
57:11to younger generations.
57:13And I think
57:13all politicians
57:14should think very hard
57:15about that.
57:16If they speak to
57:18young people
57:19up and down the country
57:19young people like me
57:20and ask them
57:21about owning
57:22their own property
57:23they're going to say to you
57:25it's so unattainable
57:27at the moment
57:27that they've almost
57:28come to terms
57:29with the fact
57:29that for now
57:30it's not going to happen.
57:32Fundamentally
57:32the housing system
57:34is not working
57:35for the majority
57:36but it is working
57:37for landlords
57:39for developers
57:40and for the people
57:41with multiple homes.
57:42and for the people
58:12What's different about the UK housing market that impacts where we build and how we rent
58:25our homes? To watch exclusive insights from government and housing market experts, go
58:30to bbc.co.uk slash Britain's Housing Crisis and follow the links to The Open University.
58:42Dealing with life, death and crime, The Met. Back for a new series. The gritty day-to-day realities
58:49of police work on BBC iPlayer. Press red to watch now. Stephen Nolan has a tense confrontation
58:56with the prisoner jailed inside MacGabrie Prison. Next.
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