Editor

Cian Ireland’s letter from last week was on the right lines, but previous letters on this subject have seemed very confused on the role of private and public investment in housing.

The first problem is that new housing, whoever builds it, has to be built at current prices for the materials and work involved.In the case of a private investment this means that the investor has to charge a price for the sale or rent the new property, that covers his or her costs. If the market can bear it, they will make a normal profit. Fair enough. However, no reasonably efficient market can have two widely different prices for what is more or less the same commodity.

This means that the price of existing property, whether for sale or rent, will rise to more or less the same price as the new. Existing property owners therefore make a wholly unearned profit.The problem in this is that we have to pay through the nose for the homes we rent or buy in the private sector.

The case for public housing is similar to private housing in terms of the cost of new property.It is not however the same in terms of finance.

If a council has maintained a sound housing stock over the decades (assuming Westminster has not prevented them spending on its maintenance), the cost of the older houses will have been paid off by the rents the tenants paid in the past. As they continue to pay rent, a surplus is generated to pay for new houses.The council can then charge a rent, averaged over all its properties, that is much less than the private sector charges. There is no element of subsidy in this, except in the way that tenants in older houses help to build new ones.

Social housing can therefore be more affordable for local people than private housing. The price for private housing will tend to rise to whatever the market can bear, and in the case of Wales, that means to a price that people who live in richer areas of the world can afford to pay, both for homes, second homes, and‘investment’. Thatcher’s ‘Right to Buy’ policies undermined councils’ ability to maintain a sound portfolio of rented housing to finance new builds and provide for local needs.

Meeting the need for affordable housing will need providing for council, social and co-operative housing. Planning policies need to provide land for this, as well as protecting the culture and languages of Wales and promoting an economy that is not distorted by excessive holiday accommodation or second homes. That is not easy, and involves hard choices, but necessary if we are to have democratic control over our local affairs.

Leaving everything to the Tories in Westminster will solve no problems.

Tony Lovelock Glanypwll,Blaenau Ffestiniog

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