‘Finance for Housing’ by Cathy Davis

Cathy Davis’s new book, ‘Finance for Housing: An Introduction’ is much more than its title implies. It is essentially a text book about the economics, politics, and history of housing in the UK with a focus on finance.

Unlike so many other authors, Davis does not hide her own politics, but she is careful to separate out her descriptions and analysis of the housing system from her own views. Each point is well evidenced and comprehensively referenced so any reader can look for more on any topic raised. Davis explains housing issues through the medium of economic theory but without becoming too technical for the general reader. In particular, she provides an excellent summary of the development of the 2007/08 financial collapse and the consequent credit crunch (lest we forget).

It is possible to either read or pass over the sometimes detailed descriptions of financial mechanisms without losing the narrative. Each section is a well-told story of how and why policy developed in the way it did and why we have ended up where we are. Davis weaves the financial, economic, political and historical threads together in a readable and accessible style – and I like the way she introduces quotes from Charles Dickens, George Orwell, or Clement Atlee in support of a point. She uses her historical sweep to illustrate just how often the current policy positions of the Coalition are an exaggerated (if callous) extension of trends that have been in place sometimes for decades (for example rising rents and dependence on private capital).

The book is simply structured, with an introductory overview looking at the political choices lying behind housing finance decisions and the impact of the global financial crisis. The main part of the book describes British housing tenure by tenure. She then selects three issues around housing costs for separate discussion – marginal owner occupation, rent setting, and housing benefit. Given the current importance of housebuilding, it would have been interesting to see a chapter that pulled together the information on the economics and financing of housebuilding, which is there but dotted around the book. The other features I thought deserved a little more emphasis are the demographic and societal changes that underlie housing demand, and the Treasury conventions that discriminate against public housing. But then again the book would have been longer!

Given how strong the book’s analysis is, and the passion with which Davis’s views shine through, I was a little disappointed by the final chapter, intended as a discussion of the sustainability of our housing system. There is a short critique of austerity and arguments in favour of the proposition that class divisions are re-emerging as the poor get poorer, privatisation becomes more entrenched, and geographical concentrations of wealth and poverty become more pronounced. There is a slightly hesitant section on whether owner-occupation will remain as one of the drivers of consumer capitalism. Finally, there is a call for the abandonment of ideas of the minimal state and something of a clarion call to return to the radicalism in Government of Clement Attlee.

I was surprised that most of these discussions ended with yet more, presumably rhetorical, questions. By this point I really wanted to know more about what the author thought should be done. I was looking for the policy prescriptions on the nutty questions posed throughout the book: what should be done about private landlordism, should we favour a stronger safety net for poorer home owners, how should rents be set, how should new affordable homes be subsidised, and so on. Instead there were just a few ideas on a more interventionist state, a different approach to dealing with the deficit, an increase in income tax, and a new council house building programme, which seemed a little random.

It may be that Davis thinks her views are already well known through her other publications, for example her 2010 book ‘Did it have to be like this? A socialist critique of New Labour’s performance’ and her 2012 book called ‘Let’s Build the Houses – Quick!’ (both with Alan Wigfield).

‘Finance for Housing’ was written for housing politics and social policy students and staff, and my quibbles are minor: it is a mine of useful information and argument that will be of interest to anyone wanting to know more about the housing system, and so is highly recommended.

‘Finance for Housing: An Introduction’ By Cathy Davis, published July 2013 by the Policy Press, Paperback £24.99. www.policypress.co.uk.

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3 Responses to ‘Finance for Housing’ by Cathy Davis

  1. My apologies for getting Alan Wigfield’s name wrong in the first version of this post. Steve

  2. terry moore says:

    The big question will.be how did this happen when the uks economy goes down the pan.as the buy to let should have more controls through capital gains and forced defualt insurance.for if this govement bubble bursts,the whole market will go down the tubes.the only answer is to build more social houses.as buy to let is distorting the market terry

    • marcel says:

      If the last conference in Manchester where the new buyer should be able to afford a £1000.000 home in London, so London is not for subsidies using Housing Benefit to enable the JSA to live in a mediocrity manner, London is a very expensive area to live and a very taxable place to be comfortable like the Beckham and the Abramovitch. at this stage £450.000 is a cheap home for acquisition! the undersupplying for the poorer and homelessness to even stay around! basically no home for the low ladder who can not afford the first buying ladder because of no financial insurance, nor mortgages, nor residual income and nor ratio income, so soon to live in the capital, you should be able to have a lot of monies. The finance for Housing became not to let to the poor for lack of returns, also not for the poor workers while wages are still low and rogue landlords are everywhere for opportunities, financial opportunities.

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