On 11 November 1918, the war to end all wars, World War 1, ended with the signing of the armistice. The next day, David Lloyd George, then UK prime minister, called a general election promising that the government would provide “habitations fit for the heroes who have won the war”. This became known as the “homes fit for heroes” speech. The election was a landslide victory for David Lloyd George’s coalition government.
On 31 July 1919, the Housing, Town Planning, &c. Act 1919 passed onto the statute books. This act amended the law related to the housing of the working classes, town planning and the acquisition by local authorities of small dwellings. This act became known as the ‘Addison Act’ after its author, Dr Christopher Addison, the Minister of Reconstruction and then of Health. Lloyd George was concerned with the emergence of Bolshevism and Revolution; state expenditure on new homes, each with a garden surrounded by trees and hedges, was considered as an insurance policy. The Act imposed a duty on every local authority to survey housing needs and to make and carry out plans. It also guaranteed a state subsidy. The Addison Act was the start of a long tradition in the UK of housing provided by the state for the people.
On the 100th anniversary of the Addison Act it is important to reflect on the importance of this legislation and the role it played in transforming the life experiences of soldiers returning from the battle fields. This act is one of the beacons in the development of UK social housing policy. But, like the majority of policies, it was only partially effective.
Today, housing provision remains a major challenge for the UK. These challenges include affordability, availability and accessibility. In the UK, housing is considered as an investment asset rather than a social asset. This is unfortunate. As an investment asset households’ fix wealth into property on the understanding that they will benefit from an escalation in capital values. The resulting distortions lead to localised skill shortages as key workers, teachers, nurses, firefighters, are unable to rent or buy.
It is timely to reflect on alternative solutions to the hybrid housing economy that has developed in the UK. This is a hybrid between private sector ownership and renting, council housing and provision by housing associations. There are some interesting alternative solutions to housing provision that have been developed in other countries. Singapore had its own Brexit in 1959 as it separated from Malaysia. In 1960, the Housing & Development Board (HDB) was formed to provide affordable housing and a high-quality living environment for Singapore residents. Today, more than 80% of Singapore residents live in HDB provided housing units. These are provided by the state on 99 year leaseholds. The value of an HDB flat depreciates overtime depending on the utility value of the property (size, type, location), financing available and the Central Provident Fund (CPF) finance that might be available. The CPF is a comprehensive social security system that enables working Singapore Citizens and Permanent Residents to set aside funds for retirement including healthcare, home ownership, family protection and asset enhancement.
In Singapore property buyers can fund the purchase of an HDB flat with a bank loan, an HDB loan, cash or CPF funds. But, the resale value of an HDB flat deteriorates when there is less than 35 years left of the lease. An HDB lease is very different to a private sector leased property as ‘owners’ only possess the right to use the flats with property title and ownership remaining with HDB. In addition, HDB flat owners are unable to own two residential units at one time. Continued ownership of an inherited flat is only possible if the inheritor disposes of their existing private or public residential property within six months of inheriting the flat.
The Singapore system is very different to the UK. There are problems and advantages with this system. The state owned and controlled system means that the majority of residential housing developments are publicly governed and developed. Private sector housing is available but is much more expensive than the HDB housing units. The HDB flats are located in self-contained satellite towns that have been designed and developed with schools, supermarkets, sports and recreational facilities and health services. The HDB system is designed to produce affordable housing for those unable to afford private provision, but for Singapore HDB remains the dominant housing provider. As Singapore has developed HDB began to produce up-market housing developments including executive condominiums.
The comparison between the UK and Singapore solution to housing provision is extreme. In the UK, council housing is considered to be a public sector cost, a burden, but also for many this is housing provision as a last resort. In Singapore, it is both a public sector asset as well as a social asset and is not seen as a form of alternative provision to be avoided. For the UK, the mixed economy of housing provision results in major social and economic distortions with problems related to availability and affordability. For Singapore, HDB invests to ensure that housing units are available and affordable. Transferring the Singapore solution to the UK would be impossible, but perhaps there are lessons to be learnt regarding the development of a longer-term approach to the provision of “habitations fit for citizens”.