Home truths: 'Squatting is the perfect example of the Big Society'

They're drinking chai lattes at the Pogo Café, a "space for alternative culture" run by volunteers in Hackney. At the till, a man in dreadlocks is telling anyone who will listen how he "struggles with his veganism as a practical thing". Youths with Shoreditch haircuts lounge on second-hand sofas, hooked to their Apple Macs. On the right, a bookshelf is lined with titles such as "Openly Classist", "Wilful Disobedience", "Bash the Rich", and, my favourite, "La Dolce Vegan!". On the left, a board is covered with notices. "Squat urgently needed, little English spoken," reads one. Another: "Female vegan sought." This is squatter heartland, where a new generation of rent refuseniks comes to meet and offer each other support.

Before I arrive, I read an astonishing statistic: there are 700,000 empty houses in Britain today. The highest proportion is in the urban north-west, where whole streets stand unoccupied. But walk down any street and you'll find one; the telltale signs – dusty, drawn curtains, letter boxes jammed full of post, chipboard windows – can be seen in every town and city in the country.

Here in east London, a few doors down from the Pogo, an estate-agent's window offers an indication as to why a growing number of young people are turning to squatting. A two-bed flat is £475 a week; a one-bed period conversion, £325. It's not a lot less than the median weekly wage last year: £499. But Cat Brogan, 26, pays nothing. She has been squatting for more than three years, and last November gave up her day job. Now she is a full-time poet, supporting herself on poetry readings and school workshops.

"I didn't want to be a wage slave," she says, over a cappuccino. "But it took me a long time to accept that art and poetry were worth putting my time into. I don't think that life is about getting on to a career path and sticking in the same job for 15 years." Originally from Omagh in Northern Ireland, Brogan graduated in politics and English at York University in 2006 before moving to London to work for a fair-trade organisation. Her reasons for squatting are economical, but also philosophical: she believes the proliferation of empty buildings is not only inflating London's rental market – fewer homes means more demand for those that are available – but also an affront to communities struggling to house the poor. "People leave properties empty because to them it's money in the bank. But just think how a community could use that space."

In her previous squat, she staged poetry readings, and she describes all the squats she has been in as safe and friendly environments. She blames the media for misrepresenting the squatting community as made up of drug addicts and layabouts. "Most squatters have jobs," she says. "Personally, I'm not interested in drugs. I'm already quite happy in myself so I don't need them, and I'm also very tight with money. Again, within any circle of people, there will be some who have a drug addiction, as a way of coping, but I don't think the proportion is any higher among squatters – how many bankers have coke habits? How many doctors are alcoholics? It's no different."

Much like Morris dancing, bell-ringing or going to Ikea, squatting is a minor British institution we've learnt to live with. In fact, it might almost be proclaimed an ancient right: some say it all began with the Peasants' Revolt of 1381, though most point to 1649, a year of political unrest, when Gerrard Winstanley founded the True Levellers or Diggers, a group of peasants who occupied common land, claiming it as their rightful due. Squatting blossomed, out of necessity, during the Second World War, and grew again in the hippy days of the 1960s. In Scotland, it has been illegal since 1860, but in England and Wales, the law is a twilight zone of confusion.

The Advisory Service for Squatters estimates there to be 15,000 to 17,000 people currently squatting in the UK, though no official figures exist. The rise of this new wave has been likened to the 1970s, when anti-establishment groups saw it as a solution to the housing crisis; in 1979, there were an estimated 50,000 squatters in Britain, of whom 30,000 were in the capital.

These days, the tabloids delight in reporting stories of youths occupying multimillion-pound mansions in central London, blaming the vagaries of the law for allowing them to stay for weeks. Most prominent has been the Really Free School, a community of artists and students who have capitalised on the proliferation of empty buildings to host a scheme of free education – their name lightly mocks the Conservatives' plans for free schools.

More worryingly, stories have emerged of individuals returning home from holiday to find their home invaded by squatters, apparently powerless to kick them out. This prompted the Justice Secretary Ken Clarke, to call for a tightening of the law, to make the activity illegal.

It is not the first time the Conservatives have acted in this way. First in the 1970s and latterly under John Major in the 1990s, they tried, though failed, to make it a criminal activity. Squatting is currently a civil offence, which places it on a par with speeding or forcing someone into a marriage – not deemed offences against society, but a dispute between two individuals. Breaking and entering a property is a crime, but if you happen to try a door, and it happens to open, no crime has been committed.

For the property owner, this means squatters can be an expensive headache, but making criminals of them would be a step too far, believes John McDonnell, Labour MP for Hayes and Harlington. Earlier this month, he launched Squash, a campaign to oppose Clarke's plans, along with Paul Palmer, an empty-property consultant. "Squatters tend to occupy long-term empties often owned by absentee property speculators registered in offshore tax havens," says Palmer. "To criminalise squatting would protect only one set of people: the greedy and the powerful who can afford to keep property empty."

The protagonists in these stories are often portrayed by each side either as heartless developers or crack addicts. The truth is, naturally, far more nuanced. "Just as some journalists tap people's phones, some squatters give the rest a bad reputation," says Brogan. "In general, squatters don't have an interest in smashing up a property, because they're going to live there. The people who smash up properties are the owners, who don't want it to be squatted."

Even the best-intentioned can, however, cause distress to home owners. Peter Nahum is a 61-year-old art dealer, and a former presenter on the BBC's Antiques Roadshow. Last summer he bought a Georgian townhouse on Bloomsbury Square in central London, which had been an office for years. He and his wife hoped to convert it back to a private home, and had just begun building work when they discovered it had been occupied by the Really Free School. Unlike the film director Guy Ritchie, who also had a house occupied by the group, Nahum had bought the house to be his sole home, after years of renting. It's ironic that, like Brogan and many other squatters, he too was trying to escape London's punishing rental market.

"They said they wanted to negotiate with us," he laughs when we meet, recalling the day he found the squatters. "I said the only negotiation was, please could they get out of my house." The law states that, after finding squatters, the owner has four weeks to take out a court order to make them leave, at a cost of £3,000. "Which is fine if you're a big property company," says Nahum, "Or you can take the slow route, which is much cheaper, but it could take three or four months." He spent two weeks getting to know the squatters over coffee, and his negotiations eventually paid off. "Unlike my wife, who started roundly abusing them,I decided they were well-meaning kids, and I'd treat them with respect. I said, 'You can either cost me £3,000 and get out, or you can just get out; either way you're going to be out in three weeks,' so they agreed to get out. I also said the panelling dated from 1740, please don't graffiti over it. But they were a free school. They had already painted a blackboard."

Nahum speaks fondly of the "essentially middle-class kids" with whom he is still in touch, but he dismisses their ideologies as half-baked. "I spent my life working and saving to reach a moment where I could buy this house. Then they come in and write slogans on the wall like 'Unemployment for all (not just the rich)'."

Somewhere between Nahum and the Really Free School lies a compromise. There is a housing shortage, and there are empty homes. And this is where Camelot comes in. Camelot is an agency specialising in vacant-property management; it brings together owners of empty buildings and people seeking cheap housing, and forges a mutually beneficial union. It carefully selects tenants, often choosing key workers. For it's not just artists who squat.

Jada, a 24-year-old decorator and construction labourer, was sleeping on the floor of his mother's flat when some friends invited him to join their squat, a disused bowling clubhouse in Balham, two years ago. "At first, we wondered why the owners hadn't tried to evict us," he says. "They bought this plot to develop; it's worth a fortune, and they wanted to build flats on the bowling green."

Since moving in, Jada and his friends have carried out extensive improvements, clearing chimneys, fixing the roof and keeping it warm and dry. In fact, they have been ideal tenants, at least as far as the neighbours are concerned. "It turns out that the owners let us stay because they thought having squatters here would anger the neighbours," says Jada. "They thought the neighbours would rather have the flats than squatters. But they were wrong – the neighbours all overlook the bowling green, so they rejected all the applications to build flats. They would much rather have us here instead."

The make-it-work squatter

Hannele Hiltunen, 26

Originally from Finland, Hiltunen has been squatting in Balham Bowling Green Clubhouse since graduating from Roehampton University in 2009

"I moved into the clubhouse in July 2009, so I've been there nearly two years. I live with Jada, who's a building-site labourer; Richard, who's a carpenter; and Emma, an independent film-maker. I'm kind of enjoying the free life. My main activity is squatting – it takes up a surprising amount of time – but I am looking for work.

"We have no electricity and when our water was cut off in October, it raised a lot of concern as to how we could deal with the situation. We discovered we could collect rainwater from the roof to wash in and buy bottled for drinking and cooking. The fireplace only warms up so much of the room, which makes sleeping very difficult. The neighbours are quite friendly; the guy who lives on the corner here used to be a squatter himself.

"I'm very happy here. I plan to stay indefinitely. But with squatting there is always a chance of getting evicted. I understand that a successful planning application takes eight weeks to clear, so you still have two months to move. I think they are putting in another application this year, so this could be our last summer."

The owner

Peter Nahum, 61

An art dealer, Nahum bought a townhouse in Bloomsbury last summer, which he is still renovating. It was occupied by the Really Free School for three weeks in January

"We were lucky with the squatters we got. They were essentially nice, middle-class kids, who would go and wash at friends' flats nearby. But they were completely insensitive to anybody else's time, values or problems.

"They cost me a lot of money, and I had to spend three weeks having coffee with them, persuading them to leave. Luckily I had the time to do it. And they do do quite interesting things. But why have a free school in central London? Why not go to the poorer districts if you want to educate people?

"Their claims that they're doing it as property prices are too high is nonsense. They wouldn't be able to afford a property even if it was 57p. They squat because it's fun.

"One of their proverbs on the walls said, 'Unemployment for all (not just the rich)'. Well, if nobody did any work, who would support them? These people live off a system. If there wasn't a system, what would they live off? They'd have to get their hands dirty like everybody else. Just as I did for 40 years, which enabled me to save the money to buy an incredibly beautiful house."

The artist squatter

Catherine Brogan, 26

A poet originally from Omagh, Northern Ireland, Brogan has squatted in London for more than three years

"Squatting is the perfect example of the Big Society. It's about people taking matters into their own hands, looking after their own, and getting together in groups and putting on events that are of benefit to the whole community. They're not relying on the state to survive. In fact, they're saving the Government money by not signing on and claiming housing benefit.

"People leave properties empty because to them it's money in the bank. It's why rents are so high in London. Think how hard it is to get a flat. The demand is so great that you have to just take whatever you can get. Empty properties drive up the prices for everybody else.

"Squatting can help regenerate an area. Look at Dalston [in east London]: it used to be the dodgiest place and nobody would want to live there. Then people started squatting and it became cool. The same happened with Shoreditch.

"If people aren't living in an empty building, it's more likely to be vandalised. Whereas if you have squatters in, they're likely to secure it. A lot of squatters work. They have their own lives but just want to live somewhere, they just need a house."

The invited squatter

Charlie Billingham, 26

A Royal Academy student, Billingham lived in a privately rented office in Walthamstow at a knock-down rate for two years, before moving out in 2010

"A group of businessmen had taken out a long lease on this office building but weren't using it, so they advertised it on Gumtree at a knock-down rate. We were on the second floor above a gym and a college.

"Our presence was a benefit for them, as they'd had squatter problems before. It ended up being cheaper than renting a flat or house, but we had the space, and didn't have to pay council tax, electricity or gas bills.

"The council aren't very happy about people living in non-residential spaces, partly because of the council tax, and also they worry about fire safety. If the fire brigade don't think there's anyone sleeping there, it's classed as a different kind of risk. It's not that we were opposed to paying council tax, we just weren't asked to.

"There was an art studio at the end and quite a lot of people worked in theatre, and used the main room as a rehearsal space. We built a cinema by painting a screen, putting in a projector and a curtain. Then we got pallets and made tiers with sofas up towards the back.

"It was a lot of fun, there was a lot of space, and we had some big parties."

The protest squatter

Kate Connelly, 21

A student and prominent campaigner at the University of Glasgow, Connelly is one of several activists who have occupied the recently closed Hetherington Research Club for 100 days, in protest against the education cuts being imposed by the Government. She has been arrested twice and charged with one count of obstruction

"The Hetherington Research postgraduate club was closed down a year ago by management. The postgrads haven't really had a space on campus since and we're trying to have this space restored as their union.

"Now it's an educational space where you can get informed about the cuts. We've had a couple of great lecturers come down, we've had yoga workshops, life-drawing classes, arts workshops, we've been showing films for children every Sunday afternoon.

"The police and university tried to evict us on the 50th day. I was pushed down a fire escape and sustained a concussion, so when I was arrested, I had to go to hospital. We now have an email sent by management the day after the botched eviction, saying that they're permitting us to stay here, 'pending negotiations'.

"[Scotland's First Minister] Alex Salmond has openly condemned the way the university is dealing with the protests."

The revolutionary squatter

Belkhasem Alghiryani, 35

Since 9 March, Alghiryani and his group of Libyan exiles have occupied Saif Gaddafi's house in Hampstead Garden Suburb in north London, claiming squatters' rights in the name of the Libyan revolution

"We are here not for personal gain. I've got my own flat and I pay my rent, as do all the guys. We are Libyan and we did it to show our people and the world what Saif Gaddafi did with our money. He's always saying, 'I don't have anything, I'm a normal person like you, I'm a nomad,' but he has houses all over the place. This house is worth £11m; it could build four or five schools in Libya, at least one big hospital, which they don't have.

"When Gaddafi falls and the Libyan people can vote for a government they are satisfied with, we will hand this house over. But the new government cannot just run away with it, because we know they have a house here and we'll keep asking what they did with it.

"The police have visited us twice and realise we are not here to do any damage. We have to keep 24-hour security, as Saif might have connections here. We saw a Range Rover with a Libyan number plate. And a man came to the door offering us £40,000 to leave. I asked him questions in Libyan, but he replied in English."

Interviews By George Binning & Matthew Bell