As the term ‘housing crisis’ becomes ingrained in the British lexicon and millions of people face uncertain futures, seven organisations suggest their solutions
Britain is in the midst of a housing crisis. The average house in the UK now costs £253,000 – more than nine times the average salary and 44.9 times higher than in 1971, when a typical house cost £5,632. To put that in context, according to the charity Shelter, if the price of everyday items had risen at the same rate of inflation, a dozen eggs would now cost £10.33 and a jar of instant coffee £33.69.
Yet house prices continue to rise. Data from the Office of National Statistics show that prices are rising at their fastest since June 2010, up 9.1 per cent in the year to February 2014. Prices in London are up 17.7 per cent, the biggest jump since July 2007. It’s no surprise people are struggling to get on the property ladder.
But cost is not the only factor involved. Inadequate housing stock means there simply are not enough homes to go around. There were some promising figures for 2013, when around 122,000 new homes were started according to government figures – the most since 2007 – but the number of completed house fell by five per cent compared to the previous 12 months, and this is against a need for 250,000 new homes to be built each year, according to experts.
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And of the homes we do have, not all are in use. In 2013, the total number of empty homes in England fell to the lowest level ever recorded, according to the independent charity Empty Homes. However, it estimates that 845,000 homes remain empty homes across the UK, 300,000 of which are long-term empty.
What or who is to blame for the situation? Some point fingers at Margaret Thatcher, who despite giving council tenants the right to buy their homes, did not allow councils to spend the proceeds on building more houses. Others lay the blame at the door of banks, which stopped lending to first-time buyers during the 2008 recession and are only now beginning to do so again. Buy-to-let landlords come under fire frequently, blamed for hoovering up stock before others can get a look in, while some media claim an influx of immigrants has resulted in too many people chasing too few homes.
But there are now 4.5 million people in housing need throughout the UK, so attributing blame is perhaps futile when this is a crisis which demands attention now. Here, key organisations outline what can be done, and what they are doing, to address Britain’s escalating housing problem.
All commentators now accept that we have an acute and deepening housing crisis. We have been undersupplying new homes for years.
In her seminal report on housing for the Labour government in 2003, economist Kate Barker suggested we needed to be building more than 200,000 homes year. We estimate that in the decade since, we have missed that by a total of more than a million homes. The implications are stark; 1.7 million families are on local authority housing waiting lists while first-time buyer numbers collapsed.
The main short-term problem has been a lack of affordable mortgage lending. People just cannot afford the deposits of £20 to £30k that have been required to secure a mortgage [the Council of Mortgage Lenders says the average deposit for a first-time buyer is between 17 and 19 per cent of the property value].
If people can’t buy, builders can’t build. In the longer term the planning system has been the biggest constraint with not enough land coming through for the number of homes we need.
The Help to Buy Equity Loan scheme is addressing the demand issue. It means people can buy a new build home with a five per cent deposit. Its extension to 2020, announced in the budget, gives housebuilders longer-term confidence and we are seeing big increases in house-building activity as a result.
The new localism based planning system [designed to give local communities more power over planning in their area] adopted by this government is starting to bed down. But government needs to ensure it monitors its effectiveness closely and adapts it where required as it still takes far too long to get planning permissions.
Delivering the homes we need will provide significant social and economic benefits. As we approach an election, it is vital all parties commit to policies that allow the increases in supply required.
More information: www.hbf.co.uk
Dot Dot Dot lets people who do great voluntary work live in houses that would otherwise be vacant, turning them from a burden into an asset. By doing this, we help everyone involved: providing a vital security service to property owners, giving our residents cheap accommodation and making a meaningful and measurable contribution to communities, as well as helping them to avoid the antisocial behaviour and crime which empty property attracts.
The shortage of secure, affordable, decent housing close to where people want to live and work might be the biggest problem facing communities in the UK today. If everyone has to work constantly just to pay the bills, they don’t have time to help their friends, family and neighbours, to give time to charitable projects or simply to enjoy life. We aim to relieve that pressure on the people we accommodate – letting them save money so that they can carve out more time and energy to help with worthwhile projects.
All of our residents live in London for between £35 and £70 a week – between a quarter and a third of what they’d pay to rent an equivalent property privately – and all give at least 16 hours a month to charitable projects, and in many cases far more. They are helping out with a huge range of good causes – from manning RNLI lifeboats to supporting survivors of domestic abuse; from mentoring kids from difficult backgrounds to befriending isolated older people. On top of that, they are great neighbours – keeping an eye out for those who live nearby and simply being friendly faces in corridors and on the streets.
Filling empty homes isn’t a whole solution to the housing crisis – we desperately need to build more places for people to live.
More information: www.dotdotdotproperty.com
“How can we turn the current crisis in private housing around?” invites the question. “What crisis?” For the wealthy retired there is no crisis. For many in that generation the housing market works. It has escalated in value over past decades thereby providing an asset, the profits from which can be realised for nursing home or social care costs, lifetime gifts to relatives, spent on themselves or finally passed on as inheritance. Increasing house prices have also allowed owners to borrow against their asset and gain access to the buy-to-let industry, thereby providing a comfortable retirement income on top of their pension.
But for first-time buyers, home-ownership is becoming an unaffordable aspiration, even for those lucky enough to have family help with deposits.
The issue also affects those consigned to renting. Lack of housing supply and ever-higher property values simply increase rents.
We need one million new homes, but a building programme on this scale takes time to plan and implement, so here are a few immediate fixes:
1. Get Britain moving: reward downsizers who move, with stamp duty holidays [where the cost of tax on home purchases is waived in certain circumstances].
2. Rein in the buy-to-letters: remove annual tax subsidies of £5 billion and ban interest-only buy-to-let mortgages.
3. Force land-bankers to build on or give up land.
4. Reform planning controls so affordable home building makes business sense to developers.
5. Share more: increase the rent-a-home tax allowance so it pays to share space.
More information: www.if.org.uk
In recognition that there is a real need and considerable scope for original and progressive thinking, a new model has been developed by the Hometown Foundation, a Scottish charity established by a small group of philanthropic businessmen. Owenstown is a pioneering proposal to address the housing crisis through the creation of a new settlement, or a series of settlements. The approach represents a holistic, exciting and practical evolution of the Garden City model [urban planning that creates self-contained communities surrounded by green belts], but then incorporates refreshed ideas from social reformers such as Robert Owen and contemporary cooperative theories, in order to make greater steps towards a better and fairer society. This recognises the value of ownership, horizontal democracy and active citizenship.
Unlike most conventional private and public sector led approaches, the proposal is to advance a local, democratic solution and to build a cooperative settlement, which will be self-contained, self-funded, self-governed, self-owned and built by popular consent. The aim is to build a community that is greater than the sum of its physical parts. That the new settlement will be developed and delivered without the need for any public sector support makes the model a viable answer to increasing housing demand.
More information: www.owenstown.org
Too many people in the UK are stuck in expensive, insecure and poor-quality housing. Many of them rent from private landlords – but now renters are fighting back. In London, there are now no fewer than nine private tenants groups organising locally, supporting each other and campaigning for better alternatives. Last year these groups set up a campaign called Let Down, highlighting the problems faced by people who rent from private landlords and demanding change.
At the moment, letting agents can get away with charging extortionate fees and discriminating against potential tenants if they receive housing benefit. They are also not properly regulated. We want the rest of the UK to follow the lead set by Scotland, which has outlawed fees for tenants, and aims to end to all discrimination. We’ve already seen some improvement in the way letting agents are regulated, but there’s still more to be done.
Two of the biggest issues we face are high rents and insecure tenancies. To tackle these, we are calling for the introduction of rent controls and secure tenancies for all tenants, whoever their landlord is. And since most of us would prefer not to be private tenants, we’re also calling for much more social housing, which is more affordable, better quality and more secure.
More information: www.letdown.org.uk
The housing market, like all markets, is governed by supply and demand. On supply, we can build more, though losing green spaces and the green belt affects health and quality of life. We can also build smaller, though smaller homes can lead to stress. However, it will always be difficult to satisfy continually rising demand. The UK population has risen by four million in the last ten years and this trend is forecast to continue.
England already has Europe’s highest population density. We are living longer and more people are living alone. We lead Europe in large family prevalence and a high birth rate and also have high net migration.
Reducing and reversing our population growth would relieve pressure on the housing market, as well as on transport, services and resources. We can do it in three ways. We can improve sex and relationship education and family planning services to reduce our high rate of unplanned pregnancies. We can promote the benefits of smaller families for individuals, society and the environment. And we can move back to the balanced migration position Britain has had throughout its history.
More information: www.populationmatters.org
A housing crisis is nothing less than a life crisis. I used to live in a private rental flat and it cost me almost every penny of my mindless full-time job to pay the rent on a home that never felt like mine. My social life was spent on a credit card. I’ve never been so depressed – and I was told I was lucky.
I now live at Sanford Walk Housing Co-operative, which gives me the two things that the private rental model never could: affordable secure housing and autonomous freedom in a home that feels like home.
I am no longer a cash cow for a landlord. Neither am I a forgotten council tenant. I am both tenant and member of a co-operative housing community. As a tenant I pay rent to the co-operative and, as a member, I help decide how we spend that money.
The co-operative is not just a model for housing, but a model for a flourishing home life. Most importantly, it works. Despite charging rents about half the market rate, we regularly have an annual surplus of more than £50,000. That’s money we can spend on ambitious projects to improve our lives and our community. Over the past ten years, members have built a high-capacity bike shed, reduced our carbon emissions by 60 per cent and created an orchard where there was once only wasteland.
We know that people are desperate to live in co-operatives: at Sanford, demand for rooms outstrips supply by about ten to one. Why, then, are there so few? In the UK, co-operatives make up just 0.1 per cent of the housing stock; in Sweden, the proportion is 17 per cent.
More information: www.sanfordcoop.org
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