Christmas without a home

By Heather Cameron

Last week saw George Clooney launch a campaign to feed the homeless at Christmas by donating the first £5.

When visiting Edinburgh’s branch of Scotland’s not-for-profit sandwich shop, Social Bite, last month, Clooney filmed a video clip on a staff member’s phone in which he pledged the first £5 donation to Social Bite’s £5 Christmas dinner appeal.

First Minister Nicola Sturgeon, Olympic star Sir Chris Hoy, Labour leader Jeremy Corbyn, comedian Rob Brydon, broadcaster Chris Evans, and Scotland football manager Gordon Strachan have also pledged their support.

Last year’s campaign raised enough money to buy 36,000 meals to feed homeless people in Glasgow, Edinburgh and Aberdeen for the whole year. Just 24 hours after Clooney’s initial donation, £165,000 was raised with over 33,000 people donating.

How many homeless?

Considering that Scottish local authorities logged 35,764 statutory homelessness assessments in 2014/15, of which 28,615 were assessed as ‘legally homeless’, this figure is impressive.

Nevertheless, the actual number of homeless people is likely to be far greater.

The latest data for Scotland suggests that 50,000 adults experience homelessness each year.

Shelter has estimated that 109,000 children in Britain will be homeless this Christmas, with nearly 5,000 of them in Scotland. According to the Scottish arm of charity, this is a 15% increase on last year’s figure, which:

“is simply not good enough and a badge of shame for such a relatively wealthy country”…The increased number of homeless children indicates a growing bottleneck of families stuck in temporary accommodation due to the major shortage of affordable housing across Scotland.”

upset boy against a wall

Government figures show that the number of people in temporary accommodation has grown over the past five years despite more than £1bn being spent on homelessness since 2010.

And these figures don’t include the hidden homeless that evade official statistics. According to Crisis, “official homelessness figures are masking the true scale of the problem”.

People living in overcrowded accommodation, shared accommodation, young single people and those in ‘concealed households’ (including groups/families/single people who are unable to form separate households and forced to live with others) can all be hidden from the system. And as local authorities only have to accommodate ‘statutory’ homeless people, these people are often hidden from support and advice as well as statistics.

Positive practice

As Social Bite’s Christmas dinner campaign shows though, good work is being done. Many homeless charities work tirelessly across the UK to provide services for people at Christmas time and indeed throughout the year.

The Salvation Army provides support and friendship to the homeless and other vulnerable people and its Christmas appeal for donations of time, money and gifts has seen much success over the years.

Crisis runs their Crisis at Christmas event across the country providing hot meals, fun activities, entertainment, health care and advice for the homeless. This year they have Christmas centres in Birmingham, Coventry, Edinburgh, London and Newcastle.

A new community initiative led by students at Darlington College aims to give homeless people in the town a Christmas lunch at the college, a cooking demonstration and festive meal at a local restaurant.

And as well as providing dinners for homeless people in Scotland, Social Bite will also be using donations to provide food and clothing packs for refugees in camps in Calais, the Serbia/Croatia border, and Lesbos.

Final thoughts

With the sheer scale and complexity of the issue, of course it won’t be possible for such initiatives to reach every homeless person. And with the combination of cuts to welfare and a severe lack of affordable housing across the UK, many more families are likely to face a fight to keep roofs over their heads.

So while we settle down to enjoy the festive period with our nearest and dearest, perhaps we should all spare a thought for those who simply seek the gift of shelter.


Further reading: if you liked this blog post, you might also want to read our previous blog on Britain’s hidden homeless. 

Our popular Ask-a-Researcher enquiry service is one aspect of the Idox Information Service, which we provide to members in organisations across the UK to keep them informed on the latest research and evidence on public and social policy issues. To find out more on how to become a member, get in touch.

Follow us on Twitter to see what developments in policy and practice are interesting our research team.

Support for the squeezed middle: could public subsidies tackle London’s housing crisis?

apartment building in Nottingham UK

A new report from the Centre for London has highlighted the potential of intermediate housing in supporting Londoners on middle incomes.

The report – Fair to Middling – argues that not only could publicly-subsidised housing help those on modest incomes in London find better places to live, but could play a vital role in ensuring that the capital retains the school teachers, bus drivers, chefs, nurses and other workers it needs to sustain its economy.

Chaired by the leader of Haringey Council, the Commission on Intermediate Housing was set up by the Centre for London to investigate the strengths and weaknesses of current housing policies with respect to those on middle incomes. Its latest report builds on a 2014 analysis, which found that house prices, rents, transport, energy and childcare costs were substantially higher in London than in the rest of the UK.

The new report paints a stark picture of London’s housing crisis. The Commission selected six households on modest incomes and charted the relationship between their earnings and house prices in four London boroughs. Among its findings:

  • Kensington and Chelsea is now unaffordable for all the selected households, and has been unaffordable for all but one of the households for the entire period covered;
  • Only the two highest earning households – a doctor, and a solicitor/journalist – can now afford to live in Haringey, but they will be priced out of the market in 2016 on present trends;
  • On present trends, both the nurse and the teacher households will find London unaffordable in two years, while the electrician household will only be able to afford Barking and Dagenham, and Enfield.

The authors warn that, unless action is taken to support the people it depends on to keep the city going, the consequences could be widespread and severe:

“Rising housing prices will inevitably squeeze these people out of the city or harm productivity in other ways – long commutes and unstable and overcrowded accommodation eventually affect performance.”

The benefits of intermediate housing
Fair to Middling makes the case for public subsidised housing in London, arguing that intermediate housing can:

  • help make housing more affordable for low-to-middle income earners;
  • keep London competitive and boost its economic success;
  • foster mixed income and stable communities.

Options for the future
The report describes overall supply of intermediate housing in London as “lamentably small”, amounting to less than 2% of the capital’s housing stock. Shared ownership – the most common type of intermediate housing – is, according to the Commission, an unfamiliar and complex product, and in the most expensive parts of London it is completely unaffordable.

The report suggests that intermediate rent offers the best deal to housing providers and investors.

“Local authorities and other housing providers should make appropriate use of intermediate rent products as well as those offering a route towards low cost home ownership. Intermediate rent policies should be offered at a range of levels to meet the needs of different types of household and households confronting expensive locations.”

The report also identifies examples of employers, such as universities, helping their staff secure affordable housing. It suggests that an employer-backed shared ownership scheme could help employees buy a share in a home that they otherwise could not afford, and help the employer attract and retain valuable workers while making a good return on its investment.

The Commission’s findings offer another reminder that, while solving the housing crisis won’t be easy, failing to tackle the problem risks creating challenges that may be much harder to overcome.

Follow us on Twitter to see what developments in policy and practice are interesting our research team.

Starter Homes: affordable housing at an unaffordable cost?

By James Carson

A report from homelessness charity Shelter has suggested that one of the UK government’s key affordable homes initiatives will be out of reach for many people on average incomes.

The ‘Starter Homes’ initiative was launched in December 2014, offering first time buyers under the age of 40 in England a discount of up to 20% off the normal price of new homes built on brownfield land. During the general election campaign, David Cameron promised that by 2020 200,000 Starter Homes would be built by private builders and sold for no more than £450,000 in London and £250,000 in the rest of England.

The government has claimed that first-time buyers paying an average of £218,000 for a home would save £43,000 under the Starter Homes scheme.

However, analysis of the programme by Shelter suggests that it will not help the majority of people on the new National Living Wage or average wages into home-ownership in England by 2020.

Cheaper homes but not cheap enough

Shelter looked at three typical household formations in each local authority in England earning a range of different salaries to assess whether they were likely to be able to afford to buy a Starter Home. The study found that:

  • Starter Homes for families earning average wages will be unaffordable in over half of local authorities across England in 2020.
  • Families on the National Living Wage will only be able to afford a Starter Home in 2% of local authorities.
  • Single people on low or average wages will struggle to afford a Starter Home in 2020 in the majority of local authorities.
  • London, the South East and the East have the lowest number of areas where affordable Starter Homes under the schemes threshold could be built, despite high demand in these areas.

The scheme is being funded by changes to the planning system, exempting developers from their obligations to include affordable housing in building schemes. The government says that these ‘Section 106’ obligations typically add £15,000 to the cost of each new home being built.

However, even before its latest analysis, Shelter was expressing concerns that the removal of these requirements would lead to Starter Homes ‘cannibalising’ genuinely affordable housing. There are also questions about whether the homes will come with the necessary infrastructure in place.

Government pressing ahead

Nevertheless, the government is pressing ahead with the programme and extending its scope. In August, chancellor George Osborne announced that the Starter Homes scheme would be extended to some villages as part of the government’s rural productivity plan. At the same time, some of England’s major house builders have pledged their support for the scheme, including Barratt, Cala and Taylor Wimpey.

Even if it meets the target of 200,000 new homes by 2020, the Starter Homes scheme on its own will not solve the national housing shortage. Around 250,000 homes need to be built each year to keep up with demand, but in 2014 fewer than 119,000 homes were built in England. As the Shelter report concludes, the Starter Homes programme is no silver bullet for the housing crisis:

“Starter Homes would primarily help those on very high salaries or couples without children, but they are not a good replacement for other forms of affordable housing and will not help the majority of people on average wages struggling to get an affordable, decent home. The government needs to look very closely at this policy before going down the wrong track.”


Follow us on Twitter to see what developments in public and social policy are interesting our research team.

The Idox Information Service can give you access to a wealth of further information on housing; to find out more on how to become a member, contact us.

Further reading*

The home front (interview with Brandon Lewis outlining plans for housing)

Building to order (development on brownfield sites)

A living countryside: responding to the challenges of providing affordable rural housing (CPRE Housing foresight paper no 5)

Housing summary measures analysis

Tackling our housing crisis: why building more houses will not solve the problem

*Some resources may only be available to members of the Idox Information Service

“Generation Rent” – are there lessons from Germany?

Berlin Housing (Photograph: James Carson)

Berlin Housing (Photograph: James Carson)

By James Carson

Could a lower level of home ownership in the UK become the new normal? That’s one of the questions arising from a recent Halifax report  that examined perceptions and changes in the first-time buyer market.  Although there has been an increase in the number of first-time buyers in the past five years, the report identified a growing number of people aged 20-45 who do not believe they will ever own their own home.

The authors concluded that if this trend continues the UK could be moving closer to the German housing model, where renting is the norm.

While about 60% of Britons live in owner-occupied accommodation, barely half of Germans own their own home (the lowest proportion in Europe). A number of factors explain the enduring preference for renting in Germany :

  • A good supply of high quality rental accommodation from housing associations and municipal authorities;
  • Rents are transparent and tightly controlled, and tenants enjoy substantial rights and protection from bad landlords;
  • Lending requirements have been traditionally more stringent than in the UK, and there is less of a borrowing culture in Germany;
  • German house prices have shown lower levels of growth and volatility.

In recent years, there have been some signs of a shift towards home ownership in the German market, particularly in Berlin. But, having looked on with disquiet at the fallout from property crashes in the rest of Europe, many Germans remain suspicious of booming housing markets. In Germany, renting is still seen as a perfectly respectable alternative to home ownership.

Could that happen here? Prohibitive deposits, high property prices and low incomes are preventing many people getting a foot on the property ladder. Faced with a shrinking social housing market, they are increasingly turning to the private rented sector (PRS), which now forms the second largest form of tenure in England (18% of the total households).

The Halifax report suggests that the German model is not unattractive, but also warned that a shift away from home ownership means problems in the UK’s PRS need to be addressed.

These issues were detailed in another recent report, from the Just Fair Consortium. Among its findings:

  •  33% of PRS dwellings do not meet basic standards of health, safety and habitability;
  • Tenants are afraid to complain about the poor quality of properties for fear of retaliatory evictions or arbitrary rent rises;
  • The cost of PRS housing is almost double that of social housing, and private tenants are increasingly unable to meet the costs.

The report’s authors noted that, while the rise of the PRS has been characterised by the government as a positive development, this has not been the experience for everyone:

“The UK government has increasingly presented the PRS’s expansion as based on lifestyle choice, and as a form of tenure suited to greater labour market mobility and flexibility. While this may be the case for some economically empowered renters, the overall context of private rentals suggests that the sector provides housing for a number of households, particularly families, for whom a private rental home is a source of anxiety over tenure security, cost, habitability, and quality, rather than a sought-after choice.”

The problems associated with the PRS in the UK may be contributing to a reluctance to rent. But if there were improvements to security of tenure, quality and affordability, the PRS might appear a more attractive option. Danny Dorling, professor of human geography at Oxford University, recently contrasted the UK’s rented sector with the situation in Germany:

“In Germany tenants cannot be evicted on a whim. Often landlords have to bribe them out if they want control of the property back before the agreed date. Property is of good quality, well soundproofed, spacious and well insulated. Pension companies often hold it, so you know where your rent is going: it is paying for your parents’ generation’s old age.”

If Generation Rent is here to stay, this has implications for the private property market, for the social and private housing sectors, for planning and economic development, to say nothing of the social impact. The UK is unlikely to return to mass private renting any time soon, but if current trends continue, perhaps there are lessons to be learned from the German model.


The Idox Information Service can give you access to a wealth of further information on housing; to find out more on how to become a member, contact us.

Further reading*

Rent increase (Britain’s housing tenure landscape)

The future of London’s private rented sector

Resilient? (social housing in Scotland)

Ownership status, symbolic traits, and housing association attractiveness: evidence from the German residential market

Making a rental property home

*Some resources may only be available to members of the Idox Information Service

Out of sight, out of mind? Britain’s hidden homeless

“It was one mate’s floor one night, another mate’s sofa the next night. There’s so much pressure not to let people know how bad your situation is, but deep down, you’re absolutely falling apart.”

In February, the latest Homelessness Monitor was published by the Joseph Rowntree Foundation (JRF) and the homelessness charity Crisis. Official estimates of rough sleeper numbers in England in 2013 were reported to have reached 2,414, a 37% rise since 2010.

But the authors suggested that the true figure could be at least four times that number because of a category of homeless people who rarely make it into the official statistics. These are the ‘hidden homeless’: people living in bed-and-breakfasts, in overcrowded squats, and hostels, on the floors and sofas of friends and family, and sometimes sleeping rough in the unlikeliest of locations. Often, they fall short of getting help from their local authority because they have been assessed as intentionally homeless, or they are not considered as priorities.

The problem is not a new one. But the Homelessness Monitor also indicated that today’s hidden homeless includes higher numbers of families, single and separated people, women and young people.

Any one of us could find ourselves in this position. It might take a breakdown in mental health, or the sudden impact of a job loss, a broken relationship, a rise in rent. In addition, changes to government housing benefit rules have meant people under-occupying accommodation are seeking smaller homes, substantially reducing the availability of one-bedroom social rented accommodation for single homeless people.

In 2012, a Department for Communities and Local Government evidence review of the costs of homelessness in England had difficulty in pinning down a definitive account of the financial costs to the government, or the opportunity costs to the rest of society. However, it did highlight the £345m spent by English local authorities on homelessness in 2010-11. Even though the hidden homeless may not be appearing on official figures, local councils are still providing tens of thousands of people with related support services, such as debt advice and family mediation.

The human costs of hidden homelessness are easier to identify. A ComRes poll last year found that one in five UK 16-25 year-olds had to stay with friends or extended family on floors or sofas in the previous twelve months because they had nowhere else to go.  Some were made homeless after they were evicted, others because of family relationship breakdown, and one in ten was forced to leave home due to domestic violence. Their chances of finding work, or sustaining their education will be greatly reduced.

Tackling the problem of hidden homelessness goes to the heart of a wider issue: the shortage of affordable housing. But it also means addressing the difficulties that can drive people from their homes.

Launching a 2014 report into homelessness among women, Alexia Murphy, head of the St Mungo’s women project, suggested that preventative solutions are achievable:

“An ‘easy win’ is to build better bridges between GPs and social services. Before women become homeless, they are often presenting to health professionals with headaches, depression and stress – but the root cause here is usually social.”

However, the problem also needs resources, and although there are government initiatives and support services to tackle homelessness among vulnerable people, housing campaigners believe more should be done.

In 2004, Shelter published a report highlighting the plight of the hidden homeless, and proposed 17 solutions to the problem. Ten years later, another report, from IPPR North , indicated that things were no better:

“Homeless households living in unsupported temporary accommodation represent a hidden social problem. It is absent from official statistics, and the acute and complex problems associated with such households are left unrecorded. This cannot continue”

Meanwhile, the voices of the hidden homeless, such as the one which opened this blog post are still struggling to be heard.

“If you’ve got nowhere to call home you’re always uncomfortable, always unsettled, you’re not safe.”


The Idox Information Service can give you access to a wealth of further information on housing policy issues. To find out more on how to become a member, contact us.

Further recent reading*

Addressing complex needs: improving services for vulnerable homeless people

Search for a home (homelessness in England)

Getting the house in order: keeping homeless older teenagers safe

Not home: the lives of hidden homeless households in unsupported temporary accommodation in England

Homelessness in Scotland 2014: getting behind the statistics

*Some resources may only be available to members of the Idox Information Service

Des res or deposit box? The impact of foreign investors on UK house prices

by James Carson

Foreign investment in UK property is an issue that’s been attracting increased media coverage, mainly because of claims that wealthy overseas investors are driving up property prices and locking millions of UK citizens out of the housing market.

Properties in central London are attracting the lion’s share of this foreign investment, primarily from Asia, Russia and the Middle East. Last year, the Civitas think tank reported that 85% of prime London property purchases in 2012 were made with overseas money.

The Civitas report highlighted concerns that, as well as driving up prices for domestic buyers, overseas investments might be distorting house-building priorities by persuading developers to focus on wealthier buyers, rather than affordable housing. Civitas argued that the UK should follow Australia’s lead in preventing non-residents from investing in residential property unless their investment adds to the housing stock.

Moves towards constraining inward investment have set alarm bells ringing for those who believe that it provides economic and social benefits to the UK, and delivers housing that would otherwise not be built. A report from London First in 2013 made the case for continued foreign investment:

“London is a – perhaps the – international business city. Its economic success, which delivers jobs and prosperity for Londoners and the country as a whole, has been built on international trade, in past centuries primarily in goods and now principally in a range of services. If London is to continue to thrive the city must be open to housing those who come here to do business.”

While London continues to attract the bulk of foreign investment, there are signs that overseas buyers may be starting to look beyond the UK capital. One estate agent told The Daily Telegraph that international investment in Edinburgh’s residential market was increasing “at a phenomenal rate”. The article went on to highlight the city’s pulling power for overseas investors:

“It’s largely down to the schools, which are the main attraction. Russian buyers are sending their children to Merchiston Castle School, George Watson’s College and Edinburgh Academy. We have also seen an increase in Chinese buyers, who are attracted to Edinburgh for the freehold properties.”

Some observers have sensed an undercurrent of xenophobia among the opponents of overseas property investment. Writing in The Guardian last month, Dave Hill observed:

There’s something discordant about the stress on the foreignness of those “rich foreign investors”. Would rich investors in London be alright if they weren’t foreign? Are foreign investors alright if they live in London, as many do? Are we not a “world city”, suddenly?

For others, such as Peter Wynne Rees, the former planning officer for the City of London Corporation, the real problem is an unresponsive planning regime:

“A residential development in central London is now likely to make four to six times more profit than an office scheme. Without planning control, much-needed offices have given way to piles of “safe-deposit boxes” rising across the capital. These towers, many of dubious architectural quality, are sold off-plan to the world’s “uber-rich”, as a repository for their spare and suspect capital.”

Rees was one of the contributors when the Greater London Assembly’s Housing Committee met to consider the issue of overseas inward investment in March.

The issue is likely to maintain its high profile up to and beyond the general election. Ed Balls, the shadow chancellor, has suggested that overseas owners with second homes in the UK could be forced to pay a larger contribution than people living in their only home. The Conservative Party rejects this approach, but in his 2014 Budget chancellor George Osborne extended stamp duty to include more wealthy foreigners who buy homes in Britain to avoid tax, and in December he increased stamp duty on house sales worth more than £1.5m. It appears that this, along with uncertainty over the election outcome, has begun to affect the market.

Underlying all of this is the shortage of affordable housing. In London, 809,000 new homes are needed by 2021 to meet existing and new demand. But while all sides agree that the best way to address house prices without damaging foreign investment is to build more homes, there is no consensus on how that can be achieved.


 

The Idox Information Service can give you access to a wealth of further information on planning and property development, to find out more on how to become a member, contact us.

Further reading

Some resources may only be available to members of the Idox Information Service.

48-hour flash sale (overseas exhibitions promoting UK properties)

Storms gather over London residential (foreign investment in London property)

A roadmap for the regions (property forecast for 2015)

Spotlight: the world in London – dynamics of a global city

Honey trapped (Russian investment in Britain)

Empty homes … Britain’s wasted resource

Boarded up homes in Kensington, Liverpool. Image by Mikey via Creative Commons.

Boarded up homes in Kensington, Liverpool. Image by Mikey via Creative Commons.

By Heather Cameron

Government statistics indicate that there are just over 635,000 empty properties in England, with a third lying empty for six months or more. In Scotland, there are around 23,000 ‘long-term’ empty homes (unoccupied for six months or more) that are liable for Council Tax.

With increasing house prices and a continuing rise in homelessness, the demand for affordable homes in the UK is unlikely to subside. And with new housebuilding unable to keep up with demand, bringing empty properties back into use would seem an obvious solution that could go some way to easing the housing crisis as well as addressing the blight caused to local communities by empty properties.

Unsightliness, loss of amenity, anti-social behaviour, pest infestations, the devaluing of neighbouring properties and a negative impact on people’s health have all been cited as potential outcomes of empty homes.

However, while the government claims to be committed to reducing the number of empty homes, recent welfare reforms appear to contradict such intentions.

A recent Inside Housing article on empty homes in County Durham, suggested that the bedroom tax has had a direct impact on the increasing number of vacant properties in the area, with many landlords seeing an increase in the number of voids following its introduction. Single people used to be housed in two-bedroom properties (which make up the majority of the empty properties in the area), but this is no longer an option as the bedroom tax cuts the housing benefit of people under-occupying by up to 25%.

This has also had a knock-on effect on the costs to social landlords due to maintaining vacant properties. Local housing association, Accent, estimates that its vacant homes are costing it £600,000 per year due to costs like council tax and security.

Tackling the issue

Despite recognition of the problem, powers to help bring empty homes back into use have seemingly been underused by English councils. Empty Dwelling Management Orders (EDMOs) were only used 17 times in 2014, with councils preferring to use other powers such as council tax charging and compulsory purchase orders, despite EDMOs being specifically designed for the purpose.

A spokesperson from the Local Government Association (LGA) suggests that “the existing powers open to councils are complex and difficult to use. The government should simplify existing powers to support local authorities to bring empty properties back into use.”

In a report at the end of December 2014, the Institute for Public Policy Research (IPPR) has similarly argued that local authorities should be offered an enhanced set of powers to address the problem of empty homes. It recommends two changes to the current rules:

  • The existing cap on the ’empty homes council tax premium’ should be removed, effectively allowing local authorities to determine their own banded premiums charged on long-term empty dwellings.
  • Local authorities should be allowed greater discretion to tax long-term empty dwellings appropriately, and to ensure that those holding on to an empty property contribute more to the economic costs of providing housing for those in need.

Indeed, councils have previously called for the compulsory purchase order system to be simplified to bring empty homes back into use so perhaps such changes would make a difference.

Good practice

There are recent examples of good practice in reinstating empty homes through various approaches, such as homesteading, refurbishing and leasing, and repairing and selling.

Stoke-on-Trent City Council, for example, bid for funding from the Clusters of Empty Homes Fund so that it could renovate 124 long-term empty properties and bring them back into use.  The redeveloped properties were offered for £1 each to carefully selected buyers who had shown they would be actively engaged in the area’s regeneration.

According to the council’s Director of People, this initiative has resulted in the restoration of local pride and a new-found sense of community ownership that will drive lasting improvements.


Further reading

Some resources may only be available to Idox Information Service members.

Playing ‘house’ (redevelopment of empty homes), IN MJ, 15 Jan 2015, p21

Tackling the housing crisis: alternatives to declining standards, displacement and dispossession (2014) Centre for Labour and Social Studies

Re-imagining regeneration: empty and difficult to let homes (2014) National Housing Federation

Landlords revise threat of universal credit after delays, IN Inside Housing, 5 Dec 2014, pp10-11

Broken market, broken dreams: let’s end the housing crisis within a generation (2014) National Housing Federation

Ideas for change: community-led self-help housing, IN New Start, No 526 Nov 2014, pp1-7

Filling the void (Helena Partnerships and the private rental market), IN Inside Housing, 24 Oct 2014, pp28-30

Cutting back on waste (bringing empty homes back into use), IN Property Journal, May/Jun 2014, pp44-45

Evaluation of the Empty Homes Community Grants Programme (EHCGP): Midlands region (2014) University of Birmingham

The Autumn Statement 2014

Pound coin

By Alex Thomas

Chancellor George Osborne’s 2014 Autumn Statement was delivered at 12.30 GMT today in the House of Commons. The Autumn Statement is an opportunity for the Chancellor to update MPs on the Government’s plans for the economy based on the latest forecasts from the Independent Officer for Budget Responsibility (OBR).

As many predicted the chancellor committed to further tightening public finances within the statement. He went on to say that if the Conservatives remain in government after the May General Election there will be substantial savings in public spending. Continue reading

What’s all the fuss about housing affordability?

brightly painted housesBy Brelda Baum

In the Radio Times Magazine last Sunday, I read about a TV programme called ‘How rich are you?‘. This Channel 4 offering set out to examine the polarisation of wealth in the UK. Having watched the programme, I’ve become more aware that wage distribution has experienced dramatic changes over the last three decades and the majority of earners have become poorer in relative terms. It seems that our wealth gap is the widest in Europe and, to quote from a Richard Bacon article in the same magazine, on the subject:

‘…the richest 10% has more than 100 times the wealth of the poorest 10%; and Britain is the only G7 country where wealth inequality has grown since the start of the 21st century. It seems that ‘the rich are getting richer’… and ‘if you’re born into the bottom 10%, your chances of getting into the top 10% are between 3% and 6%’. 

This scenario clearly links with very real concerns about inequality and affordability. Put simply and in stark terms, if our major Smart Cities and towns become ‘unaffordable’ for the ordinary person, if he/she cannot afford to live in such urban areas, who is going to drive that train or bus? Take care of our health and social care needs? Who is going to collect our rubbish? The links between affordability and the likelihood of future localised labour market shortages goes on and on. For example, it’s been estimated that the economic output of London could reduce by £1 billion per year with a cumulative cost of £85 billion by 2025, due to the capital’s failure to provide suitable housing for core workers – including young, highly skilled, affluent renters.

Of particular interest is the use of the terms ‘affordable’ and ‘affordability’ within the housing context and how the impacts of affordability (or lack of affordability) spill over into a range of other social areas, such as poverty, health, education, wellbeing, and food choice. But what is meant by affordable/affordability?

The Oxford English Dictionary defines affordability as ‘The quality of being affordable; inexpensiveness’ and the adjective ‘affordable’ is described as something ‘That can be afforded (in various senses); inexpensive, reasonably priced’. The key terms here are surely inexpensiveness and reasonably priced.

A definition set out in ‘Affordable Housing and the Labour Market in Scotland‘ provided the following measures of affordability:

A household is considered likely to be able to afford a home that costs 3.5 times the gross household income for a single earner household, or 2.9 times the household income for dual income households. A household should be taken as being able to afford market housing in cases where the rent payable would constitute no more than 25 per cent of their gross household income’.

The Scottish Government defines affordable housing in the Scottish Planning Policy as ‘as housing of a reasonable quality that is affordable to people on modest incomes’. It indicates that ‘in some places the market provides some or all of the affordable housing needed, while in other places it will be necessary to make housing available at a cost below market value to meet an identified need. And that a range of tenure types can contribute to affordable housing, including social rented, subsidised low-cost sale, shared ownership and shared equity; plus unsubsidised low cost housing, mid-market or intermediate rented’.

According to a 2011 Shelter report, ‘the threshold of affordable housing costs … is at between 25% and 35% of net household income’. It also suggests that rents and service charges should cost no more than 30% of net household income. For example if a median average private rent for a two bedroom home takes up: 50% or more of median average full-time take home pay – it’s ‘extremely unaffordable’; at 40%-49% its ‘very unaffordable’; at 35%-39% its ‘fairly unaffordable’; at 30%-34% its ‘fairly affordable’; and at under 30% of take home pay, its ‘affordable’. Arguments for a ‘living wage’  continue to be voiced, and would go some way to address the affordability conundrum.

The Department for Communities and Local Government has developed a housing affordability model to consider the required levels of housing production, necessary to meet regional affordability targets.

Affordable rented housing is defined by the Homes and Communities Agency as ‘Rented housing provided by registered providers of social housing, that has the same characteristics as social rented housing except that it is outside the national rent regime, but is subject to other rent controls that require it to be offered to eligible households at a rent of up to 80% of local market rents.’

And in DCLG’s 2012 ‘National Planning Policy Framework’, affordable housing is defined as ‘social rented, affordable rented and intermediate housing, provided to eligible households whose needs are not met by the market. Eligibility is determined with regard to local incomes and local house prices. Affordable housing should include provisions to remain at an affordable price for future eligible households or for the subsidy to be recycled for alternative affordable housing provision.’

The focus of these definitions appears to be primarily on the relationship between income and housing costs (for purchase or rent). But there is also a need to consider wider affordability factors such as cost and quality of public transport, access to education, access to social and leisure facilities, and the range of local retail options etc. These are all considerations when making an affordability assessment of a neighbourhood, town or city and all need to be factored in when assessing the affordability of housing that is available.


 

Further reading

Florida’s planning requirements and affordability for low-income households

Housing and transport expenditure: socio-spatial indicators of affordability in Auckland

The Idox Information Service has a wealth of research reports, articles and case studies on a range of housing topics. Abstracts and access to subscription journal articles are only available to members.

How much affordable housing can developers support?

Kensington street

Dorothy Laing

In a recent planning appeal decision a developer’s plans were blocked by the Planning Inspectorate because they failed to provide sufficient funding for affordable housing. This decision is significant to both developers and local authorities and highlights the need for accurate viability assessments of the amount of affordable housing which a development can support. Continue reading