Rewording housing

In this article I suggest that we should stop talking about ‘housing and starting using ‘homeing’ to describe how people live.

Housing. A word everyone uses. A familiar word. An everyday word. So familiar that we rarely stop to think about what it means. We all know what ‘housing’ is. But do we? Is it the right word for the modern world? The world of twenty-first century Britain.

My definition of housing is: accommodation in which people live. That does it for me. People live in accommodation, of various kinds. For a lot of people that means living in houses; but for an increasing number of people it does not. We all live in homes; some of those homes we make in houses. From that point of view, the whole idea is very simple. The problem I have with the word ‘housing’ is that it implies houses; living in properties that we think of as being houses. In fact, people live in all kinds of residential structures and units. Blocks of flats, caravans, boats, converted windmills, mobile homes, prefabs… there is a wide variety of things in which people have made their homes.

The word housing, to me, also implies status, ownership and tenure. Let’s stop, and  think what is known:

The property market is splitting Britain into two classes: Those rich enough to own their own homes, often outright; and those under 35, who pay twice the percentage of their incomes to rent in the private market. The split is new. Ten years ago, a majority of people under 35 owned homes, according to government data. Now, a majority under 35 rent. In fact, half of all renters in the UK are under 35.

Those are the words of journalist Jim Edwards, writing in The Guardian on 7th May this year. He talks about the ‘property market’ which is understandable and I have used to same term myself; it’s the collective known for man-made structures. Interesting to see his choice of words – that people who own their own homes are ‘rich.’ Not my choice of word. Wealthy or better-off perhaps, but rich? Behind the figures he refers to is the belief that rent forms a very high percentage of disposable incomes – for a lot of people.

More people than ever before are renting apartments from private landlords. In England we often call these ‘flats.’ Tenants tend to pay for a flat to live in on a monthly basis. A key datum is the ratio between rent and income; for some people, their rent takes up a high percentage of their monthly income.

‘…the average rental cost across the UK taking up 41 per cent of take-home pay, according to online letting agent Rentify.’

Reports the website This is money, in September 2015. Regional variations across the UK shows that the proportion of income swallowed up by rent varies between a third and a half. The proportion varies according to age group and to type of property; single people living in one-bedroom flats can pay a higher percentage and have to foot the rent bill alone.

There are an estimated 4.3 million tenants in the private rental market. Added to that there are people who live in what is called the ‘social’ market where their accommodation is owned by either the local authority or by a housing association.

For a high proportion of people the private rented sector is the default choice. These are people who cannot afford to buy their own houses. Statistics such as these obscure the diversity of the populating renting homes. Some of them are students. Some of them are transient migrants. Some of them are contractors who know they will need to move on after a few months. Some of them are young people who need to leave home and set up in a place of their own. A growing number of retired people are leaving their family houses and down-sizing to smaller units of accommodation but cannot obtained a mortgage because of their age.

The groups that concern me the most are those aged 25 to 35 who cannot afford a mortgage and older people, over retirement age, who cannot afford to keep a family home going just for themselves.

Figures like these get to the crux of the issue. People don’t live in houses any more. What people live in is a mixed economy of residential properties. This economy includes what has blandly become known as ‘social housing.’ I rejected this phrase when I said “All housing is social housing.” What I meant by that is that providing people with homes to live in is always a social function; not merely a commercial one. The distinction between private and social sectors is as artificial as it is obfuscation. Having a home to live in a social right and a social need. We don’t need to differentiate between the status of the property – by distinguishing between types of owners. A home is a home – who ever owns it and however they provide it to its occupants. If people live in it, then it is their home.

Almost half the adult in Britain these days live in rented apartments. And yet the government and politicians keep on talking about housing. Journalists keeping writing about the ‘housing crisis.’ We like to use words with which we are familiar; we like to think that familiar words will be understood by everyone.

The problem with the familiar word ‘housing’ is that it fixes our ideas; it formats our thinking in a certain way. It inhibits policymakers from thinking outside the box of everyday speech. We need to think differently about residential accommodation. The problem is: what word do we use that is short enough for everyday speech which means what we current mean by ‘housing’ but which does not just mean houses? Even in 2017, the kind of professionals who should know better, still see the private rented sector and its supply of apartments, as catering for temporary need. Just like the legislators of the 1980s did. But it’s not about short-term tenancies and temporary arrangements; it’s about permanent homes.

According to the website of lpcliving, in 2017,  just over half (51%) of private renters are under 35 years of age and 54% have no dependents, and so are unlikely to get social housing. Newspapers continue to wax lyrical about the increase in house prices – as though it was actually a good thing! In fact rising house prices is a two-edged sword – good for some but a disaster for others.

If we are to change the way that policies are made – about living accommodation – then the words used in those policies will have to change. The people who most need to start changing their choice of words, are politicians. They need to stop talking about housing as though it means only houses.

People in government, who control our lives, either limit or expand the choices we have available to us, permit or deny access to the resources we need to live ordered lives; they need to talk differently, change their dialogue, revise their mantras, re-gear their codes – about living. What people want these days are choices. They want to be able to choose where they live, what kind of property they live in, how they get access to that property, what they have to pay for it and how long it remains theirs to live in. They want to choose; to decide for themselves. They do not want to have choices forced on them by market circumstances.

People in government, policymakers, builders, landlords, local authorities – everyone needs to change the way they think about residential accommodation. The world is changing and our minds have to change to keep up with reality. In 1988 people talked about renting as being temporary. How times have changed! In the twenty-first century a large proportion of the British population has abandoned any hope of ever getting on the ladder of housing ownership. Renting a residential property is now the default for a substantial proportion of adults. This is why the law now needs to be updated. Politicians will be better able to deal with the current crisis in the provision of homes if they stop talking about ‘housing.’

More importantly, we must stop seeing the solution to the current crisis as lying with building. We cannot build our way out of this problem. Increasing the supply of newly built houses is not the way; too many people who need better homes simply cannot afford to buy them.

The sooner we stop talking about housing the sooner will be able to see solutions to the present problems. So what word should be using? It might be a neologism but my suggestion is to use the word ‘homeing’ – the supply of residential accommodation for people to live in. That changes the emphasis away from the type of property to the one things that all types have in common – being a home.

What people want is homes to live in; if they cannot afford to live in houses then they have to accept alternatives. If we start talking about homeing people then we can begin to think freely about the crisis that confronts us.

Trevor Locke, 12th May 2017.

3rd March 2017

Innovation in housing supply

England is not good at dealing with its housing crisis. The government has lacked imagination when it comes to thinking about how to deal with the under-supply of houses and what stands out about the response that it has been making is an almost complete lack of imagination.

Let’s looks at some of the ideas that could help to bring a quicker solution to the problem of meeting housing needs. Firstly, using imaginative methods to create places to live in.

Manufacturing prefabricated units at considerably less cost than building with bricks on site. Companies are already making living units in factories. These are transported in a nearly-finished form, put in place and services connected and all this can be done at considerably less cost than building houses with bricks and in less than half the time. Using modern materials and up to date methods of fabrication, the production of such units has already started and is proving to be successful.

Several British companies are now offering modular homes for as little as £80,000. Units of this kind are constructed to a high standard of energy efficiency, thus reducing their running costs. Because modern techniques and materials are being used in their manufacture, they can be tailored the needs of the clients. The key factor is that they can transported to site and finished very quickly. Sales of these unites have been good and the house-buying public as shown a real appetite for these innovative units.

Many of the units currently available require land; that can be a problem for many local areas where inner urban building land is in short supply. However, some of these units, designed for urban life, are stackable, making better use of the smaller inner city areas that result from site clearances. In fact, in some cities (where space really is at a premium) units have been placed on top of existing buildings. They are lighter than conventionally built penthouses.

The units are ready to have electricity, drainage and water connected when they arrive on site. Inside one of these units the accommodation is very similar to modern apartments. If you were to walk into one of these units you would think you were in a flat in a newly built apartment block. That is enough to convince many prospective buyers that these are viable living spaces. The size of units ranges from one bedroom to four bedrooms. On the whole, stackable units tend to be low rise projects, if they are stacked on top of each other. Providing three or four tiers of units does not involve much infrastructure.

Pre-fabricated units are a real alternative to traditional buildings and offer a serious solution to the housing crisis. They are affordable in a way that conventional brick-built houses are not. Prices are considerably lower than for the equivalent amount of inside space provided by conventionally constructed houses. Being comparatively light, they can be built on piers allowing car parking space to be provided at ground level. They can thus be erected over existing ground-level car parks. Some units have been designed that employ solar panels to supply electricity. The materials used to make walls and roofs use eco-friendly materials and allow modern materials made from recycled plastics to be used.

Not just cheap

Many of the units currently available offer cheap solutions to meeting urgent housing need. They can also provide homes for other sectors of the housing market, in areas where land is more freely available. If we can provide housing stock for the higher ends of the market (I mean units from £100,000 to £300,00 or more) it would lead to purchasers freeing up existing accommodation. That would also relieve pressure on demand at the lower end of the market. Some of the prefabricated units are clearly intended for the wealthier end of the market; people who can afford the land required and can afford to put services and drainage in place. Providing more units at this end of the market will enable movement to take place that would, I would argue, reduce the pressure on the lower-priced sectors and free up opportunities. Thinking back to what I said before on the renewal of existing urban housing stock, these units could be very useful on sites where redundant properties need to be demolished. Instead of replacing properties with brick-built houses, these prefabricated units could be installed at much less cost and in a fraction of the time. In urban areas, the challenge is not to create new land but rather to use existing land more effectively.

The goal of housing policy should not be to do things on the cheap but to provide housing that is of good quality at prices that people can afford – people who are desperate to have homes but who cannot afford to climb the ladder of conventional housing. When we look at the units being offered by the prefabrication suppliers, we see a lot of architectural and engineering expertise has gone into the design. Much more intelligence has been used by designers in the prefabrication sector than we see in traditional housing building.

So why aren’t we doing it?

The housing crisis is not that difficult to solve. The bigger problem lies in our members of parliament – the people who make the decisions. They are like an old record that got stuck – endlessly repeating the same old formula about building housing with bricks. I have argued before that brick-built houses are not the most viable option for the situation we have in this country. Until our policy-makers move away from that antiquated mantra, we are unlikely to make progress.

We need people with imagination to head up future housing policy. Not just in the palace of Westminster. Local authorities could do a great deal more to provide housing in their areas but this will require both elected members and officers in housing departments to change their long-established, entrenched, attitudes about to how to do things.

The goal is simple: provide quality affordable housing cheaply and quickly. You cannot do that with bricks and mortar.

Learning from failure

The housing acts of the last twenty years are widely regarded as being failures. Successive governments have failed to respond effectively to the growing problem inadequate housing supply. Recent responses by the present government looked very much like knee-jerk reactions that had been poorly thought through.

The housing White Paper of February 2017 achieved one thing: it recognised that the housing market was broken and needs fixing. Little else of worth was contained in it. But then a white paper does what a white paper does; it opens the door to consultation. The white paper realised that there is a need to encourage diversity in the housing market. It said:

Action to help small independent builders enter the market given including through the £3 billion Home Building Fund. Currently around 60% of new homes are built by just 10 companies.

Those ten companies are brick builders and they are part of the problem – not part of the solution. If we want diversification in housing supply we have to break that monopoly. In my view that means providing incentives for non-brick fabricators to do a lot more. If the Home Building Fund is in fact to provide much-needed scope to enabling new methods of construction, then we will be well on the way to dealing with the crisis in the supply of affordable homes.

Another thing that Sajid Javid said the White Paper:

The proportion of people living in the expensive private rented sector has doubled since 2000 and that more than 2.2 million working households with below-average incomes spend a third or more of their disposable income on housing.

If there are more people in the renting sector then we need to find ways of supporting them. I very much doubt that we will see a significant decrease in the rental sector over the next ten years – what ever else happens to housing supply. What would help the rental sector is to provide a much more diverse range of options and an robust increase in the number of apartments that are available to rent. Building high rise apartment blocks in urban areas is one way of increasing supply but it is not the only one. Policy-makers need to be much more imaginative; that means letting go of traditional methods of building construction and focusing more on innovative contemporary techniques.

The government consultation on planning policy and legislation in relation to planning for housing, closes on 2nd May 2017. From the Government website we see that:

Many of the changes involve amendments to the National Planning Policy Framework. The Government intends to publish a revised Framework later this year, which will consolidate the outcome from the previous and current consultations. It will also incorporate changes to reflect changes made to national policy through Written Ministerial Statements since March 2012. These are:

Support for small scale developers, custom and self-builders (28 November 2014), etc.

The statement about support for small scale developers is one of nine topics. It might prove to be one of the most important. Interesting to see the word ‘custom’ in there.

Turning things around

The history of housing legislation – in the past twenty years or so – has been littered with outmoded, poorly thought-through measures that have failed to make an impact on housing supply and that is why we now have the crisis that we see today.

It is not just the reluctance of policy-makers to embrace new methods of construction that leads of failure. It is also their inability to devise new methods of finance. We have known for a very long time that there has been a shortage of traditional mortgage finance. Tackling this issue probably does not lie in reforming banks and building societies; some of it might be but what is more likely is that we have to devise new methods of providing finance to prospective home buyers. We might well have to replace the mortgage with a new way of financing home ownership.

Sajid Javis is an old-school thinker; he is still chanting the mantra of building new houses and his record is clearly stuck in the groove of bricks and mortar.

Two groups of people are at a severe disadvantage in the housing market: the young and old. Young people have not been working long enough to have saved up enough money for a deposit. They are dependent on the ‘bank of mum and dad’ – if they are fortunate enough to be born to relatively well off or wealthy parents. Older people can often find themselves unable to access mortgages because of their age; mortgage providers frequently view retired people as being bad risks when it comes to paying off housing loans.

These two groups stand to gain from the introduction of new methods of construction. Because these units cost a great deal less, they are more affordable and much less capital is required to buy them. If smaller loans are required, existing mortgage providers might be more willing to lend, over a shorter period of repayment. This in itself will not solve the problem. What we need is a totally new approach to financing access to housing – one that is not based on lending large sums of money over twenty five years. We should rely on only the private sector to provide home loans.

Think of it this way – people are financing cars costing between £20,000 and £50,000 without facing the up-hill struggles they experience when trying to finance a home to live in. Cars do not hold their value as much as homes over a period of years. The chance of a car being written off due to an accident is considerably higher than loosing a home due to, say, fire or natural disaster.

Housing is an issue of fundamental importance; many other aspects of our lives are pivoted on having a suitable and satisfactory home. If our country is to become a better place in which to live over the next twenty years or so, we must be able to deal with the housing crisis that we face today.

References

February 2017. YMCA response to housing white paper.

February 2017. The housing white paper.

10th October 2016

Homelessness

We all need a place to call home

see below for updates

As series of shows under the moniker Musician Against Homelessness is making me think.

Making me think about what homelessness is. To my way of thinking it is just that: being without a home. Earlier this year I wrote extensively about housing, particularly about housing policy in my book Housing: Approaches to Policy. I also wrote a piece called What is a home? It is that aspect of the topic on which I want now to focus.

Tens of thousands of people are homeless in today’s Britain; and of course in the rest of the world as millions of migrants leave their homes fired by the hope of finding a new place to live in peace and perhaps also prosperity or at least well-being.

A home is a place that provides safety and security. Homes provide the substance of everyday living but above all they should give people a place that is safe, a place in which they can feel secure. Sadly our country neglects that aspect and provides only accommodation for millions of people who are forced to rent because they cannot afford to buy.

Safety and security are essential to an ordered and settled way of life; they are not secondary consequences of having a place in which to live; they are the bedrock of human existence. If accommodation is not safe and if it is not secure then it is not a home. It is simply temporary accommodation and that is what millions of our citizens are forced to accept because the Government has failed them. The UK government has failed to understand that housing is an a state of crisis – a crisis created by government and one which it shows no signs of being able to deal with.

Owning a home – usually the most secure form of living – is now a privilege of the few rather than a right of the many. More and more people in Britain are renting because they cannot get on to the property ladder. This is not good for our society; it is not good because the government has set the rules to favour landlords and has provided inadequate security of tenure for tenants. I won’t reiterate what I have already said about the government failure to create a satisfactory policy on housing.

What I do want to focus on is why having a home is so important to the lives of everyone. A home is what provides us with safety and security; it also provides us with the basic amenities of living – a place to cook food, somewhere to sleep undisturbed, a space in which parents can bring up children; a space in which people can keep their treasured possessions – the things that matter to them; a place that provides comforts that aid rest; a place in which to carry out the daily routines of human life. For some, it is also their place of work. A home is where people can entertain their friends and family; a place where some keep can keep their pets; listen to music; read books; pursue an education; enjoy entertainment… a home is essential to living a civilised life.

Why then is it that the Government treats rented accommodation with such scant regard? It is just because so few politicians live in rented property? Can they really be so unaware of how important rented tenancies are when so many thousands of their constituents must pay rent and bring to them a constant flow of problems arising from the problems they inevitably have with their landlords? Is it because politicians have an ideological obsession with council housing? Is it because politicians have had the concept of new build housing drilled into them as being the right solution to the housing crisis?

Yes all of these things are true. Too often politicians tend to base their policy beliefs on their own personal experiences and if that does not included renting in the private sector then they are only aware of it through what they find in their surgeries. That is not however what being a professional politician is about. Is it not the right to represent people.

The scale of homelessness in Britain has been underestimated because it has not been correctly defined it in the first place. Homelessness is not just having no where to live; it is also about not having the right standard and quality of housing. Hundreds of thousands of people are living in accommodation that does not provide them with a home – either because it is not safe, not secure, lacks basic amenities of living, is available to them only for a limited period of time; is unhealthy; fails to meet their needs where they are old or disabled; provides insufficient space to people who have children; is in a locality or neighbourhood which is not right for them; is not under their personal control because they have to share it other people (often their parents) owing to lack of opportunity to find somewhere better. A home is a space in which its occupants should be able to organise to their own requirements for living (within certain limits.) There are a lot of cultural differences in home-making but the principles are always the same. Most people live in family groups but there are special circumstances where people live alone, for what ever reason – whether through choice or through personal situations. I have already written about the substance of what a home is and should be. in my article What is a home.

In my previous article I touched on choice – asking ‘can we choose where to live?’ Choice of home depends on financial status and income to a large extent. It also depends on government policy and the extent to which law and practice allow choices to be made or not. The way government controls housing – if in fact it does – will either encourage choice or restrict it. It is the way that national and local governments implement their policies on housing that will enable people to have a choice or deny them opportunities. The poorer you are the less choice you have – both in housing and in most other areas of existence. That is due largely to the market; a market that the government is unwilling to regulate.

If we want to have a home that is suited to our circumstances; a home that provides us with the essential elements described above, particularly safety and security, then we must have choice; we cannot find the home that we want, the home that suits us, if our ability to choose is limited, if opportunities are denied that should be allowed. It takes government policy to expand and protect choice.

Housing policy in this country is in a state of crisis; successive governments have failed to make policies at both national and local levels – that can impact the current quantity, supply, quality and distribution of housing; homelessness is increasing; access to the right kinds of housing is diminishing; affordability of housing options is not increasing.

If the authorities that control the housing market in this country are to make any real impact on this crisis they must begin to work on the real world; the world in people actually live; disengage themselves from their own personal circumstances and work with the statistics that are in plentiful supply. They – the various levels of government that make policy and control its implementation – must grasp what it means to have a home and what a home is for the millions of their constituents and voters who are in need of one. They must have a clear sense of what a home is and what it means to have one.

What does the world say about homelessnesses?

Having written the above, I searched on the Internet for articles about ‘homelessness’.

I looked at the website of Shelter, the organisation that provides help, advice and support to people who are homeless. On a page headed ‘What is homelessness’, I read that

You may be homeless if you live in unsuitable housing, don’t have rights to stay where you are or you’re sleeping rough.

The page went on to advise:

Even if you have a roof over your head you can still be homeless, if you don’t have any rights to stay where you live or your home is unsuitable due to severe overcrowding or other reasons.
You might be entitled to help as a homeless person if you are temporarily staying with friends or family or staying in a hostel or night shelter. Even if you have a home, you could be considered homeless if you live in very overcrowded conditions or in poor conditions that affect your health, or you’re at risk of violence or abuse in your home.

As Shelter points out, people become homeless for a variety of reasons; they refer to young people leaving care, offenders leaving prison, women who are expecting a baby, those seeking asylum or who are refugees.

They are include people who are claiming benefits or living in a low income. I would say that having to depend on benefits and having an income that is lower than the average does not of itself create homelessness though of course is if frequently a contributory factor for many people. Having insufficient income to pay for the housing you are currently in, leads to eviction if rental payments are in arrears or, as I discovered recently, if the landlord decides to sell the property or increase the rent to an unaffordable level. Homelessness spirals out of control where governments fail to protect tenants and do not want to make public expenditure available to intervene in the housing market. Doing so has many unintended consequences – the cost of helping people faced with homelessness increases; housing benefit payments go up; dealing with other problems such as criminality, drug addiction and mental health leads to increased public spending which could have been avoided in the first place. Not spending sufficient money on affordable and suitable housing is a false economy and leads to increasing demand for public services.

As the Shelter website points out, you don’t have to be sleeping on the streets to be considered homeless. There situations in which people are homeless even thought they have somewhere to sleep but where that accommodation is inadequate, temporary, unsafe and in fact there are many complicated situations in which people find themselves that may lead local authorities to regarding you as being homeless or about to made homeless. A lot of this is however discretionary; it is up to the processes adopted by a council to decide whether a person is homeless and, if they are, whether they can be helped.

Practice varies widely throughout the country and national government largely leaves it up to the local authorities to make their own arrangements and set their own levels of provision for people who apply to them for housing or housing advice. In many ways that is best; local people know their own area and what is feasible and the conditions of housing supply that exist in their local area.

The problem that we have is that central government create the problem and then expects local government to provide the solutions. Without providing the resources to do the job properly.

Some of the documents I found in my search drew attention to work, to jobs, to enable people to have the money to meet their housing needs. Well, that would seem fairly obvious. When I looked at this issue I brought in transportation; in fact I argued that three things are inseparably linked: employment, transport and housing. They are all linked together and intertwined to the extent that it is impossible to make improvements in one without making connected improvements in the other two. That is true, in my view for the majority of people. For others there are added issues to do with mental health, disability, discrimination, domestic violence, vulnerability, age, literacy, many challenges and needs that are not being met that make their situation more difficult to copy with.

The statistics about housing and homeless in the UK are stark and are getting worse. Despite the blandishments of senior politicians, the government is not moving in the right direction. We see this right across the party political landscape. Politicians might say the right things but the problem is they do not do the right things; and as long as this continues our country will continue to suffer the consequences of the housing crisis.

updates

A news item on the BBC website reported on a statement released by the charity Shelter; among other things the item said:

More than four in 10 homes in Britain do not reach acceptable standards in areas such as cleanliness, safety and space, housing charity Shelter says.

Each of the five elements in the standard is measured according to certain criteria – for example, the essentials of “space” include having sufficient bedrooms for the household and space for the whole household to spend time together in the same room.
Other aspects included having outdoor space, and enough space for children to study and adults to work.

The five elements

Affordability: Factors cited included how much was left for essentials, savings and social activities after paying for rent or mortgage
Decent conditions: Words like “safe”, “warm” and “secure” were among the words used by the public to describe what makes a home meet this criterion
Space: Adequate space was felt to be crucial for wellbeing, especially mental and social wellbeing
Stability: Stability was often described as the extent to which people felt they could make the property they lived in a “home”
Neighbourhood: Living in an area where people felt safe and secure was considered particularly important. People also wanted to be close enough to work, family and friends and the services they need

Nearly one in five, or 18%, of homes failed the criteria for decent conditions, with renters twice as likely as homeowners to live in places which fail on this element of the standard.

On stability, one in four private renters felt they did not have enough control over how long they could stay in their home.
Shelter has called for stable rental contracts that last for five years and protect tenants against unaffordable rent increases.

[Source: BBC]

Notes about

Housing and housing policy

in 2016

Now that I have published the whole of my book on housing policy, I am keen to update the work with news and information that is coming in all the time.

Government housing: a scandal

15th August 2016

The Dispatches programme broadcast tonight by Channel 4 did a convincing job of highlighting the housing crisis and revealing the Government’s failure to achieve even its own targets in meeting the growing demand for affordable homes.

As the programme resume ‘explains Harry [Wollop] investigates the failure to build enough houses and questions the government’s commitment to solving the problem. He finds out what happened to a plan to sell off enough public land to build 100,000 new homes, and discovers deals with big developers at a potential loss to the taxpayer. He also finds large areas of sold-off land sitting empty, while millions of people cannot find an affordable home.’

The programme highlighted the sales of land by the Ministry of Defence where housing has not been built and where the price of the sale was well below what a property expert estimated was the market value of the land. The Cameron government make promises about the number of homes that would be built on land sold by the government and the Dispatches programme found that the target of 100,000 new homes has nowhere near been achieved.

I was incensed by the revelations made in the programme. So much  so, that I was moved to write here that a central agency should be created – a government department – through which all public land sales should go. That Department should be under the kind of scrutiny normally applied to the workings of central government.

The people working in this central agency should be experts in the field of land and property; their brief should be to get the best possible price for public assets and to ensure that land sales are sold to secure public benefits and not just sold to the highest bidder on the open market.

Prior to the changeover in power when May took office, the record of the Government on tackling the housing crisis has been abysmal – years of broken promises, years of failed targets, years of incompetence and mismanagement and we are now no better off as a result. if Theresa May really wants to do better she has to realise that building new homes is only part of the answer; it forms only a small part of the solution to the country’s housing crisis.  New build is a slow and expensive way to meet housing need; it will only succeed if planning consents are tightly controlled and enforced. Allowing the Ministry of Defence to do as it pleases when it sells off land is clearly a recipe for disaster and failure. A new land agency would help Ms May to achieve what she said she would do and make sure that Downing Street keeps control of what happens to land once it goes into private ownership.

Buy-to-Let impact on house prices

In April 2016 the press reported that house prices reached an all-time high even though there was strong demand in the market. Investors chased property deals as they sought to buy before the stamp duty tax increased on 1st April. Analysts saw the demand from buy-to-let investors pushing up prices. Following Brexit, house prices wavered by the longer-term picture shows prices holding steady despite the doom and gloom affecting other economic indicators. In August the Bank of England cut interest rates; good for borrowers such as mortgage payers and this might give a boost to the housing market. Wages are not seen to be keeping pace with house prices leading many of those hoping to get a foot on the property ladder to opt for rented accommodation.

Tenancies failure

Kate Webb writes for the Shelter policy blog about the government’s plan to remove security for social tenants (8th March 2016.)

New clauses to the housing and planning bill are proving to be controversial.

Web says

Shelter is concerned that constantly churning people through social housing will be hugely destabilising to families and communities. But new research also suggests that the reform will fail even on its own terms of ‘making best use of stock’.

She goes on to say that

Now new research shows that early adopters of fixed term tenancies in the UK have also become disillusioned with them because they have proven to have limited scope to free-up social lettings. The researchers concluded that landlords were also sceptical that short-term tenancies were effective in increasing social mobility or shaping household’s behaviour.

The research she refers to was undertaken by Heriot Watt University in February 2016. The researchers published their interim findings.

What stood out for me, reading through the report was security of tenure. One aspect of this is the way that successive governments have used social housing to influence the behaviour of tenants considered to be ‘anti-social’, ‘welfare dependent’ or ‘deviant.’ The report points to use of probationary periods in social housing from 1996 onwards. The Localism Act 2011 allowed landlords to introduce fixed-term tenancies, subject to a statutory minimum of two years. It all smacked of ‘deserving poor’ and the others who are poor but whose behaviour causes problems.

As Webb comments

The researchers concluded that landlords were also sceptical that short-term tenancies were effective in increasing social mobility or shaping household’s behaviour.

and she goes on to say

Research into early use of fixed term tenancies in England found that the majority of households were anxious or concerned about their lack of housing security. Families with children, older people or people with disabilities and long-term health problems tended be most anxious about their long-term prospects.

This throws a spotlight on a very important issue – tenant security. It’s an issue I discuss in my book. Those who shape security of tenure seem to be concerned about being locked into providing accommodation for people who are ‘problem tenants’ – those whose behaviour is troubled and troublesome. Anti-social behaviour orders were fashionable but there is little evidence that they worked all that well.

Researchers have looked at how local authorities and the government have used social housing as a weapon to attack anti-social behaviour and lack of civility in neighbourhoods. Welfare providing is viewed as being increasingly conditional on good behaviour. Now the economically deprived must be not only ‘deserving poor’ but well behaved poor.

Source: Shelter policy blog

Renting

More and more younger people who cannot get on to the property ladder are having to rent flats. The BBC news programme East Midlands Today ran a story about young renters (14th April 2016) in which they drew attention to the cost of new houses rising faster than average incomes. Renting is one of the few options open to younger people who cannot afford to put down a deposit for a house of their own. This is particularly the case in London but it also affects the East Midlands. The Government’s notion of creating a nation of homeowners is failing, partly due to the incoherency of its own policy as the Chancellor raises stamp duty on buy-to-let properties. People aged 20 to 39 are being locked out of the housing market, compared with previous generations. Unable to raise deposits and access mortgages, an increasing proportion of young adults have no alternative but to rent their homes. In the news item it was claimed that buy-to-let landlords rushed to purchase property before the increased stamp duty came in. This took away houses from first time buyers, it was suggested in the news piece. Average wages in the UK are failing to keep up with the rising cost of new homes. Even rents are rising faster than salaries in some areas.

I looked at the website for Generation Rent, the body that is developing a national network of private renters and local private tenants groups.

Housing: approaches to policy

by Trevor Locke

Part 3

Housing, employment and transport: why we need joined-up policies

In the previous part of this series, I looked at bricks and other kinds of building materials, and asked if there can be viable alternatives to traditional construction materials. I considered how building design might change to take account of the rise of new materials. I move on, now,  to discuss the kind of policies that are increasingly playing a part in the supply of accommodation.
It is often said that Britain has a housing crisis. The Government hopes to supply a million new homes by 2020 [Guardian, September 2015]. But, over the past four years only 47% of the amount needed in England have been built [BBC news, September 2015]. It is the scale of the housing shortage that leads people to talk of a crisis. The National Housing Federation was quoted as saying that about 245,000 new homes were needed each year in England. Gill Payne, director of policy and external affairs, said: “In some areas, there is a drastic shortage causing prices to soar, putting homes out of the reach of many people” [BBC, September 2015] The BBC’s Inside Out programme on housing, drew attention to the shortfall in housing supply as matched against housing need between 2011 and 2014. The crash of 2008 is often blamed for this shortfall but it is not the only factor. According to the Inside Out programme ‘critics say the change has also made it easier for “inappropriate and unwanted” developments to progress.’ Politicians have criticised the National Planning Policy Framework of 2012, claiming that the said changes to the NPPF were required to ensure “the same weight is given to the environmental and social as to the economic dimension” with “due emphasis on the natural environment”. Clive Betts is quoted as saying “Councils must do more to protect their communities against the threat of undesirable development by moving quickly to get an adopted local plan in place.” Even The National Trust said the MPs’ report was another indication the NPPF had allowed “streetwise developers” to ignore the wishes of communities [BBC, 2014].
Housing is a minefield of conflicting policies and opinions. In order to navigate a path through this confusion, I set out my agenda of key policy issues: I begin by discussing the need for affordable housing before explaining why I think housing policy is the key to everything. I then look at the issue of renting before considering three interconnected policy areas – housing, employment, unemployment (economic status) and transport. I then discuss how better use can be made of existing housing stock. This agenda is about the need for joined-up policies.

The need for affordable homes

Are people ready to move away from standardisation and established traditions? If the media is to be believed, the average ‘Jess and Joe’ want to get married and start a family and as part of this, they want to own a home of their own. But does ‘Mr & Mrs Average’ want to live only in the traditional house? Through the medium of television, we have seen people who have abandoned the traditional notion of the house and built themselves a home from materials you would not find on the average housing estate – such as blocks of straw. Others have done away with the conventional idea of a slate roof and covered their structures with earth and grass.

Many recent television programmes have shown people restoring old buildings, converting them into family homes often by doing the work themselves. Flat roofs have not been popular but the development of new materials has now made them much more viable. The house-building industry is still providing large quantities of structures based on the traditional idea of two stories with individuals rooms for different purposes: lounge, kitchen, bathrooms, bedrooms, etc. House designers have not moved on in their concept of what constitutes the kind of houses that people want to live in; but then, neither have house-buyers.

In post-war Britain there was a trend to build ‘pre-fabs’ – prefabricated houses built in bits in factories and then assembled on site. Prefabs were cheap, cheerful and provided a quick fix to the shortage of housing after the blitz. The decades of the 1940s through to the 1960s brought us the baby boom and, as those generations grew into adulthood, demand for housing increased. Recently, the lack of access to mortgages, following the financial crash of 2008, has led to an increase in rented properties. Couples and new families, not wanting to be stuck at home with their mums and dads, are going out to find rented accommodation, often because this is the only option open to them. In the urban areas this is fairly easy but in the countryside, it is much more of a problem. House-prices in rural areas are very widely beyond the reach of workers in villages and rural areas.

Today, the baby boomers of the 60s are down-sizing. Having brought up their families, couples find themselves living in houses that are bigger than they need. Couples, aged 60 and over, are moving into smaller properties. Whilst this should be releasing houses for occupation by younger people, the problem is that house prices have increased and the mortgages needed to buy these properties are hard to come by. Recent predictions show that ‘house prices are set to increase by more than previously expected in 2015. The CEBR now expects the price of the average home in the UK to rise by 4.7% – up from its March forecast of 1.5% growth. A chronic lack of properties being put up for sale has pushed up prices in recent months and is one of the reasons behind the upward revision to the forecast’ [Centre for Economics and Business Research, 2015].

The British are wedded to the idea of the single occupancy house as the basis for family life, unlike our continental neighbours, in Europe, for whom the apartment block is the standard form of housing. Single-occupancy houses are more expensive to build and require a lot more land, than is the case for multi-level apartments. House-builders and government policy makers see no need to attempt to change the public’s demands for the typical family unit; they are comfortable with the belief that families know what they want and there is no need to change anything. Political policy is wedded to freedom of choice and not much given to trying to change such choice. Politicians have made a big thing about new-build [Hope, 2016]. To them, housing supply is all about building new houses; it is hardly ever seen as being about the better use of existing housing stock. In order to get supply anywhere near the level of demand for houses, in England today, the solutions are always stated as being about building new homes. Only the more radical politicians give credence to the idea that the supply of housing might also include a wider set of options.
Our notion of affordability, in housing is important but it is strangled by our servitude to traditional ideas – more so now than it was in the previous century. If people really do want affordable housing, I would argue, then they should change their stereotypical ideas about what constitutes a home and the materials used in house-building. In any case ‘affordability’ is a relative concept; it is not just about the price at which houses are offered for sale – it is also about how much money people have to pay for them. Can people afford to buy new houses?

Well, certainly not in London. House prices vary considerably around the UK (as do incomes) and what is affordable in one region might well be too expensive in another. People cannot easily move from a high-price area to one where houses are cheaper, any more then they can easily chase after higher paid jobs in other parts of the country.  Newly elected Labour party leader Jeremy Corbyn has a policy on housing and in it he begins by saying ‘A secure home is the foundation of a happy life and decent housing for all is the foundation of the good society. For too many people their housing is not a source of security, but a cause for anxiety’ [Corbyn, 2015]. I pick this out, not because I am a fan of this politician, but because he has a neat way of saying things that I too happen to believe, such as, the above quotation. I go some of the way with him but when I read ‘The housing crisis cannot just be solved by building more homes, although this is a major issue that needs to be tackled. It is more complex than that: to tackle the housing crisis we also need to address problems of inequality, regional disparities of income and wealth, taxation policy, the labour market, our social security system and planning regulations’ I begin to part company with him. As I argue in this section, there is a need for joined-up policies but it is a matter for debate just how many policies need to be joined up to make a housing position that is credible and effective. It will take many decades to make an impact on inequality and disparities in wealth and income. These issues referred to by Corbyn are large-scale issues that are important but housing is something that people need today and demands immediate actions that cannot wait for a fairer society to develop. Corbyn goes on to set out a raft of practical measures that will, in his view, solve the housing crisis to which he refers. The challenge that confronts policy makers in housing is which policies can, and should, be joined together to create an effective approach (or strategy) to housing supply. Is it some of these issues that I now go on to discuss.

Housing is the key to everything

If you do not have a home, you cannot get a job. If you do not have a suitable home, you might find it difficult to marry and start a family. Most people who are homeless are also likely to be unemployed. It’s not just a question of being homeless. Often the problem is more about inappropriate housing and unsuitable accommodation and these can be pivoted on poor employment. Energy poverty rides on the back of inappropriate housing; people who live in accommodation that is not suitable are likely to suffer from high energy costs, which will lead either to inadequate heating or people failing to feed themselves properly, in order to keep up with the demands of energy suppliers. Poorly built houses are also likely to suffer from damp, drafts and lack of insulation. This is more likely to be typical of ageing housing stock. Modern housing has to conform to higher standards of building regulations.
Policy requires us to look at housing and employment in one single package; the two things are closely inter-related and you cannot deal with one without, at the same time, addressing the other. I will argue, below, that government policy makers are failing to do this. A population that achieves optimal levels of employment requires optimal levels of housing; that is my position but I fail to see this reflected in the manifestos of political parties or in the policies being issued by the government. Joined-up policies are not characteristic of today’s breed of politicians. This goes some way to explaining why the basis for home ownership or occupation is changing so much. When David Cameron said that he wanted to sweep away planning rules requiring the construction of affordable homes, in favour of first time buyers, did he stop to think what the employment requirements would be for that? The kind of jobs that would be needed to support loans for first-time buyers was not mentioned in his speech to the 2015 Conservative conference. It is pointless planning to build thousands of starter homes for a market that does not have the employment prospects needed for sustainable access to these markets. Coming up with a credible package would need alignments between employment and wages, mortgage lending and construction incentives. Meeting housing need targets does not depend on whether it is about buying or renting or any other form of tenure; it is all about how the employment economy either enables or hinders access to the finances needed for any kind of accommodation. We can only get to grips with the housing crisis once we have locked access to housing into access to jobs and have synchronised both of them. Part of this process involves working with income sectors, seeing how lower-income or middle-income families will fare as homes and jobs are brought together.

Renting a home

It is said that we need 250,000 new homes if we are to keep up with housing demand, [de Castella, 2015]. In that context what do we mean by ‘new?’ Do we mean new build or do we mean more supply of housing stock of all kinds. Around four million people are now renting their homes [Owen, 2014]. In many continental countries, renting is the standard tenancy. Now that house-ownership is so difficult to achieve in England, renting looks like it will become the most frequent approach to securing accommodation. For policy makers, the key issue is one of renting not being as secure, for tenants, as it ought to be.

New residential tenancies had increased 2.5% in the first month of 2015; ‘The figures show the highest growth occurring in the East Midlands, Scotland and East Anglia with rents rising 6.2%, 5.7% and 5% respectively.’ Furthermore, ‘the average rent in the UK is now £889, compared to £867 at the end of 2014, and £799 in January 2014’ [Property Wire, 2015]. This is still more than the equivalent monthly mortgage repayment. Lewis Dean said that ‘rental prices of homes in England and Wales have grown more than house prices for the first time in two years. Rents across England and Wales reached a new record high at £789 in June, 1.4% higher than the £778 recorded in May and up 5.6% since June 2014. The hike means last month was the first since July 2013 where rents rose more quickly than house prices for comparable properties, with this annual rate of house price growth standing at 4.5% over the 12 months ending June 2015.’ [Dean, 2015] Which is rather startling, given that economists are predicting that house prices will rise dramatically in the years ahead.

Since the crash of 2008, availability of residential mortgages has declined; the effect of this is that young people have either continued to live with their parents or have moved into rented accommodation. Added to this, a substantial number of older people have left large family homes and transferred to the rented sector. Renting a house or flat was no longer the preserve of students and people living in an area for a short while. A shortage of new housing has also fuelled this trend. The demand for rented accommodation has grown and this has led to an increase in prices, so much so, that the price of renting has increased faster than house prices. What dogs prospective renters is the requirement to provide a deposit. The majority of rents demand that a tenant must pay a deposit to cover fixtures and fittings. On top of this deposit (which is supposed to be refundable at the end of the tenancy) monthly rents must be paid in advance. It is common for landlords to ask for one months rent in advance. The law requires deposits to be lodged with a tenancy deposit scheme that is backed by the government [Government website, 2015].

If monthly rental payments are higher than for equivalent mortgage repayments, the impact on disposable income can be seen straight away. Disposable income for a large section of the population has been decreasing as accommodation overheads have gone up, both for rents, mortgage repayments and inflated energy costs. This has an impact on the economy as a whole; spending on retail products is lower than it might be, dampening demand and strangling the purchase of goods and services.
Following the general election of 2015, lending for housing purchase increased by nearly thirty percent. That sounds like good news, but the picture is far from optimistic. After declining for a long time, applications for mortgages have picked up. According to the Valuations Office Agency, ‘the median rent recorded between 1 April 2014 and 31 March 2015 in England was £600’ [Valuations Office Agency, 2015]; still more than the median mortgage repayment.

Predictions of the trends in renting suggest that it will continue to rise and to be a major method of securing accommodation for the foreseeable future. The main problem with this is that renting, in this country, is far from secure. The legal rights of tenants who rent their housing is complicated. If renting is to become the norm for a large sector of the housing market, something needs to be done about security of tenure. Linsey Hanley has argued that ‘There is nothing wrong with long-term renting per se: it’s the norm in most European countries, where the law tends to favour tenants. And so it should: a tenant’s need for secure shelter takes moral precedence over a landlord’s right to safeguard his income’ [Hanley, 2015]. This gets to the nub of the renting issue – that if the Government is to protect housing consumers then it must provide them with security of tenure and sort out the complex mess of legal rights that thwarts the ability of renters to stay in their homes.

As the Civitas report acknowledged, there are a lot of people who are denied access to other housing options, who are dependent on renting but their security of tenure is inadequate, under current law, and something needs to be done about this. The Civitas report argued that ‘A new regulatory framework should be considered that would curb future rent growth and improve security for tenants. This should include indefinite tenancies within which rents (freely negotiated at the outset between landlord and tenant) would only be allowed to rise in line with a measure of inflation’ [Civitas 2015].
The rented sector of housing is not just about private individuals renting out properties; in many large cities apartment blocks are owned by property developers and speculators, drawn into this area of investment by the strong demand for rents and the profits that can be achieved from renting. The tenants rent through local agents and have no relationship with these remote absentee landlords – most of which are anonymous companies often located far away from the properties they control. In the view of the Civitas report ‘In order to encourage investment in new housing, new-build properties would be exempt from this regulation, but landlords would be encouraged to enter voluntary longer-term arrangements with tenants where this is mutually attractive. Institutional investors might be particularly receptive to such a framework’ [Civitas 2015].

The problem facing law-makers, and those who drive political policy, is that they have to achieve a balance between security of tenure for residents and enabling investment in the rented sector for landlords. Moving the balance of rights and responsibilities too far in favour of tenants could deter landlords from bringing new properties into the market or even invite them to move their investments away from housing to other sources of profit. Security of tenure (or lack of it) can be a problem for those who cannot afford to buy houses; in many cases people have no other choice than to rent accommodation simply because they do not have the funds for a deposit on a house or cannot secure a suitable loan for the purchase. The terms and conditions of rented tenancies are often set to deal with problems, such as people who fail to pay their rent or move out without giving adequate notice. In my view, this is a mistake and the terms of rental agreements should address the basic principles of letting to responsible customers and leave it up to the law to sort out situations that go wrong. Giving tenants security is important because flats and houses are not just property – they are homes. Having a secure home is important to people’s health and wellbeing. It is part of a family’s (or individual’s) general security and getting the balance right should be the goal of both landlords and government policy and legislation.
This issue is brought into focus by the measure, announced by The Chancellor, in his summer budget (of 2015), that taxation benefits on buy to let are to be changed. The aim of the measure was to make taxation fairer for individual residential home owners. George Osborne said that his aim was to create a more level playing field between those buying a home to let and those who are buying a place to live in. Be that as it may, analysts and commentators are saying that the disadvantages of this measure will outweigh any benefits that it might confer; some maintain that the effect of the measure will be to raise rental levels and reduce the supply of accommodation. I examine the impact of the measure in my blog [ibid]. The Chancellor had added three cent to stamp duty on buy to let and second homes. This does not apply to properties of up to £40,000 in value. Landlords also face higher taxes on their rental income [This is money, 12th January 2016].

De-regulation of the housing market damages the long-term prospects for tenants and this can have a knock-on effect on the economy generally. Policy makers need to grapple with the relationship between jobs and homes and ensure that people have access to accommodation that offers them security of tenure. Lenders, such as banks and credit companies, do not look favourably on people with multiple addresses, who have moved house many times. They prefer clients who have lived at their current address for four years or more – not always easy to achieve when security of tenure is inadequate. Renters tend to be more mobile than house holders and can clock up several addresses in a relatively short period of time (staying put in one place for an average of 3.5 years.) Even if we discount students (who rent homes whilst they are studying and then move on when they get a job elsewhere) renters move more frequently than house-owners.

Government policy-makers are faced with a variety of tenures; when it comes to forging policy to do with security of tenure, they have to fit it into social housing, council housing, some other less common forms of tenure, as well as the private rented sector. Such policies are subject to moral and ethnic debates that focus on the rights of individuals to security; there is nothing wrong with that but governments are more likely to be concerned with the financial and commercial consequences of the law. Even so, individuals are worried about their security rather than the profitability of property speculation.

For economists there are several issues in all this. The percentage of income that goes into providing somewhere to live (and energy to run it) is a factor determining the outcome of disposable income. The national economy relies on strong consumer demand for products, food and domestic retail consumption. Increasing housing costs are not good for the economy as whole. The strength of the economy has always seen employment rates as being a key factor. Economists are beginning to realise that the cost of housing is a key factor in determining the strength of consumer demand. Housing costs are nearly always the biggest single expense for families and individuals and rising accommodation costs hold down consumer demand for goods and services in the domestic sector. This is true both for mortgages and rents and for energy costs. Building a strong economy involves joining up policies that affect employment, housing and transport.

Housing and employment

Most people in this country need two things: somewhere to live and a job to pay for it. There is a reciprocal relationship between housing and employment. People need a home in order to get and hold down a job; people need jobs in order to be able to fund a home and meet their energy bills. People are locked into this ‘catch22’ cycle of needing two things at once. This works well when times are good but when people lose their job or their homes are put in jeopardy, they find themselves in trouble.

If we are to have policies that work, we must be able to make housing and employment work together in a way that reinforces them both. So, how does the housing market relate to employment? What proportion of the labour market can afford housing?

What people are being paid relates directly to the type of housing they can access. Those with well-paid jobs, that have long-term prospects, will be able to attract mortgages. Mortgage providers are less keen to fund those whose jobs are short-term or occasional – such as those on zero hours contracts. It is not always the level of pay that gives access to mortgages – it is more to do with the long-term prospects for continued employment that will fund a mortgage over its term (typically 25 years.) People who are on zero hour contracts are not good prospects for mortgage providers. Precarious employment arrangements are not good for home-ownership and access to mortgages and leases.

Despite the fact that the UK has a record level of employment – the best since 1971 – home ownership is as low as it was in the 1970s. Can government policies be synchronised so that there is both full employment and a strong supply of housing? Traditional home owners (in terms of their employment status) are becoming a smaller proportion of the labour market. It would be wrong however for policy makers to assume that they need only provide good employment to sort out home ownership and accommodation. You cannot buy security of tenure in the rented sector if it does not exist. You cannot get a mortgage if your income and job prospects are inadequate.

People who have to survive on precarious jobs are finding it more and more difficult to gain access to suitable housing. The Labour Party’s pre-election headlines (of 2015) placed emphasis on increasing the supply of new build housing; but if they do not have synchronised policies for employment, too few people who will be able to buy into that housing and the policy will fail. What people need, to access new-build housing, are jobs that offer long term stability and a predictable income. New build houses are more difficult to secure than rented properties or other forms of accommodation tenure. In some respects new building housing is not the answer – it is actually just part of the problem.

Around 15% of the labour force is now self-employed. There has been a huge increase in people gaining their primary income from a small business. ‘Nowadays, although it is not impossible for someone who is self-employed to secure a mortgage, it can certainly be a difficult process because lenders are far less willing to take what they see as a risk on those with a ‘non-standard’ income’, claims one website [Thisismoney, 2015]. Lenders want to see a history of business success and to be convinced that this will continue over the life of the loan. That immediately places people into age categories. With our ageing population, more and more older people are economically inactive and securing the best (most secure) accommodation is very difficult for people who do not have a secure income. Pensioners might be able to show that their income is secure but, if they are over 55, they will still find it difficult to get mortgages. Lenders are reluctant to provide housing-related loans over short periods.

In 1971, half the population was renting and the other half owned their homes. The number of people in work is now at its highest level since 1971. What proportion of employed people can afford access to housing? We hear a lot about the difficulties that people have in securing a mortgage, especially for those aged 20 to 25. These might be people who are in work but the kind of earnings they have, does not always give them access to housing. If we now have record numbers of people in housing, why are so many not able to get a mortgage or cannot afford to rent suitable homes?

Guy Standing has written about The Precariat, a social class formed by people suffering from ‘precarity’, which is a condition of existence without predictability or security [Standing, 2011]. Many of these are people whose income is precariously based on things like zero-hours contracts. These are casual workers who lack a long-term reliable income, the kind of income which would allow them to secure permanent housing. If your job cannot be relied on to provide you with enough money over a long enough period of time, then you are likely to have difficulties in accessing the kind of housing you desire. Housing requires permanent employment, a stable income over a long period and a level of income that will convince mortgage-providers and people who lease or rent apartments that you are a reasonably safe bet. Zero-hours contracts might offer a handy fix for some people, for some of the time, but in the long term they create disadvantage in terms of housing.

With the growth in unreliable employment and more risky self employment, gaining access to secure accommodation is presenting increasing difficulties. If the retirement age is increased beyond its current levels, this will also have a knock-on effect on housing. The Government’s commitment to increasing the level of the national wage, it is said, will result in large numbers of small businesses failing, including those that are self employed and micro-enterprises [Inman, 2015] That bodes badly for the housing market; mortgage defaults will increase dramatically and the overall level of personal debt will soar. The success of wage increases will be offset by the unintended consequences of failure to meet housing costs. We all thought that the national wage was a good thing; perhaps now we can see its unintended consequences we will have to think again.

Housing and unemployment

Older people are caught in traps with their existing mortgages and their inability to secure loans to fund a settled and secure old age. Older people are in the best position if they have equity locked up in an existing property that they own. However, many wish to pass on their homes to their children, who might find it either difficult or impossible to obtain a mortgage of their own. Where someone has substantial savings, they can offer a suitable level of deposit to secure a mortgage or a lease. Those aged over 60 are in particular trouble because they cannot provide the appropriate length of time needed to pay back a loan. ‘With less time to make the repayments than someone twenty or thirty years younger, the lender will need to know that you will have a sufficient income in retirement to be able to make the repayments and cover the term of the mortgage’ [Sosmart, 2015]. There is evidence that a variety of brokers are now setting out to cater for borrowers aged 55 or over, who do not wish to re-mortgage their existing properties [Eccles 2014] ‘Around 350,000 over 65s still have a home loan according to the Office for National Statistics – and over the next decade the Financial Conduct Authority says 40,000 retired people a year will see deals come to an end so they will have to re-mortgage or repay any remaining debt. With the average mortgage in retirement worth around £30,000 and some older people determined to trade up, not down, the challenges for borrowers are intense’ explains one website [Thisismoney 2015.] Older borrowers, aged 60 or more, find it difficult to secure loans for housing but it is not impossible, however difficult it might be. The additional problem they face is that their initial repayments might be higher than would the case with younger people, because older people have less time to clear the debt. Those aged 65 might be lucky enough to borrow over a 15 or 20 year term. There are few lenders willing to deal with people who are at or have passed retirement age. If the age of retirement is to go up, there will have to be changes to the way that funds are lent for house purchases or leases. This type of borrowing will be sensitive to the government’s long-term plans for state pensions. Even those with private pensions are by no means safe, given the uncertain future of their funds. Raising the retirement age purely for employment reasons will have unintended consequences for housing and hence the need for joined-up policies. Measures such as the national wage and raising of the retirement age need to followed through to see what will be their likely consequences for housing and consumer demand. These could prove to be deflationary measures.

Developing policy concerned with the housing needs of older people is not easy. For one thing, life-expectancy and health risks change, the older the age of the person. Where older people have an existing property, which they own or on which there is an outstanding debt, the options are there, however daunting they might be. But older people with no existing property ownership are in a dire position. Unless their circumstances can be catered for we will see the return of a level of poverty and homelessness in our ageing population that has not been witnessed since Victorian times.

Employment, these days, is far more varied than it ever has been. Gone is the age of the life-time, permanent career. Getting a secure, full-time job with a good salary is increasingly difficult and the labour market is now geared to younger people; employment for people over 50 is a real challenge. Housing choices are dependent on income and if you can’t find paid work and self employment is not an option, then you might be in a precarious position. Jobs might well be available elsewhere but if you cannot afford to move to access those jobs, then you are stuck. Large numbers of people are commuting long distances in order to get jobs not available in their home localities. Older people find it difficult to move because they are tied to the localities in which their dependants live and the families on who they are dependent. Economic migration within the UK is not an easy option for those aged 60 and over.

Employment and transport

Employment is often dependent on transport. Some policy markers have added transport into the housing/employment equation. Some have gone on to put this into a regional context. We can look at England as a whole but when you regionalise the equation, there are areas of the country that need special attention. Some local authorities have developed policies that address the issue of the supply of land as being the key to dealing with meeting housing needs. Policy-making therefore has to balance two sets of supplies: jobs and homes. This approach also needs to consider travel to work areas – the ability of people with jobs to travel to work, to areas away from their homes. This is where transport comes in – if the supply of transport lags behind the supply of housing and the availability of jobs (within a travel-to-work area) then people are going find it difficult to get housing within a reasonable distance of where they want to work. The choice of where to live, for the majority of families, dictates where their work places can be. They have to take into account their relatives (particularly dependants and those on whom they depend) and access to schools and heath care, if they have specific needs in that respect.

Formulating housing policy is a non-starter if not related to employment and education and, I would argue, transport. Joined up policies are the most likely to be credible and effective because they pull together these variables that all depend on each other. If we want our housing policy to succeed we have to make sure that the labour market has a sufficient proportion of employed people who have the kind of income that is required for stable home ownership (whether via mortgages, leases or tenancies.) The more people whose jobs fall into the short-term, precarious, end of the labour market, the more difficult it is going to be to have a robust housing policy. Allowing employers to determine the market for jobs is bad for the economy; it is free-market-ism of the worst kind. Allowing more and more employers to indulge in short-term and zero-hours contracts is also harmful for the economy as a whole. Developing key policies in isolation from each other is a practice that cannot join up jobs, homes, education and transport and for that reason it does the country no good at all. Policies that join up employment, transport and housing supply and more likely to result in a strong economy, than those that are developed piecemeal.

I will now look at some of the issues that affect the supply of housing stock, how we can make better use of land and the possible options for addressing the short-fall in housing supply.

References

Contents of the entire work

Further reading

Part 1 of this series: Policy, practice and history

Part 2: Bricks and mortar