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John Bibby
 
John is a Policy Officer at Shelter.

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By John Bibby

We need more of every type of home

In England, we currently build about half the number of new homes every year that we need. It’s absolutely essential that we increase house building so that we keep up with the growing number of households.

But increasing house building it isn’t only a question of numbers and volumes. We will not unpick the multiple negative effects of our housing shortage without also focussing on what we build.

So today we’re launching a report which sets out why we need to increase the number of homes that we build across the housing tenures, including substantially more market, intermediate and social rented homes.

These different types of home all do different jobs within our housing system. By building too few of them all we worsen the problems throughout the system.

By building too few market homes we’ve created a shortage that’s pushed up house prices and private rents, shutting people out of home ownership and leaving private renters struggling to pay the bills.

Building sufficient numbers of intermediate homes might have softened the impact of rising prices and rents, by giving people shut out of ownership or struggling in the private rented sector an alternative option. But there have been nowhere near enough intermediate homes built for this sector to perform this function.

And by building too few social rented homes we have forced people who should be offered a long-term home on a low rent back into the only option left: the worst end of the private rented sector. This has left families on low incomes in insecure accommodation, which has driven up homelessness. It’s left people with limited options living in terrible conditions, suffering from overcrowding and reliant on housing benefit to pay rents that they can’t afford.

Debates around the housing shortage can too often come down to arguments about which tenure is needed most. But just increasing levels of building of one type of home won’t reverse all of the problems created by our housing shortage. We need to build more of all types of housing to do it.

We ought to be building at least 250,000 new homes in England each year: we’re currently building less than half that number. Based on the level of housing need and demand across the country, 50% of these 250,000 should be market homes, 20% should be intermediate and 30% should be social rented homes. This means a dramatic expansion in each tenure – and particularly in the social sector.

Levels of market house building have now thankfully begun to grow again after slumping by over half in the wake of the economic crisis, but they still have a long way left to go before they’re at the 125,000 we need.

While we still need more, the number of intermediate homes that we’ve built every year has grown in recent years as well. But this growth in intermediate house building has come as a result of the cannibalisation of funding for new social rented homes, by switching government grant from social rented homes to the new Affordable Rent homes. At up to 80% of market rents, Shelter believes that Affordable Rent should be considered a form of intermediate tenure – it’s certainly not affordable to many people who need a social home.

As a result of this switch in funding, levels of social rented house building have fallen year-on-year for the last three years and are currently at the lowest they have been since the Second World War, with over a third of the country not building any new social rented homes last year. They stand to fall even further this year.

To unpick all of the negative impacts of the housing shortage we need to halt this fall in social rented house building. We need more than a sevenfold increase, to bring it up to 75,000 new social rented homes a year.

To meet the country’s needs, the next government must commit to balanced housing growth. The next government must commit to increasing house building to 250,000 homes a year, but it should also make delivering a 50/20/30 balance of new housing growth a specific duty of a new cabinet level housing minister.

It must implement the policy changes needed to bring about a balanced mix and respond to imbalances. The 50/20/30 balance will not happen by accident. Shelter has already set out the policy changes that are needed to double overall supply. The next government must implement them.

And it must empower councils to deliver the homes that are needed across the local area, not in a way that forces centralised targets on them or allows them to ignore nearby need. The best way to plan for new homes is at a local level. A national commitment to a 50/20/30 balance should not mean that 50% of homes in every area should be market, no matter what the local need is. It means that across the country, broadly 50% of new homes should be market. In practice, different areas will need different mixes at different times. Empowering councils to meet need and demand locally – and ensuring that they do – will mean that total national supply should add up to the levels needed.

Recent increases in market and intermediate house building are welcome. But the housing shortage will not be ended until we boost house building of all types – and recognise the role that all tenures have to play.

Hannah Gousy
 
Hannah is a policy officer at Shelter

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By Hannah Gousy

Guest blog by Debbie Crew, author of ‘The Tenant’s Dilemma’

During her time working for the Crosby, Formby and District Citizens Advice Bureau, Debbie wrote the seminal report, ‘The Tenant’s Dilemma’, on the fear and incidence of retaliatory eviction. Based on the findings from surveys with frontline housing advisors, the report advocated stronger legal protections for renters who complain about poor conditions in their home. Debbie was subsequently awarded the Consumer Action Award by the Sheila McKechnie Foundation for her campaigning on this issue.

Renting in the private sector? Feel secure? 

Seven years ago, I was working at a Citizens Advice Bureau advising a client who was a tenant in private accommodation about how she could get urgent health and safety repairs carried out in her home. Everything was fine as I reeled off all her options, including making a formal complaint to the environmental health team at the council who can require an unwilling landlord to do what they are legally bound in law to do. Now here is the tricky bit that many tenants don’t realise. Below the advice text on the information system is a large red triangle with the message ‘be careful when advising tenants to access their statutory rights for repair as they may be evicted and there is no legal protection.’

I laughed out loud as it was so ridiculous, surely it was a mistake? No, sadly it wasn’t and still hasn’t changed to this day.

There are tenants who don’t understand just how vulnerable they are. They only realise when they have a dispute with the landlord about repairs and seek advice. Then there are the tenants who first realise when they are served an eviction notice giving them two month notice to leave. When we surveyed CAB advisors asking them if tenants are put off using help because of fears of jeopardising their tenancy, almost half said that this was often the case.

There are however, lots more people who never seek advice or complain about poor conditions in the first place, for fear that their landlord will evict them in retaliation.

Thankfully, most landlords wouldn’t dream of using this legal loop-hole to shirk their responsibilities. However, more vulnerable tenants are more likely to be caught in this catch twenty two situation and often suffer in silence.

In 2007 I wrote the report ‘The Tenant’s Dilemma’ as I wanted to share my findings on this issue and urge the government to act. I looked overseas for a possible solution. In Europe tenants have much more superior protection and security.  I believe this is the reason a large percentage of people choose to live in the private rented sector, rather than getting themselves in debt by accessing the housing market, but I will save that argument for another time.  America, New Zealand and Australia seem to have the answer, and have had laws protecting renters from retaliatory eviction  for almost 50 years.

So why don’t renters here have the same protections? I don’t have an answer to that as I am as baffled as the next person.  The good news is that the government is now listening and we collectively have an opportunity to set something in stone that will protect tenants for generations to come.

On the 28th November, the Tenancies (Reform) Bill will have its Second Reading in the House of Commons and we need as many MPs to attend as possible as it will kick start a process that will lead to legislation to end retaliatory evictions.

Take action today – email your MP and ask them to vote for the Tenancies (Reform) Bill on 28th November.

 

Martha Mackenzie
 
I’m the Stakeholder Relations Assistant at Shelter, I joined the Public Affairs team in July 2012. I have been working on a wide range of projects, most notably engaging with local authorities through our rogue landlords campaign. In my spare time I’m studying for a MA in legal and political theory. When not chained to a desk I can usually be found running or cycling around London.

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By Martha Mackenzie

Tackling revenge eviction is a political ‘no-brainer’

To borrow a phrase from Kevin Bacon, the government’s decision to tackle revenge eviction is a ‘no-brainer’. Or, as one recent observer termed it ‘gold-dust’ policy. One of those rare polices that as well as being extremely popular, also makes a lot of sense and costs nothing.

9 million people now rent their home privately. This includes 1.3 million families with children.

These families increasingly accept that they’ll be renting for the long term – but this doesn’t mean they are happy about it. Almost a third of renters with children (30%) believe they’ll be renting for the rest of their lives. Yet 69% say their main reason for renting is because they have no other choice.

A generation of families feel stuck in poor quality, unstable private rented homes; unsurprisingly housing is now a regularly a top five voter concern.

These voters are up for grabs. A recent poll, conducted on behalf of Generation Rent, found that 35% of private renters are floating voters.

And their political power is growing. The number of MPs with more constituents that rent rather than own their home has risen from 38 in 2001 (6% of MPs) to 65 in 2011 (10%). If this trend continues, renters will start to outnumber home owners in 104 seats by 2021.

Voters are angry.

The scandal of ‘revenge eviction’ is something that particularly exercises renters and voters. Over 17,000 people signed our petition calling on the government to end this practice. And thousands of our supporters have emailed their MP over the past couple of weeks, asking them to vote in Friday’s debate. Just talking about the issue, opened the flood gates.

You only have to glance at this Mumsnet thread to see how impassioned many parents feel about the instability of private renting. Shelter found that a heart-breaking 44% of renting parents believe their children would have a better childhood if they had more stability in their home.

But they believe politicians have the power to fix this.

In a YouGov survey for Shelter (which polled 3000 English adults) we found that 83% of renters think ‘the government has a responsibility to make sure that private renters do not live with a threat of eviction or sudden rent rises’.

But it is not just renters that feel so strongly. As more and more young families are priced out of homeownership, their parents’ generation fret about the unstable conditions forced on their children and grandchildren. The same survey found that almost three quarters (72%) of people who own their home outright agree.

Even landlords overwhelmingly support the need for new measures to tackle revenge eviction. Three-quarters of 1,059 landlords surveyed for us by BDRC Continental Research in September 2014 agreed that measures should be put in place to prevent rogue landlords from evicting tenants in retaliation.

More and more people are renting – and this isn’t about to change. Families will be spending the rest of their lives in private rented homes; they rightly expect politicians to stand up for them, and make sure their children have a safe and decent home. That is why taking on revenge eviction makes so much sense.

So, what’s to lose?

I often find, when explaining revenge eviction to someone who doesn’t rent, their first reaction is a shocked ‘but isn’t that illegal?!’. Followed up with ‘well, that’s absurd’.

To them, it is a no-brainer.

Not only does this bill have the backing of government, it has cross party support. MPs from all the main parties have pledged to vote on Friday to end revenge eviction.

We hope these MPs recognise just what a no-brainer this is, and honour their pledge to turn up. There will be 9 million renters waiting to thank them if they do.

This Friday, 28th November MPs will debate whether to vote in favour of the Tenancies (Reform) Bill and end revenge eviction for good. The government announced their support for the bill in September, but MPs from all parties still need to turn up and support it.

John Bibby
 
John is a Policy Officer at Shelter.

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By John Bibby

Why social house building could fall by a further 2,500 this year – at least

I’ve written twice recently about how social house building has fallen to historic lows and how that is playing out in different local areas.

Unfortunately, there is still more bad news to come. Although the level of new social rented house building has collapsed from over 35,000 to just 10,000 in the last four years, it still hasn’t fallen as far as it will.

We can realistically expect the number of new social rented homes built to fall again this year, perhaps by as many as 2,500 – or more.

The reason for this is that the full effect of funding cuts for new social rented homes has not yet been fully felt. This is despite the fact that the main cuts to funding for social rented homes took place way back in 2011, when the total pot for new affordable homes[1] was cut by 60% and the rules were changed to make it more difficult to build social housing with what was left.

The extended delayed reaction is caused by the length of time it takes to build a home. So the number of new social rented homes that we have seen finished over the last few years has been bolstered by homes that were started before the cuts were made.

The number of new social rented homes funded by the Homes and Communities Agency and Greater London Authority (HCA and GLA)[2] that were started fell by 90% from over 35,000 in 2011/12 to just over 3,000 in 2012/13. Since then the number of starts has hovered between 3,000 and 5,000.

However, the number of completions of HCA and GLA funded social housing still only fell down to 7,700 last year, leaving a gap of 2,500-5,000 homes that were completed in 2013/14 than were started in the years preceding.

Barring miracles and counting errors, homes do not get completed unless they’ve been started. So at some point the completions number must come down to the 3,000-5,000 range.

Just taking the gap between starts and completions into account, then, we can expect a further fall of at least 2,500, bringing the number of newbuild social rented homes nationally down from 10,000 to somewhere just above 7,000. This is equivalent of just 0.004% of the number of households on housing waiting lists across England.

This is not the end of the story, though, because social housing is also funded in other ways, as well as through national grant. Some may hope that these other funding mechanisms will step into the gap that’s been left by grant and soften the blow.

Unfortunately, levels of social rented homes delivered by other sources are at the very best likely only to maintain around their current level – and they may actually fall as well.

There are a number of different ways that new social housing is funded other than by national grant, but the largest of these is funding via obligations that are placed on planning permissions for new developments, called Section 106 obligations. Because these are tied to new developments, affordable homes delivered through Section 106 trend to track private house building.

Even when the private market was at it its height before the economic crisis, new social rented homes fully funded through Section 106 were only 1000 higher than they were last year.

So while the recent pick-up in the private market may lead to an increase, we shouldn’t expect it to fill the gap left by the absence of grant.

What’s more, there have been a number of changes to Section 106 in recent years (and forthcoming) that may actually decrease the number of social rented homes that it is able to deliver. These include provisions that make it easier for private developers to renegotiate Section 106 on the grounds that they make developments ‘unviable’ and a future change that will remove Section 106 obligations from developments of fewer than ten homes.

Social rented homes are a vital part of our housing market and provide long-term, affordable stable housing. Without more, the housing benefit bill will continue to spiral, homelessness will grow, total house building will remain below the amount we need and thousands of people will be left with little chance of finding a good home that they can afford.

We will be publishing a report this Thursday which sets out how many new social rented homes Shelter believes need to be built every year, as well as the numbers of new market and intermediate homes that are needed.

It will set out how we can reverse the downward spiral in social house building and deliver considerably more new homes of all types. Because we can’t conscionably go another Christmas with 90,000 children homeless and not have a plan for how we can make things better.


[1] Under the umbrella of ‘affordable homes’ comes:

  • Shared ownership homes (part-rent, part-buy homes)
  • Intermediate rent homes (short-term homes charged at up to 80% of market rents)
  • ‘Affordable Rent’ homes (long-term homes charged at up to 80% of market rents)
  • Social rented homes (long-term homes charged at social rents – typically about 50% of market rents)

[2] The HCA is the national body responsible for distributing government funding for new affordable housing except in London where the GLA is the responsible body

Pete Jefferys
 
I’m a Policy Officer at Shelter and interested in how we can get housing up the political agenda, secure a better deal for private renters and get affordable homes built. Outside of policy, I love exploring new parts of London, sport and going back home to Devon.

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By Pete Jefferys

Homes for people priced out of the market

We know that the housing market – whether renting or buying – is prohibitively expensive for many people on typical incomes, let alone those on low incomes. That’s why so many working people cannot pay the rent without support from housing benefit, 90,000 children are in temporary accommodation this Christmas and why homeownership has been falling since 2003.

With the market currently failing to provide enough homes we need to think hard about how to reform it (i.e. unlocking land and encouraging more small builders). But we also need a way of providing affordable and secure homes for those the market is failing now and hasn’t historically served.

This context is what makes proposals from the think-tank Policy Exchange to change the nature of housing associations (who are the main providers of affordable housing) rather worrying.

What exactly are Policy Exchange recommending?

  • They want to create a new category of Free Housing Associations, which gradually pay back the investment that’s been put into them from government in exchange for being able to set their own rents and choose their own tenants. On the latter, this means breaking the link between ‘nominations’ by a local council based on housing need.
  • They want to give these Free Housing Associations the power to sell-off Social Rented homes (which typically charge 40-50% of market rents) when they become available, as a way of funding the construction of expensive “Affordable Rent” homes (up to 80% or market rents).
  • They want Free Housing Associations to be able to build market rent and market sale homes on a much bigger scale than currently, as a way to cross-subsidise.
  • They want to use the Help to Buy scheme to fund the construction or acquisition of Affordable Rent (80% market rent) homes, with the government taking an equity stake in the property which is paid back either through rents or by selling the property after 15 years.

There’s certainly a lot of food for thought in the report. Many of the recommendations have been welcomed by the National Housing Federation: although it’s perhaps not that surprising social landlords want more freedoms for social landlords. There are also some ideas, such as how to reduce borrowing costs for housing associations, use public land and improve shared ownership, which are more attractive.

However, if we bring the debate back to how people on normal or low incomes will be able to afford secure and decent homes in the future the picture looks less rosy.

The implication of the Policy Exchange recommendations is that ‘Free’ Housing Associations would shift from building homes which are affordable for those on low incomes into organisations focused on higher rent homes and sales. They would be building homes that many of their existing residents simply would never be able to afford.

Equally, by breaking the link with local council waiting lists, it would become even harder for homeless families to ever find a settled home – surely not a situation anyone wants to see.

Housing associations are being forced into a fundamental debate between what is good for their balance sheets and what is good for the people they were set up to help. With some private landlords starting to discriminate against less financially secure renters (such as families and those on zero hours contracts), who will provide the new homes needed for people who can’t afford the market? From a purely balance sheet perspective it makes sense to avoid people who can’t afford the rent: but if everyone is thinking that way, where will they live?

Policy Exchange’s approach to affordable housing presents another challenge. Consider that the reforms would make housing associations ever more reliant on market rents and sales as a source of income. This makes their financial model vulnerable to future cuts to the safety net or a fall in house prices – much like private landlords and private developers. In this situation, if one part of the housing system catches a cold, such as we saw with house prices in 2008, the illness will spread much quicker and more seriously into housing associations.

Fundamentally though, I feel that the question Policy Exchange never answer is what has changed about the situation of people who cannot afford homes which justifies this shift in the role of housing associations. I can see no justification at a time in which more and more people find that the private rented sector does not provide them with a decent, settled and affordable home.

Ultimately, we must never forget that homes are for people. They must be affordable, attractive and designed to improve the lives of those who live there. Financial innovation to build more homes is fine, so long as it doesn’t become the purpose of housing.

We need whoever forms the next government to make building more homes a national priority, with an emphasis on homes affordable to those priced out. This must be done through increasing land supply, diversifying the building industry, increasing public and private investment and devolving power to city-regions.

Policy Exchange have recognised this broad approach in much of their work on housing, from supporting new garden cities to encouraging the development of self-build. However on affordable housing I think we need a bolder approach than they have outlined which would allow housing associations to build many more homes, but with the bulk of those new homes being low-rent and secure rather than high-rent with short contracts.

There are few more important questions in housing than how do we support those who can’t afford what the market is currently providing – and these ideas are not the answer.

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