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Tom McCarthy
 
I’m a Campaigns Officer at Shelter, having joined in early 2012. I’m most interested in digital campaigning and the ways this can be used to change both public and political perceptions. Outside of work I’m a keen musician, playing several instruments. I also like walking, cycling and old pubs– preferably in that order.

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By Tom McCarthy

Let’s build the houses – quick

William Hague with a suspicious wig. Tony Blair with those satanic eyes. A snaking queue of the unemployed under the slogan: “Labour isn’t working”.

Election campaign posters tell us stories from elections gone by. Condensing narratives into single messages; and priorities into billboards.

This election though there’s a familiar old face on the block clambering for attention at bus stops (and now on social media too): homes.

Housing is now consistently a top 5 voter issue, beating issues like crime and education which have traditionally polled much higher. Strategists are recognising this. And on Monday this came to fruition when the Conservatives made the issue a central pillar of their campaign.

Interestingly, their ads carry an echo of messages that seemed buried decades ago.

Other parties are adopting the same tactic too. Here’s Labour’s efforts on the issue, from past and present.

You see back in the day housing was the election issue. Politicians of all parties raced to outcompete each other on how many homes they would build. With the issue soaring up the agenda once again we’ve seen the parties prioritise it when appealing to voters.

So how has housing been resurrected from elections past to become a major issue again?

Housing is in a different place electorally to where it was in 2010 or 2005. Back then it was consistently drowned out by other issues – too many people didn’t get why it was relevant to them.

In 2015, the housing shortage is a major concern, including for those well off but worried about their children’s prospects and other voters who perhaps in the past would not have seen it as an issue for them. Equally the number of people finding themselves in unacceptable housing situations is expanding fast: the latest figures from the English Housing Survey and the strain on Shelter’s helpline are both testament to that.

In London this is particularly pronounced (see Ben Marshall’s image below), but nationally the story is the same.

This election, we’re set to see it decide people’s votes. The parties are acknowledging this and giving it real attention.

A huge step forward for those of us campaigning on the problem. Housing finally making it into the spotlight, but with further to go.

But there’s a flipside. If people care about housing, they don’t want to just hear you pay lip service to it. They’re expecting something big on how you’ll fix it.

Lay out plans to tackle the lack of affordable homes, without saying how you will actually build more (genuinely) affordable homes, and you’ll be ripped apart.

The Conservatives witnessed this on Monday. Their announcements on Starter Homes were criticised because they will pay for partially affordable homes, by undermining the requirement to build actually affordable homes. A Starter Home in London would come in at anything up to £450,000 – which would require a joint annual income of £100,000. Hardly a game-changer.

Natalie Bennett also fell victim the week before. Without answers on how she’d pay for 500,000 homes, live on air, she received some pretty rough treatment (although as Evan Davies argued, there is a way to pay for it).

What’s clear is that big, bold answers are needed, rather than schemes or initiatives. A meaningful credible plan is required, that actually answers the real problem. And people’s real concerns.

Of course the housing crisis is going to be difficult to tackle. And it will take time, money and political will.

But there are solutions. We outlined our views in a joint report we released with KPMG last year (PDF). Crucially, we showed that you can start to turn around the problem within a single parliament.

So welcome back housing. We look forward to the billboards gracing our streets once again with promises and hopes of “building a better future” for a “home of their own”. But just make sure you come prepared with real answers.


 

Adam van Lohuizen
 
Adam is Senior Economic Analyst at Shelter

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By Adam van Lohuizen

Wage against the machine – the tale of the first time buyer

We all know that there is a housing crisis in England, that we aren’t building enough homes, that house prices are expensive, and that it’s difficult and costly for first time buyers to realise the dream of owning their own home.

But exactly how expensive are house prices now for first time buyers? It can be a difficult question to answer, but we’ve calculated that the average house price in England is £76,873 or 38.8% more than it should be. And that’s only for the increasingly small group that can still afford to buy a home. For those on average incomes that have been priced out the gap would be even bigger.

So how did we come to that number? The ONS publishes data on house prices, mortgage size, and incomes for first time buyers going back to 1969. Using this, we can see that house price and income growth broadly tracked each other between 1969 and 1997.

Average house prices, mortgages, and income for first time buyers in England 

But since 1997, house prices have shot up well above incomes, to an increase of 48 times since 1969, compared with just 29 times for incomes since 1969. If house prices for first time buyers had only increased like their incomes, then the average first time buyer would have paid £121,166 for their home in 2013 instead of £198,039.

Across England, homes for first time buyers are between 30% and 40% more expensive than in 1969. First time buyers in London pay an even greater premium, with homes being 41.8% – or £139,203 – more expensive.

Average house prices linked to incomes – 1969 to 2013

Declining affordability has seen first time buyers’ incomes rise above average wages. Since 2004, first time buyer incomes have grown at almost three times the pace of the median income for 22-29 year olds, indicating that average income earners have been locked out of home ownership.

First time buyers and incomes in England/United Kingdom– 2004 to 2013 

This is supported by the latest English Housing Survey, which shows how home ownership amongst younger age groups has fallen dramatically, implying that first time buyers have been getting older.

Rates of home-ownership by age – 1991 to 2013-14 

But age and incomes aren’t the whole story. First time buyers now borrow more – much more. For three decades, first time buyers borrowed around double their annual income to buy their first home. But this quickly changed, jumping from 2.4 in 2001 to 3.1 in 2004, and has remained around three times income ever since.

Loan to income ratio for first time buyers in England  

So how could they afford these much bigger mortgages? Apart from having to earn above average income in order to be a first time buyer, the long-term cost of debt has also fallen, allowing home buyers to borrow more.

Loan to income ratio for first time buyers in England and the Bank Rate (inverted) 

On top of all of this, first time buyers now have to save much bigger deposits. Between 1969 and 2002, first time buyers had an average deposit size of just under half their annual income, and only one quarter in 1996. But between 1996 and 2004, there was four-fold increase in the average deposit size.

Percentage of annual income required for deposit for first time buyers in England

So what does this all mean for future first time buyers? Interest rates are at all-time lows, and are now expected to increase. Future buyers won’t enjoy the long-term falls in interest rates that we’ve observed over the past three decades, whilst carrying much higher levels of debt. Unless houses become cheaper or incomes rise significantly, middle income earners will continue to be locked out of the housing market.

So how do we fix this? We need to build more homes. If nothing is done and house building stagnates, home ownership will remain nothing more than a dream for most, and a reality for only a lucky few.

 
Vicky is a Policy Officer at Shelter

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By Vicky Pearlman

Legal Aid changes found unlawful

 

In a judgment handed down this morning, the High Court has ruled that regulations brought in by Chris Grayling, the Lord Chancellor, in April 2014 to cut legal aid funding for judicial review are unlawful.

This is a significant decision for homeless families in the most dire of circumstances, who could now get legal aid to challenge unlawful decisions and get the support that they need. More details on both the case and the judgment can be found here.

As we have explained previously, homeless families are usually entitled to some sort of assistance from the local authority. But they are sometimes wrongly told that no further help is available. It’s then that they often turn to Shelter or other legal advisers for help.

At this point, homeless families have already hit rock bottom. When a council fails to meet its legal duties towards them, judicial review is often the only safety net they have left. With legal aid to pay for advice, unlawful decisions can be challenged to get a roof over their head. 

The Government’s decision to restrict legal aid for Judicial Review challenges of decisions made by public bodies (including local housing authorities) has made it increasingly difficult for families facing eviction to get the legal advice they need to make their local council fulfil their statutory duties to help them. We see cases, on a daily basis, in which housing and social services have failed to properly assess the needs of homeless families, leaving them in miserable and dangerous situations when the safety net should be kicking in to help them back onto their feet. We know families who have slept rough because they have been refused the assistance to which they are entitled.

Sara was undergoing treatment for cancer when her landlord decided to sell the home she was renting with her husband, making them homeless. Their local authority refused to provide temporary accommodation on the basis that Sara was not ‘vulnerable’ because her husband could care for her. Despite medical evidence that she needed to be somewhere warm and dry and that, if she was on the streets, she was very likely to get an infection, the local authority still did not change their position. Only when faced with a judicial review and court action did the local authority back down and agree to accommodate the couple.  

The changes to legal aid meant that it was far more difficult and risky for Shelter and other legal aid solicitors to take on a case in the hope of getting a speedy resolution for the family. The regulations, which have now been declared unlawful, there was no guarantee that the work undertaken by Shelter, in preparing the claim for judicial review and negotiating with the local authority, would be paid for. We can, and do, use some of our voluntary income to do this, but we cannot fund it all. The work takes up a great deal of time but, with the support of Legal Aid, we can often achieve a successful outcome for the family.

We try not to resort to judicial review. It is far better to negotiate with the local authority before court proceedings are issued – but negotiation is often only possible if the local authority knows they could be held to account through judicial review. This is key: evidence gathered from Shelter services showed that, in the first quarter of 2014, our solicitors and advisors successfully used the threat of judicial review more than once every working day in order challenge decisions made by local authorities, helping to prevent people from becoming street homeless.

In challenging the regulations, the claimants (represented by the Public Law Project and Doughty Street Chambers) were concerned that the financial risk introduced by the regulations would have a ‘chilling effect’ on access to justice for vulnerable clients because they could no longer find solicitors able to take on their case. They challenged the lawfulness of regulations arguing, amongst other things, that they were inconsistent with the law governing entitlement to legal aid.

In today’s judgment, the High Court has found that the impact of the regulations go far further in restricting legal aid for judicial review than was intended, which makes them unlawful. This is a hugely important step in ensuring that people like Sara get the help that they need to challenge badly made decisions by public bodies and prevent them from becoming street homeless.

John Bibby
 
John is a Policy Officer at Shelter.

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By John Bibby

Why England can’t just ‘get used to renting’

The proportion of people who own their own home is continuing its rapid decline across England – the new English Housing Survey makes that absolutely clear. But just as home ownership rates have slid there’s been an increasing preponderance of people (normally home owners) to ask why we should be bothered. Isn’t England’s obsession with ownership an unhealthy one, in any case? Shouldn’t renters just pipe down and get used to renting as the new normal? People do it in Europe, after all.

It is very convenient that the unequivocal answer to this question can also be easily found in the English Housing Survey headline report as well – it’s your one-stop-shop on this topic.[1]

Never mind the fact that most people in England want to own the home they live in. Never mind the fact that renters aren’t able to invest for their later life and the substantial implications for wealth distribution. The survey makes absolutely clear that private renters get a raw deal in comparison to owners today. They pay high housing costs and in return live in worse conditions, with more damp, more unsafe hazards, smaller, more overcrowded homes and less security.

But don’t just take my word for it, here are the facts. Let’s start with conditions. In spite of improvements across all tenures, almost 30% of all private rented homes fail the government’s decent homes criteria, compared to only 20% of owner-occupied homes.

 

This is because 16.5% contain hazards that make them dangerous to live in and 13.4% can’t be heated well. But they’re not just more dangerous and colder, they’re also more likely to be damp:

And smaller:

And more overcrowded:

Still, at least private renters are settled in their home, right? Wrong.

Over a third have been in their home for less than a year and 55% less than two. Only 20% of private renters have been in their home for longer than 5 years compared to almost two thirds of owner occupiers. Sure, there are many reasons that renters might have moved (not least to escape dangerous, damp or overcrowded homes), but this is substantial instability and churn.

Which brings us neatly to rents. Moving more often as a private renter means that you end up paying higher rents:

And as more people move into private renting, rents continue to rise:

We’ll have to wait for the household report of the English Housing Survey to see how much more of their take-home pay renters forked-out in rent than owner occupiers paid in mortgage costs in 2013/14, but with interest rates at rock-bottom and rents continuing to rise, it’s a safe bet that renters are paying well over the third that is normally thought to be affordable.

So all in all, if you are in one of the 480,000 households that started private renting last year, including the 170,000 who used to live in a home they owned, the likelihood is you’re getting a rawer deal than an owner; that seems pretty clear. The question is what to do about it – and the answer is twofold.

We need to build the new homes that ordinary families will be able to afford to buy and social rented homes that those in housing need can rent. But we also need to dramatically improve the deal private renters get now, to improve conditions, give renters better stability and improve affordability. This is because, with levels of building still in the doldrums and house prices cantering out of reach of many families, it’s clear the number of people renting is going to continue to increase. And it’s not good enough to dismiss renter’s worries as an outdated obsession with ownership. Private renters are getting a genuinely bad deal, the response must be genuine improvement.


[1] It’s absolutely vital that government proposals to axe it next year are canned for this reason alone.

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

Starter Homes: giving with one hand…

Update 04/02/2015:

Inside Housing are reporting that Starter Homes will count as “affordable housing” and can therefore directly replace social housing or shared ownership homes on planned developments. This is extremely concerning if true.

New ‘Starter Homes’ will cost up to £450,000 in London and £250,000 outside, which is 11.5 times the average full-time London salary and 9 times the average full-time English salary. While there is clearly a need for more homes at all prices – and for priced out first time buyers – these should not be cannibalising genuinely affordable housing.

This change will be a major blow to genuine affordable house building, as a large proportion of affordable homes built (62% in 2010/11) are secured through planning agreements with private developers. At a time when new genuinely affordable housing is desperately needed, Starter Homes should be additional to affordable housing supply, not instead of it.

………

Under successive governments, we’ve had endless house-building initiatives, endless repetitions that “we need to build more homes”, but we haven’t yet seen a credible, long term plan from a government to actually build the homes we need. Politicians of all parties need to put together a bold plan to build 250,000 homes per year in England, or families will continue to be priced out.

Today’s initiative is from the Conservatives, who are pledging to double their Starter Homes scheme for first time buyers, from 100,000 new homes in the next parliament to 200,000. They’ve also announced that the homes will be sold at prices capped at £250,000 outside of London and £450,000 in the capital.

Is this new scheme going to break the decades-long deadlock on house building?

Our main concern from today’s announcement is whether these Starter Homes will be built in addition to existing plans, or whether they will actually cannibalise planned affordable housing. The BBC are reporting that developers will be able to swap affordable housing for Starter Homes on their existing and future plans. Not only would this mean that many Starter Homes won’t be additional (they’ll just be instead of homes that would have been built anyway), but it also swaps a low rent or shared ownership home for a home costing up to £450,000 in London. That’s more than 10 times the average salary in London and even outside, it’s more than average house prices in almost every region.

This would be a massive shift. Instead of councils being able to negotiate genuinely affordable, low rent homes from developers – they would be able to build homes for sale, albeit ones with a discount.

In the most recent year with data (2010/11), the majority (62%) of affordable housing built was from these sorts of planning agreements with developers. If this new proposal simply swaps these low rent and shared ownership homes for much more expensive Starter Homes then people struggling with their housing costs will be worse off, not better.

Fundamentally, you can’t solve a housing affordability crisis by attacking affordable housing.

We need clarification from the government that Starter Homes cannot be swapped for low rent or shared ownership homes on mixed sites. They should be additional to affordable housing delivery, not instead of it.

There are other major concerns with today’s proposal. As well as stripping out payments for genuinely affordable housing this strips away funding for local infrastructure, like road improvements, healthcare or community facilities.

We’ve found consistently that the biggest barrier with the public accepting new homes near them is if they think that the homes won’t come with decent local infrastructure. People are rightly worried that the schemes will add pressure to their services rather than relieve them.

As well as it being wrong to house people in places without decent local infrastructure, there’s a risk that these Starter Homes will become associated with bad development in the public’s mind – leading to even more opposition in planning committees.

Rather than endless gimmicks, we need a comprehensive approach of reform and investment.

Parties need to put their money where their mouth is and invest in affordable housing and infrastructure, but also make long term reforms to get the private industry, councils and housing associations turning out many more high quality and affordable homes than they can now. Otherwise, the housing shortage will be on the political agenda for years – or even decades – to come.

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