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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

Housing in England: three things you should know

Housing remains a top five issue of concern for voters: above crime, education, Europe and pensions. Will it stay there? Today, the government published its full annual research report into the state of housing which may provide us some clues. Here’s three things you should know:

(1)   The big switch

One big macro trend in housing is often reported to be the relative boom in private renting compared to the relative decline of more secure, affordable rented homes (like renting from a council or housing association). Almost four million households are now private renters – which gets close to 10 million people in England – so this really is significant.

However, as you can see from Figure 1.1, the trend within home owners is just as interesting. The number of ‘outright’ owners who have paid off their mortgages has risen just as the number of those buying with a mortgage has declined.

The result of this across the country is a growing number of two groups:

  • Asset owners with very low or negligible housing costs.
  • Non-asset owners with higher housing costs.

This is a big structural shift from where we have been over recent decades, when the story was the rise of ownership with a mortgage.

(2)    Going with the flow

The most interesting graphic in the English Housing Survey is the tenure ‘flow chart’. While it looks scary, it tells a hugely interesting story about the state of housing today. The numbers on the chart are thousands of households and the flows are representative of what has happened to households who’ve changed their tenure (or become a household) in the last year.

So what’s the story? Well, I think what’s most interesting is the fact that the flows between the private rented sector (PRS) and owner occupiers are equal. You might expect more people to be going from renting into owning a home but that’s not been the case over the last year. This could be a story about owners losing their homes after falling into arrears, but repossessions are (historically) quite low. Instead it might be people who are renting out the home they own and going into the PRS themselves. This could be due to not being able to afford the next step on the ladder after starting a family, with three beds proportionally much more expensive than two beds.

Also of interest is that the scale of churn within the private rented sector, with around one quarter of all households in the PRS having moved in the last year. Great business for letting agents, less good for landlords who might have voids and renting families who need stability.

(3)    The enormous income vacuum

Perhaps the most important data in the government’s survey though is on the affordability of homes. The survey tells us that private renters spend a gigantic 40% of their income on their rent (47% before housing benefit), compared to 20% of income on mortgage payments for owners.

If private renters paid the same rent as social renters, then private renters would save £2,860 per year on average each. Across all 4m private renting households, that’s a staggering £11.4bn per year extra rent being paid, compared to the social rent median.

If you want to increase the spending power of millions of middle and low income households, then finding a way to reduce their weekly rent payments (such as building more affordable homes) would be a good place to start.

In conclusion…

Despite the housing market “recovery” (i.e. rising house prices), the big fundamental, structural shifts in England’s housing look unchanged. More and more households are renting privately and among those who can own, the trend is towards the outright owners and the decline of the mortgagee. The private rented sector is sucking in most new households and – despite perceptions – there are just as many households going from ownership to the PRS as vice versa. Finally, the disparity between the impact on household finances of being an owner and being a private renter is huge. It’s a big deal for the economy more broadly too, as a growing number of families find there’s very little left over once the rent has been paid, with a dampening impact on consumer spending.

It looks like housing won’t drop out of the biggest issues of concern for the public any time soon.

 

Steve Akehurst
 
I’m a Public Affairs Officer at Shelter, and work on getting affordable housing up the political agenda. I’m particularly interested in how housing relates to living standards in the UK. Outside of work, I enjoy reading, writing and putting in painfully mediocre 5-a-side performances.

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By Steve Akehurst

Housing in the reshuffle: big shoes to fill, and an even bigger challenge

Yesterday’s reshuffle was a mixed bag for housing: the good, the bad and the unknown.

On the positive side of things, the housing portfolio was combined with planning and returned to Ministerial status – after being demoted to Undersecretary level last year.  This starts to reflect how important housing has become as an issue to voters and politicians alike.  Housing is now consistently a top 5 voter issue (YouGov) and for the first time in years it looks like it’s going to be a big issue at a general election.

It’s little wonder why.  On the same day as the reshuffle, new research by the IFS that showed home ownership among young people has halved in the last twenty years. And it’s only going to get worse on current trends. This is worrying not only those affected, but their parents too.

Less good was the loss of Nick Boles, a Planning Minister who had shared Shelter’s understanding of those affected by the housing crisis and some of the possible solutions for tackling it.  Boles has been one of the best allies those affected by the housing shortage have had in government in recent years. Though we didn’t always agree with him on everything – we’ve always said solutions need to go beyond planning reform alone – he grasped the urgency of the housing shortage and its consequence for the aspirations, security and wellbeing of an entire generation – and he made the argument in those terms. Often against pretty entrenched vested interests.  It’s a shame this fight seemed to take its toll.

We also lost Kris Hopkins from the housing brief, who stays within CLG but without the housing portfolio.  Again, we haven’t agreed with Mr Hopkins on everything, but it was under his stewardship that improving private renting has risen up the government’s agenda. He has initiated impressive reforms that we are optimistic will continue to flourish.  In particular, it has been during his time in office that the government has started to consider introducing a ban on ‘revenge eviction’ – where renters who report poor conditions to their landlord or local authority are served an eviction notice.   There is now a Private Member’s Bill on the cards that could change the law to introduce this ban: a change that would improve the lives of hundreds of thousands of private renters.

Which brings us to the unknown: Brandon Lewis, our new Minister of State for Housing and Planning.  He has already been working within the Department for Communities & Local Government, so he should be familiar with the issues.  But even so, he will need to get up to speed quickly.  He faces a housing shortage that is reaching crisis point – if nothing is done, half of all under 35s will be living in their childhood bedrooms by 2040 – and yet CLG’s own figures predict a drop off in the number of new houses built next year. We’re still not even building half of what we need.  Furthermore, he is responsible for oversight of a private rented sector in which a third of all homes fail to meet his Government’s own standards, and a third of all renters are on 6- or 12-month contracts.

Mr Lewis might also have to contend with increasingly disgruntled councils who will find themselves with less and less money available over the next few years to help those in dire need of housing support. Big problems lie ahead as the funding for Local Welfare Assistance Schemes is being scrapped next year and the future of Discretionary Housing Payment funding is worryingly unclear.

All in all, there can’t be many more urgent areas of policy facing the next 10 months of this Parliament.

It’s just as well for Mr Lewis, then, that help is at hand.  Shelter have worked with KPMG to provide the blueprint he needs to start building the homes we need.  We’ve also set out how he can make the private rented sector more stable and improve conditions for those living in it.  And we’ve even given some thought to how the welfare state can be reformed to help everyone in housing need.

The new Housing Minister has a lot on his plate, but also a huge opportunity to make progress on one of the biggest issues of concern facing voters, and get credit from them for doing so.  As ever we’re standing by to help.

Toby Lloyd
 
I'm Head of Policy at Shelter, and have worked on housing issues in the public, private and third sectors for nine years. I'm a Londoner, a cyclist, father of two young daughters and member of the Hackney Co-housing Project.

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By Toby Lloyd

Nostalgia for the 1930s

The BBC ran an interesting documentary on house building a few weeks back, which you can watch here. As it was a prime time discussion of why we don’t build enough homes I hardly want to complain – but there was an element of received wisdom to it which did annoy me slightly.

While it did explain the central problem of land in house building (and how land is different to other commodities) and why the volume builders’ model will struggle to ever meet housing need – it fell into the common trap of idolising one bit of the past: the 1930s.

The programme told us that in that decade small private builders were free from all planning restrictions to build high quality, spacious family homes for everyone. It was a time when the middle classes were unshackled from rented housing to own their homes. It was freedom personified and everyone loved it.

Of course, many commentators idolise the house building programmes of late 1940s or 1950s, depending on their political allegiance. But the 30s seems to be the connoisseur’s golden age, a period which can safely be eulogised without fear of contradiction. No doubt this is partly because the 30’s were longer ago, and on the other side of the great psychic rupture of the second world war: few people now have any direct knowledge of the time, and even ‘historical series’ data sets tend to start after 1945. I suspect the decade of the National Government also appeals because – despite the intense political controversies of the time – it is not claimed by either left or right as part of their political identity.

There is much to look back on with envy. The 1930s was the undisputed high water mark of housebuilding, with private firms alone building over 250,000 homes per year in England. By 1939, one in three households lived in a home less than 21 years old.

(Tom Chance’s graph, combining two not-entirely comparable sources: like I said, the data sets break with the war)

So why do I reach for my revolver when I hear the 1930s eulogised? The problem is two-fold. Firstly, there are often some lazy assumptions about what was really going on then. It’s true that the private sector built far more than it does today, and that the national planning system had not been created. But that doesn’t make the 1930s a free market paradise. There was planning – it was just rather patchy and inconsistent. And the public sector played a huge role, building more than 50,000 homes a year. In fact, it was public investment in new council housing following Lloyd George’s ‘homes fit for heroes’ campaign after WW1 and Addison’s Housing Act 1919 that kick started the interwar construction boom, and then sustained it.

And as Brian Greene points out, market conditions were radically different then: there was a huge amount of capital saved up in building societies while international capital movements were heavily restricted. Millions of people who had grown up in private rented homes, often a family to a room, were keen to use that cash to buy a home for the first time – and there was little or no chance international investment money would beat them to it. As a result, single-earner families could buy a family home with a mortgage of three times an ordinary worker’s salary. This is not a situation you can readily compare to today, to put it mildly.

Secondly, yearning for the 1930s ignores how utterly unrepeatable they were. London, Birmingham and many other cities more than doubled their footprint in that decade. Much of the growth was in low density suburbs enabled by the rise of the automobile, and which now present a serious challenge to economic and environmental sustainability. It was precisely in reaction to this sprawling of our cities that the 1947 planning system was created. That bête noir of frustrated liberalisers today – the Green Belt – was designed to prevent our cities doubling or tripling every decade, for the good of the cities themselves as much as to preserve the countryside.

The lesson I want us to learn from the 1930s is that we can build far more homes than we do now, by supporting a mixed economy of public and private investment. But we can’t do so by simply spreading our cities out in every direction and expecting everyone to drive great distances to get anywhere. We learned the importance of intelligent planning from the 1930s. Let’s not forget it now.

Deborah Garvie
 
I’m a Senior Policy Officer at Shelter, working on the Localism Act and policies for the delivery, letting and management of social housing. I started off in Shelter’s Campaign for Bedsit Rights, publishing research on the appalling living conditions of refugees and successfully campaigning for legislation to license private landlords and protect deposits. My work is informed by the years I worked with tenants as an inner London housing officer.

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By Deborah Garvie

Hope for homeless families in need of Legal Aid

While today’s news agenda is dominated by the Cabinet reshuffle, news from the courts has given us at Shelter cause for a big sigh of relief.  This morning, in response to a challenge brought by legal charity the Public Law Partnership, the High Court has ruled that Government changes, which would have left homeless families without help, have been ruled ‘unauthorised, discriminatory and impossible to justify’.

Regulations introducing a residence test for civil Legal Aid were aimed at preventing those who could not prove that they had been lawfully resident in the UK from receiving Legal Aid.  The test would withhold Legal Aid from recent, lawful migrants and irregular migrants.  It would also catch British nationals, including children, born and living abroad, along with people unable to prove past residence, including women fleeing domestic violence, victims of trafficking and families with pre-school age children.

Every week, Shelter advises families who are facing homelessness, destitution or the possibility of children being taken into care because local authorities are unwilling to comply with their duties under the Housing Act 1996 or the Children Act 1989.  We often encounter people who have been lawfully resident in the UK for years, but who don’t have the documents in their possession to prove their status. The most common examples of this problem occur where the person’s passport and other paperwork are with the Home Office; or where a family have been illegally evicted by a private landlord and find that their personal papers have been lost or are locked inside their former home.

Legal Aid helps people like Pauline, who came to Shelter having been evicted from her private rental along with her 5 year old daughter, Melissa.  Pauline is Jamaican but was applying for leave to remain in the UK with her daughter, having fled her violent husband, a serving member of the British Armed forces.  Melissa is British and her father had a visiting order which prohibited Pauline from taking her daughter out of the country without his permission.

Following their eviction, Pauline had been taken in by friends, but they wanted her to leave. She had no money. To keep warm on winter days, she spent the daytimes at her daughter’s school or in the A&E waiting area of the local hospital.  She approached social services for assistance but they refused to accommodate mother and child together, and proposed to place Melissa in foster care, saying that Pauline could visit her there.  At this news, Melissa’s headteacher wrote a letter of concern, saying how damaging this would be to Melissa’s well-being, stating that Pauline was a very good parent who had nurtured and cared for her daughter and produced a ‘high achieving, well-mannered and motivated little girl’.  Separation would have been catastrophic for them both.

Shelter challenged the council’s decision, on the basis that they should provide accommodation and support for the Melissa and Pauline together, pending the outcome of Pauline’s application to remain in the UK. In the course of the proceedings, Pauline was granted indefinite leave to remain and became eligible for housing benefit and homelessness assistance.

But if the residence test was in force, Pauline would not have been entitled to Legal Aid to challenge the council’s decision.  This would have resulted in a little girl being taken into costly foster care while her caring mother faced destitution.

So we are incredibly relieved by today’s unanimous judgment.  Having been laid before Parliament at the end of March, the regulations are due to come into force on 4 August but require a vote in both Houses of Parliament.  Despite two Parliamentary Joint Committees expressing concerns over their legality, they were voted through the Commons on 9 July by 273 to 203 votes.  They are due for a Lords vote on 21 July and Shelter, along with over 30 other organisations has signed a joint briefing calling on the Lords to reject the regulations.

Responding to PLP’s arguments on the legality and likely effects of the regulations, for which Shelter – along with over 20 other organisations – had provided evidence, lead High Court judge Lord Justice Moses ruled that the regulations were ultra vires and unlawful because the Legal Aid, Sentencing and Punishment of Offenders Act 2012 ‘does not permit such a criterion to be introduced by secondary legislation’ and it ‘is and was beyond question that the introduction of such a test was discriminatory…indeed that was its declared purpose’ – which couldn’t be justified.

The Government had in part justified the regulations on the grounds of the cost to taxpayers, but during the House of Commons debate, Justice Minister Shailesh Vara admitted that the Government had ‘no precise figures’ to show any savings would be made from the regulations – and the court ruled that it would not be legitimate to discriminate solely on the grounds of saving money.  We sincerely hope that the Minister will now withdraw the regulations, saving many homeless families the heartache of destitution or unnecessary separation because they are without Legal Aid to help them access justice.

Zorana Halpin
 
Zorana Halpin is a Policy Officer at Shelter

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By Zorana Halpin

The Bedroom tax by numbers

Out today are DWP figures and survey results on the impact of the first nine months of the bedroom tax. Here is a quick lowdown of the key points:  

1.  The stand out headline which the BBC has run with is the sheer number of households moving into arrears. JRF’s own analysis had already indicated that arrears were going to be high but now the government’s own research confirms fears of rising arrears with a staggering 59% of people affected by the bedroom tax in arrears.  This is really worrying: we hear from families everyday facing homelessness because their debts, including rent arrears, have spiralled out of control.

2. Many of the families we speak to prioritise paying their rent even when they are struggling. They know just how important keeping a roof over their head is. What’s particularly interesting is how many households affected by the bedroom tax in and arrears are trying desperately to make up their rent shortfall. The research found 39% of those affected had paid some of their rent shortfall.  This suggests that these households know the importance of paying rent and have managed, somehow, to cover some of the gap – but simply do not have sufficient income to make up the shortfall.

3.   So what are the options for people who are unable to pay their rent? When you look closely at today’s analysis it shows that few households affected by the bedroom tax have moved. Since its introduction 22,340 households are no longer affected by the bedroom tax as a result of moving, either within the social sector, or to the private rented sector. This is equivalent to less than 5% of those affected (at December 2013). This indicates that downsizing may not be a realistic option for many.

4. What this chart shows is that over a third of households no longer affected by the bedroom tax, have been through a reassessment process which has found that they should not be caught by the bedroom tax. Some of these households will have been granted an additional room for their disabled child, something we campaigned vigorously on behind the scenes. In other cases, the size of their house may have been wrongly assessed in the first place.

5.  What this all adds up to is that the number of people actually affected by the bedroom tax is a lot lower than anticipated. The government first estimated that 660,000 households would be caught by the bedroom tax. What we now know is that the real figure is 491,741 (as at December 2013).  The government have been forced to grant numerous concessions on who should be affected in the face of overwhelming evidence of why this blunt policy is unfair.

6. It’s now clear that the government won’t save what it intended to save. It means it is unlikely to save anywhere close to its initial estimate of £445 million. JRF suggested that the real figure would be closer to £330 million based on 498,000 households being affected at the end of November. Today’s figures show even fewer people are affected meaning savings will be even less.

We are quite clear that the bedroom tax should be abolished. These latest statistics only serve to strengthen our resolve.

Penalising people for having a spare bedroom is unfair when there is no smaller accommodation for them to move into.

The measure is saving less than anticipated and the number of amendments required to make the cut fair and protect everyone who has a legitimate need for extra space are so numerous that it makes more sense to abolish the policy all together – or more families will risk spiralling into debt and arrears and face the loss of their home.

 

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