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Kate Webb
 
I am a senior policy officer at Shelter. Since joining Shelter in 2010 I have worked mainly on housing benefit and welfare reform and now suffer from the misapprehension that tapers and income disregards are acceptable topics of conversation.

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By Kate Webb

Personal safety nets no substitute for government support

How would you keep a roof over your head if you lost your job? It’s not a question many of us like to ponder (just as we tend to ignore those issues like what exactly will happen if we fail to eat five (seven?) fruit and veg a day). But it’s a situation thousands of ordinary families unexpectedly find themselves facing every year.

Worryingly, the facts suggest many of us would struggle to keep up with rent or mortgage payments if we suddenly lost our income. New research for Shelter found that four in ten families are just one pay cheque away from being unable to afford their home.

It’s not news that Britons are struggling to save, and with incomes stagnant and living costs rising for several years many of us have been dipping into our savings just to keep ticking over. But it does mean that we’re ill-equipped to deal with a sudden change in circumstances, for example job loss or relationship breakdown.

A quarter of UK workers polled by Shelter had no savings at all and would immediately find themselves struggling to keep up with housing costs if they lost their job. Four in ten could cover less than  one month’s rent or mortgage payment, rising to six in ten after three months. Just over half of people claiming jobseeker’s allowance end up taking more than six months to get back to work, raising real concerns about how long people can support themselves for.

Perhaps we don’t think so much about how to pay for our homes if we lost our income because we assume that a safety net will be there to support us if we need it. This may seem a little complacent but it isn’t entirely unreasonable. Especially as most people are well aware that they’ve paid in to a system to support them. In fact, it’s because of this safety net that job loss rarely leads directly to homelessness in the UK (a success that we’re far too modest about).

Moreover, the majority of people don’t just assume the safety net is there, they think it ought to be there. Six in ten agree that the government is responsible for providing a decent standard of living for the unemployed, which would surely require a system for preventing homelessness.

Unfortunately continued cuts to the safety net have weakened this protection and made it harder for people to keep a roof over their head. Homeowners have to wait 13 weeks before receiving any help for mortgage interest payments, and even then the support they receive may be below their actual mortgage costs. Payments to private tenants has been cut back, meaning that many people paying average rents are not entitled to sufficient support. This problem is set to get worse when the short-term buffer for new claimants is abolished under Universal Credit.

This is why Shelter is campaigning against any further cuts to the housing safety net. The support it offers is already inadequate in many cases, and any further reductions risk pushing the system to breaking point. We all want to know that a safety net is there if life takes an unexpected turn, and that safety net has be strong enough to genuinely support people through difficult times and help them back on their feet.

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

Let cities lead

When it comes to getting homes built, it really matters where powers and budgets are held.

Ed Miliband is today announcing that he would give power to England’s cities only “slightly less cautiously than the Coalition”, as Brian Groom from the Financial Times put it. Previews of Miliband’s speech in Birmingham today are suggesting that a Labour government would double the Local Growth Fund to £4 billion annually and would allow cities to bid for this pot. Housing and infrastructure is being mentioned as a major part of the deals that could be struck with cities under these plans. Reports also suggest that HCA assets and also powers to set up development corporations could also be included. The devil will of course be in the detail. As well as devolving investment budgets for housing they desperately need a boost if we are to build enough homes.

However, snarkiness aside, this is good news and the right direction for policy. For decades in England, we’ve struggled to decide the balance between local and central power. On housing in particular, there’s a natural tension between representing the views of local people such as through Neighbourhood Plans and ensuring that enough homes are built to give local families the chance of a home of their own, when others in the community oppose development. This has been an issue very much alive to the current government, with the Coalition’s planning reforms balancing community input with a presumption in favour of sustainable development under some circumstances.

We believe that local leadership is the best way to represent and address this unavoidable tension – so long as local leaders (whether council leaders, city leaders or combined authority leaders) have real budgets, real powers and also are seen locally to hold the responsibility for providing homes that local people can afford.

Other countries are often much better at this than we are. In Germany, France and the Netherlands in particular, local leaders have real responsibilities and powers to get new homes built. Peter Hall and Nicholas Falk have brilliantly captured some of the lessons on housing, infrastructure and growth from Europe’s best cities in their excellent recent book ‘Good Cities, Better Lives’. They argue that we should “free the cities” with stronger ability to fund their own development, collect revenue and in particular provide “strong planning” with cities taking a positive lead on master-planning.

I particularly like the sort of model used in the HafenCity urban redevelopment in Hamburg where city leaders took a strong lead, setting up a development corporation and launching competitions for private partners to lead on design and delivery. For building new homes, one of the best aspects of this sort of approach is that is ensures competition happens on the quality of the homes built. In England’s dysfunctional development system, far too much of the competition happens on land price alone, driving down quality (and the size of new homes) and driving up local opposition.

City devolution is an important part of any credible plan to build the homes we need and it’s something Shelter will be looking at closely in the coming months.

There is a real head of steam building behind these sorts of ideas, with Centre for Cities, Lord Heseltine and Andrew Adonis all offering new ideas. There’s much further to go, but at least we’re now debating the right issues.

John Bibby
 
John is a Policy Officer at Shelter.

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By John Bibby

Help to Buy: good for supply?

As the equity loan part of Help to Buy reaches its first birthday, and celebrates with a £6 billion extension, it’s worth reflecting on whether this flagship policy has been a success.

The equity loan has received substantially less criticism than its mortgage guarantee successor – not least from Shelter – because it is linked to housing supply by being only available on new-build homes. What ‘success’ means for Help to Buy 1, then, is both how many people it’s helped onto the ladder and how much of an impact it has had on supply.

The National Audit Office’s report on the scheme’s first few quarters in operation concludes that it’s too early to tell what impact the scheme has actually had on stimulating supply – and that even quantifying its added value will be “challenging”. “[I]n a recovering economy,” the report authors note, “developers might have increased supply anyway, or might have speeded up building stalled sites.”

But with almost a year’s data on where loans have been made, we can at least consider whether they have been directed to the places where England’s housing shortage is most acute. We might not be able to tell how much of an impact the loans have had on overall supply, but we can say whether they have gone to places where new building is most needed.

The first thing to note about the distribution of loans made under the scheme is that it is profoundly uneven, with half of them being made in just sixty of England’s 326 local authority districts.

This uneven distribution isn’t necessarily a bad thing in and of itself. The housing shortage is a national problem, but it is not experienced equally everywhere.

But comparing the distribution of Help to Buy loans to measures of housing shortage shows a troubling picture.

There is no authoritative measure of need for new homes in England, but local affordability levels – average wages compared to average house prices – provide an indicator of demand compared to ability to pay. It is reasonable to expect a supply incentive like Help to Buy 1 to be targeted at the least affordable parts of the country, where demand is higher and people’s ability to pay lower. But the trend so far has been towards equity loans being made in the most affordable areas.

Home ownership rates should also give a measure of where people have been shut out of home ownership. The lower the local level of home ownership, the greater the need for new and affordable owner-occupied homes. Mirroring affordability rates, however, in Help to Buy 1’s first year the trend has been towards loans being made where home ownership rates are highest.

The legitimate response to this analysis is that it’s too early for the scheme to have made an impact on new-build completions. In the first year at least, we should expect most loans to be taken where most homes were already being built. Sure enough, the relationship between completions in the year before the start of Help to Buy and the distribution of equity loans is strong.

But this response is far from unproblematic and raises two questions.

Why launch the scheme straight after announcing it?

If the aim of the scheme is to kick-start new building, it should have been given a lead in time so that builders could actually respond. If the equity loan scheme couldn’t be expected to have an impact on supply in the first year after it was announced, why was it launched only twelve days after its announcement? The rush to get it started has written off the first year’s impact on supply and may have wasted over £500 million of DCLG investment.

The argument that builders needed the injection of capital so that they could start new building does not stand up to scrutiny. The added confidence granted by the announcement of the scheme will have opened up access to credit necessary for increasing output for those builders taking part in the scheme.

Is Help to Buy 1 ever likely to be directed at the places it is most needed?

Relying on Help to Buy 1 to deliver the homes England needs presents more problems than just implementation. Its entire premise as a means to stimulate house building is questionable. As the NAO explain, the equity loan scheme is designed to stimulate supply by ‘generating effective demand’. But as we’ve previously written here, the private housing supply system in England is incredibly unresponsive to demand, as demonstrated by the non-existent relationship between average house prices and levels of new building.

Prices represent a measure of demand relative to supply. Economic theory suggests that where prices are higher, supply should increase to meet demand. But the English housing supply system does not respond to higher prices by building more homes. Given that private developers were already failing to respond to price signals before the start of Help to Buy, there is little reason to expect that anything will change in its second year or after.

Help to Buy 1 has managed to avoid much of the criticism of its younger sibling due to its apparent link to new supply. If that link equates to little more than a cursory nod, however, and it isn’t capable of delivering new homes where they’re needed most, it is similarly flawed.

Hannah Gousy
 
Hannah is a policy officer at Shelter

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By Hannah Gousy

Private renters, a potential political force to be reckoned with

Polling from our friends at Generation Rent has shown that 35% of private renters are floating voters, who could cast their votes on the basis of housing manifestos. The research also identified 86 ‘private renter marginals’ where private renters have the power to sway the vote. In these constituencies the sitting MP has a majority of less than 35% of the expanding renter population.

Generation Rent conclude that, if either of the two main parties were to take all these ‘private renter marginals’ in 2015, they would return a majority, making renters a political force to be reckoned with.

There is a lot that politicians could be doing to improve the lives of private renters and win these votes

Private renters want more stable, decent and affordable housing.

Our YouGov polling shows that only 1 in 10 renters’ main reason for renting is because it gives them the freedom and flexibility they want. This compares to nearly 6 in 10 renters who say that their main reason for renting is because they have no other choice – because they can’t afford a home of their own or can’t access affordable social housing.

When we asked over 4000 renters what their reasons for moving in the last five years had been, more than 1 in 6 blamed poor conditions, 1 in 8 wanted to live in a cheaper property and 1 in 20 just couldn’t afford their rent payments. This tallies with Generations Rent’s findings that two-thirds of private renters (67%) felt stuck renting because of the cost of buying, and more than half (52%) said the level of their rent was their biggest problem. 

Shelter has called on the government to take action to improve stability and conditions in the sector. For political parties, this could be a crucial vote winner at next year’s general election.

Unlocked potential

However, far too many renters are currently disenfranchised. Only 58% of private renters are registered to vote compared to almost 90% of owner occupiers.

Estimates suggest, that roughly 3.8 million potential private renter voters in England are not registered and many of the remaining 5.2 million may find they are no longer eligible to vote at the 2015 general election, because of a change in the way voter registration is done. From June 2014, everyone who has not been added to the new electoral roll using the Department for Works and Pensions (DWP) data mapping will have to register to vote individually. The Government’s trial of the mapping showed that private renters were the group least likely to be matched, and many of them therefore risk falling off the electoral roll.

The political party who makes sure these renter voters are registered, and that they turn out to vote, could have a major electoral advantage in a number of key seats.

Stable renting – a vote winner

Many would argue that it is the demographic profile of private renters – traditionally thought of as much younger than their home owning neighbours – which makes them less likely to turn up at the ballot box or register to vote. But the expanding number of families and people at other, more settled stages of their lives living in the private rented sector suggests that low voting rates are more likely to be caused by the high levels of churn among renters.

People who move more often vote less. Significantly 92% of those who have lived in their home for more than five years are registered to vote, compared with just over 20% of those who’ve been there for less than a year. Moving house means re-registration, which can all too easily slip down your to-do list. Equally, if you suspect you will only be living somewhere for a short while then you may be less inclined to invest in the area and its local politics.

The key to getting more private renters registered is longer, more stable tenancies. When we surveyed renters asking them if they’d like a longer tenancy only 4% disagreed.

Two cautions though: the model proposed cannot rely on landlords proactively offering longer tenancies, as there is little market incentive for them to do so. And whatever model is adopted, renters need to be able to give notice if they need to move on.

It’s clear, though, that making renting better has the potential to win crucial votes for whoever proposes it.  We’re looking forward to seeing every political party compete to make the best offer to private renters at the next election.

 

Zorana Halpin
 
Zorana Halpin is a Policy Officer at Shelter

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By Zorana Halpin

The ‘emergency service’ struggling to cope

As pressure on council homelessness services mount, families need legal help to stop them ending up on the street. And increasingly that is being taken away.

If you suggested to someone at random that homelessness assistance is akin to being the 4th emergency service, my guess is you would be greeted with a look of confusion.

But why? If you are homeless or are threatened with homelessness you should be able to get support from your local council, 24/7, 365 days a year.

Once a council has reason to believe someone is eligible for homelessness assistance and is in ‘priority need’ they have a legal duty to look into the case and, if needed, provide emergency or interim accommodation while they do so.

It’s also a statutory requirement for councils to provide an out of hours service. This means if a family have nowhere to stay that night but the council has closed for the day, they can get a roof over their head while the council carries out further investigations to establish that the family meet the requirements for support.

Thousands of households, many of them families with children, are assisted by councils under the homelessness legislation every year.

Like our other emergency services, the homeless legislation provides a vital lifeline to save people from dangerous and risky situations.  But there are signs that our 4th emergency service is struggling to cope:

Shelter’s housing advice services have come across cases which suggest homelessness assistance is under increasing strain. We’ve heard of families being turned away because they haven’t got the right ID. We’ve heard of families needing emergency homelessness support being treated with contempt or suspicion.  We’ve heard of physical barriers stopping people asking for homelessness support they desperately need – like out of hours telephone services which don’t answer calls, or families with literally nowhere to go being told to fill in an online form before they can even get seen.

The official homelessness statistics for the last quarter of 2013 showed that homelessness acceptances fell slightly. But at the same time more people than ever are approaching councils for help: last year that number hit a five year high. The combination of these two facts makes us worry that more people are being turned away unfairly – and adds to our utter alarm at last week’s Civil Legal Aid regulations, which come into force on 22 April.  These will make it more difficult to get Legal Aid to judicially review a council’s decision (until the applicant has received permission to proceed with the hearing).  As we’ve pointed out in a previous blog, this will make it more difficult for a homeless family, such as baby Jack’s, to get the help they need to challenge an unlawful decision to refuse assistance.

We know that local authorities are struggling to cope. We know that their budgets have been squeezed and things will only get worse when they have to find even more savings in future. At the same time, the number of people needing help is increasing and the availability of affordable housing is worsening. And now families will find it harder to challenge when they haven’t received the homelessness support they needed.

We need action to make sure councils can respond rapidly to families who have been made homeless.  This means reducing pressure by increasing the supply of genuinely affordable housing, and helping people to stay in their accommodation by keeping Local Housing Allowance in line with rents.

But crucially, it also means ensuring people have access to Legal Aid to challenge unlawful decisions that leave them at risk of street homelessness.

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