One of the reasons that housing was such a big issue in the election is that it’s no longer something that affects just a small portion of the population. All kinds of people, on middle and low incomes, are now feeling the effects even though they are working hard and might expect to be rewarded
But who are these people?
Below we have outlined a few different groups. Whatever their situation they all share the desire for a stable, affordable place they can call their own. None of them expect things laid out on a plate for them. But all are increasingly looking to government to meet their thwarted efforts and aspirations half way. To bring things to life we’ve pulled out real life examples – these are all people who have been in touch with Shelter in the last year.
George Osborne’s recent focus on housebuilding is very welcome, and some of the steps they have taken are positive. But the big decisions are yet to come – they are about what kind of homes get built or, to put it another way, what kind of people is the government going to use its finite resources and political capital to help?
These decisions, such as on grant funding, have mostly been deferred to the forthcoming Housing Bill and the Comprehensive Spending Review and are by and large in the gift of the Chancellor. It is ultimately these choice that will define the government’s record on housing in this Parliament.
So over the next few months we will checking in to see if the Chancellor’s plans really work for those looking to him for help.
The Carter family – lower income grafters
| Case study: The Carter family
Stewart and Jessica live in London with their two children, aged 8 and 9. Stewart, 43, is a salesperson in the private sector and Jessica works part time as a home carer. They privately rent a three bed house, but after paying the rent each month they struggle to have anything left to save towards their own place. “We row all the time about money, it’s the only thing we row about but it is stressful” says Jessica. “This month my mother in law had to help me out. She helped with the rent payment and even paid for a food shop. I don’t have an engagement ring or a wedding ring, my husband doesn’t have a wedding ring – we’ve sold them. We can’t even afford my children’s school photos. I go clammy just thinking about the bills”. |
These will include the kind of people Osborne sought to help through the Budget with his ‘National Living Wage’ announcement. They will typically be people who work in jobs such as retail, admin or care workers. Their parents may have been the kind of people who bought their own home through the original Right to Buy, but the shortage of stock means that there is a good chance they themselves are private renters – struggling with high private rents and often poor conditions.
Sarah and her partner – squeezed middle families
| Case study: Sarah and her partner
Sarah lives in Leicester in a 2 bed flat with her husband and their young daughter. Her husband works as an engineer and Sarah works part-time as a teaching assistant. Despite having good jobs, they can’t afford a home of their own. They rent but face problems including disrepair and instability. Sarah is worried about the impact on her daughter of constantly moving. Successive government schemes, such as Help to Buy, have not helped them as they do not have enough left over to save towards a deposit. “We’re totally stuck”, says Sarah. “It’s not that we can’t afford a mortgage, as quite honestly, it would probably be less than rent, so it’s so frustrating.” |
This group are the classic middle income group both major political parties coveted at the election. They are not rich enough to be comfortable, but they earn just too much to be entitled to social security. They are likely to have children, with one parent working part time to help with child care.
This group will take in people doing skilled manual jobs such as construction workers, mechanics and engineers, as well as people starting out in jobs nursing, teaching or lower rungs of IT and HR. If they are under 35 they will very likely privately rent, despite home ownership being obtainable to their parent’s generation at a much younger age.
Christina and her husband – priced out young professionals
| Case study: Christina and her husband
Christina and her husband moved to London in 2013 not long after graduating. Christina had secured a job in international development and her husband was setting up his own business in website design. They both lived frugally in a private rented home in South London, but soon found that they could barely afford to do anything other pay their essential living costs. To save money, they were recently forced to move into Christina’s parent’s house back in Surrey. “It was cheaper for me to commute into London for work, even though it’s exhausting”, she says. “But my husband’s hope of expanding his business in London are no longer viable due to our location”. To save their parents stress they recently moved back into a private flat share in Surrey, where they continue to struggle to save. “The hopes we had for our first few years of marriage have been set aside. We have to focus on how we will cope financially. I know there are people worse off than us, but it’s very frustrating. Something needs to change.” |
There are many people like Christina and her husband facing the same problems. Just starting out in life, these will generally be well educated graduates. They will typically be from comfortable if not affluent backgrounds. They graduated around the time of the recession but will now be in reasonable jobs in industries like media or marketing. Many will now be reaching an age where they are starting to think about settling down and having children, but wish to buy a place first. They will tend to oscillate between private renting and perhaps moving back in with the parents (or in-laws) to save money. Despite their saving this will seem a prospect that increasingly seems to get further away from them each year, no matter how much they save – especially if they live in the South East, East or South West of England. A lucky few might inherit or be gifted money, but most will not.
Neil in Essex – clipped wing singletons
| Case study: Neil in Essex
Neil is in his mid-30s and works as a teaching assistant in Romford, Essex. Neil lives with his parents because the costs of both privately renting or owning are too high to pay for on his own. “It’s much easier to live out when you’re in a relationship. Doing it as a single person is very difficult. Even after the rent you’ve got all the bills and living expenses.” |
It is this group of people, those who are saving on their own rather than a partner, who often get forgotten about but who face a challenge at least as big as anyone else. Many, like Neil, will be in their mid-to-late 30s and be earning a reasonable salary, but contemplating the possibility of long spells back in their childhood bedroom at their parents’ house in order to save up for their own place.
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These groups are on different incomes and different stages in their life. But they are all trapped in private renting, with home ownership out of reach and traditional affordable housing in too short supply to obtain.
We believe that it is vital that the Chancellor’s plans help all of these groups, rather than just a few or those higher up the income scale.
It is not easy, but with the right political commitment it can be done. It means a house building programme that includes a new generation of reformed social rented homes for those on lower incomes (with the prospect of home ownership via Right to Buy if they wish), as well as more shared ownership and many more private market homes for those on middle incomes. In reality this is the only way the hopes and aspirations of the whole country can be met, rather than just a lucky few.
We will wait eagerly to see what the Chancellor’s plans deliver.
Romford is in London, not Essex.
All legislation since Mrs Thatcher’s Right to Buy has not been designed to reduce prices as might be expected for such a vital commodity in a market driven economy. This is because many voters are sitting on lovely retirement nest eggs. But perhaps more importantly the Banks with £1.275 trillion (Money Charity) in unpaid mortgages must maintain the value of their collateral and the last thing they and their apparent stooges in Westminster can afford. In consequence house building will be kept to a minimum to avoid supply meeting demand.
If the government seriously wants to house the homeless it must persuade developers by taxing unused sites and break the monopoly of long term security now restricted to homeownership.