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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.

 

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

Six popular housebuilding policies

At Shelter we have long argued that housebuilding can be a vote winner.

We know from our campaigns that engaging the public in the problem isn’t too difficult – almost universally, they are worried about where their kids are going to live.

But when it comes to solutions, one of the things that holds housing back among political types is the belief that housebuilding itself isn’t, well, very sexy. In that hideous Westminster jargon, it isn’t much of a ‘retail offer’. As we’ve discussed before, this calculation is partly what spawned Help to Buy.

On the one hand, this is dubious. A clear majority of voters accept housebuilding as necessary for solving the housing crisis, and are sceptical of sticking-plaster solutions. That’s why Help to Buy has failed to capture public imagination.

But to be fair, this view does have a grain of truth in it. Big numbers alone (“A MILLION new homes over 5 years”, “A huge housebuilding programme and planning reform”) might be the right answer but don’t necessarily have the populist punch of, say, a promise to freeze energy bills or cut fuel duty, for instance.

Part of the problem is there is no silver bullet solution; the reasons for the shortage are ‘large and contain multitudes’, as we make clear. Structural change is needed and there is no substitute for that nitty-gritty for any party wishing to solve the problem and get credit for it.

That doesn’t mean, though, that a punchy, popular housebuilding policy isn’t also possible.

To prove this, we’ve polled some. In doing so we set ourselves a few basic criteria. As well as being popular, any solution has to (a) get more affordable homes built and (b) genuinely help those on low incomes as well as those in the middle.

We also know from other’s research that the vast majority of the public share a few common perceptions on solutions, including that they should offer the chance to young people who work and save to have some degree of ownership over their home.*

So using all this as a guide, we asked Populus to poll six possible housebuilding policies. We tested not only their support in principle, but their perceived credibility. We then asked respondents to pick their favourite, and whether they would still support that policy even if it meant more homes being built in their local area. We also put the government’s Help to Buy scheme in to the mix of options, to see how it fared.

The full results are here, but here’s a summary:

1. Rent to Buy. “Help first-time buyers avoid throwing dead money at expensive rents by building new quality homes where every rent payment goes towards owning the house”

Overall this was the most popular option we tested, with 75% net support and nearly a quarter of people picking it as their favourite. Most also said it was feasible. In policy terms, it could build on the existing ‘Gentoo Genie’ product – though it would need to be reformed to work better for those on low incomes.

2. Part buy part-rent homes. “Build a new generation of good quality ‘part-buy, part-rent’ homes. People would buy a stake in a home with a mortgage and pay an affordable rent on the remaining share. They would have the option to scale up their ownership share if their salary increases.”

This was also popular (65%), notably among Conservative voters. It was also felt to be the most credible offer – probably because it is already fairly well known, based as it is on existing shared ownership. It is something we have argued for before. However, as we noted at the time, as a product it is not without baggage and would need to be improved (issues with maintenance fees, the need to make it more affordable etc).

3. ‘New Homes Deal’. “Let young families put down roots by giving local people the chance to buy new homes built in their area before landlords or foreign investors”

Again, this performed well (78%) – especially among UKIP voters. In policy terms, however, this would be the most challenging option – it is fraught with complexity and may not get more homes built on its own. But there’s no doubting its popularity.

 4. Zero deposit homes. “Remove the need for high deposits by building quality new homes that first-time buyers can buy without a deposit” 

With deposits perceived as a big barrier to young people getting on the ladder, this had a good level of support (65%). However, it struggled for credibility compared to other options – it was seen as the least credible of our six.

 5. New council homes with the option of Right to Buy. “Help local families onto the ladder by building a new generation of quality council homes with a right to buy”

This was popular (64%), though less universally than other options – only 12% chose it as their favourite. It was, though, seen as highly credible. It could also be easily delivered through the Affordable Homes Programme.

6. Home-buyers discount. “Lower the cost of getting on the housing ladder through building homes and selling them to first time-buyers at a discount, which they would pass on when they come to sell”

This did less well than other options, mainly because it was seen as less credible – but had a good level of support in principle (65%). For more policy detail, see our blog here.

As you can see below, all of these outperformed ‘Help to Buy’ (“the government giving banks guarantees to encourage them to offer people 95% mortgages“; YouGov’s definition) – which came last on every metric we tested it against.

And all of them also broadly sustained support even when respondents were told it would mean more homes in their area.

Again, it’s worth saying there is no silver bullet to the housing crisis. We need more of all kinds of homes – and as our forthcoming policy briefing on tenure mix will make clear, this includes a sizable portion of social rented homes. But in this context there is also scope to expand and improve emerging products like shared ownership and Rent to Buy, to make them work for people on low and middle incomes. This would get more homes built, help those on low and middle incomes and should prove popular, helping to win consent for new house building.

Rather than endless tweaks to the planning system or yet another mortgage scheme, a proper ‘retail offer’ on housebuilding should and can be based on a credible offer to ordinary households that they and their children will be able to get a decent and secure home that they can afford.

If you would like to know more about our research in this area, do drop me an e-mail at Steve_Akehurst@shelter.org.uk

(* It’s worth nothing here that Shelter is tenure neutral. We’ll support any tenure that can provide safe, secure and affordable homes. Our focus here on aspects of ownership is because all the evidence tells us that, rightly or wrongly, this is what most of the public demand from housing.)

 

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

Stalling supply – and why more tinkering is not an option

The news that the long awaiting revival of house building may be stalling is deeply worrying,  but sadly not surprising.

The BBC report that a leaked document from DCLG shows the department expects “a decrease in the number of houses started this year: down from 133,650 in 2013/2014 to c.128,000 in 2014/15 (-4%).” This is despite house prices reaching an all-time high and a majority of areas in England now seeing only 1 in 10 private homes for sale affordable for working families on average income. The big picture is of course that whether housing starts go up a bit or down a bit this year, there will still be a yawning gap between the homes we need and the number being built.

Ever since the financial crisis triggered a collapse in the number of new homes being built everyone – from the government to the IMF to the European Commission – has been desperate to get construction moving again. Not only do we need at least 250,000 new homes in England each year, just to  keep up with rising numbers of households, but the prolonged slump in construction activity is seriously holding back the economic recovery. For example, last year the London Assembly found that there were 150,000 skilled construction workers in the capital who were unemployed and on jobseeker’s allowance, costing £2.1bn in benefits.

When you have a massive housing shortage, sky-high and rising prices, and unemployed construction workers all at the same time, something is clearly desperately wrong.

In recent years there have been lots of attempts to kick start a revival in building – and lots of heralding of new dawns whenever an indicator moves in the right direction. However smart market watchers like Brian Green at Building Magazine have been sceptical as to whether we really are on the road to a full house building recovery.

Sadly, the historical record backs the skeptics. After each housing market bust of the last sixty years, supply crashed and then stagnated, only rising again after years in the doldrums. Most worryingly, with every turn of this cycle the production peak has got lower and the upswing shorter.

Despite the short run ups and downs, the graph shows clearly that over time we are steadily grinding to a standstill. Meanwhile, prices continue to soar – and don’t forget that mild falls in house prices were blamed for the last collapse in supply. How can falling prices trigger building strikes, and record prices inspire stuttering increases at best?

We’ve set out our analysis of this seemingly contradictory situation in a major joint report with KPMG warning that there is no one, simple answer to the problem. Yes, the planning system is partly responsible. Yes, the near abolition of government investment in affordable homes has not helped. And yes, the link between mortgage lending, the housing market and construction is a complex one. But none of these factors alone can explain the perverse, downward ratchet in supply we are witnessing.

The hard, but unavoidable, lesson is that our entire housing development system is profoundly dysfunctional, and needs smart, radical interventions on multiple fronts. A few of these include:

  • Green belt swaps, and a wider look at the role of the green belt
  • Increasing public and private investment in affordable housing, through for instance a Housing Investment Bank. It’s worth noting the key reason for the drop in CLG’s figures is a falling off of starts in affordable homes.
  • Addressing the decline in local SME builders by getting land and finance to those who want to build
  • Using the “muscle of the state” (as the DPM said recently) to spur private competition on strategic land. We recommend that this can happen through New Homes Zones

Our full package of reform proposals is here. Some of these could help increase supply before the election, but above all what’s needed is political commitment over a Parliament at least; something we haven’t seen in a generation. Iff the next government has the courage and conviction to put it into place, we could finally turn this one around and start building the homes we need.

 

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

A bill to end retaliatory eviction

This afternoon, Liberal Democrat MP Sarah Teather presented the Tenancies (Reform) Bill for its first reading in Parliament. The bill is described as a “bill to protect tenants against retaliatory eviction; to amend the law on notices requiring possession relating to assured shorthold tenancies; and for connected purposes”.

Parliament will now debate whether to introduce legislation to end retaliatory eviction in the private rented sector.

Sarah presented the bill with the support of parliamentary colleagues from right across the house. Jeremey Lefroy, Bob Blackman, Sir Peter Bottomley, Nicola Blackwood and Philip Hollobone from the Conservative benches; Sarah’s Liberal Democrat colleagues Tessa Munt, Tim Farron and Andrew Stunell; and Labour’s John Healey, Andrew Smith and Fiona Mactaggart.

Getting a bill is an incredibly important step, which could help end this shocking practice.

How did this happen?

Sarah Teather was selected 7th (out of 20 MPs) in this year’s private members ballot. This means that she was given the opportunity to present a bill on any issue of her choosing. She picked a bill to end retaliatory eviction.

Sarah’s constituency, Brent Central, has an extremely high number of private renters. She’s seen this practice happen all too often- and has seized this opportunity to make a real difference to the 1.3 million families right across England who rent their homes privately.

As readers of this blog will know, Shelter’s ‘9 million renters’ campaign has been making a lot of noise about revenge eviction. Our advisers hear from family after family that are threatened with retaliatory action, just for enforcing their basic rights.

As well as Shelter, a broad range of organisations, including Crisis, the Chartered Institute of Environmental Health (CIEH), Electrical Safety First and Citizens Advice have been instrumental in getting the bill this far. As already highlighted, putting a stop to retaliatory eviction makes so much sense, you’d be hard pressed to find someone who doesn’t support this bill.

What happens next?

Sarah’s high position on the ballot means that parliament will have more time to debate her bill, ultimately giving it a greater chance of becoming law.

We also sincerely hope that the government will throw their support behind this bill. They have been talking about retaliatory eviction since October 2013- and they used their review of property conditions in the sector to explore possible solutions. As recently as last Wednesday, Communities and Local Government Minister, Nick Boles recognised that

Some landlords are trigger-happy in terminating tenancies, using any excuse to turf out a responsible tenant who has just had the temerity to complain about some aspect of the property.”

We still have a long way to go before this bill becomes a law. But this is a significant step. And massive thanks go to Sarah Teather, all Shelter’s staff and supporters who have campaigned against retaliatory eviction; all the organisations and local authorities who have championed this cause; and all the parliamentarians that have shown their support. Working together, we might just put an end to retaliatory eviction.

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.

View all posts by Steve Akehurst

By Steve Akehurst

England’s housing crisis reaches the marginals

With the election under a year away, strategists of all stripes will be sitting down and working through their campaign priorities for the months leading up to May 2015. I’m sure the economy, education, the NHS and crime will all feature.

But taking a look through the new research that Shelter published today, it’s going to be impossible for them to ignore housing. For the first time in a generation, the housing shortage is badly affecting the kind of areas that decide elections.

The figures look at the number of private homes for sale that are affordable to three groups: young couples with children, single people and couples without children. The report looks at the entire country, finding 80% of homes on the market are unaffordable to working families on typical incomes.

But when you pick through some of the swing seats, they are now among the worst affected. The numbers also nail the lie that this is just a London problem.

The key southern marginal of Hove, for instance, which Labour will need to win (it’s 28 on their 106 list) from the Conservatives, has just ONE home on the market affordable to the average working family. That means 99.99% of homes for sale are out of reach for ordinary families.  In Stevenage, meanwhile, just 5% of private homes are attainable to average first time buyers. In Northampton North, 85% of market homes are out of reach for average working families. In Pudsey, outside Leeds, under a third are affordable.

Meanwhile Conservative targets like North Cornwall (6.2% of homes within reach) and ‘40/40 listed’ Solihull (over 80% unaffordable) do not fare any better. Bolton West, which they hope to take off Labour, has 65% of homes out of reach. Lib Dem target Watford has 0% of homes on the market affordable to average first time buyers.

Crucially, we know even voters who own their home are concerned. They are worried about where their children are going to live, and the prospects of another era of unstable house prices. That’s why housing is now a top 5 voter issue in YouGov surveys, beating the likes of education and crime.

Polls also tell us, though, that it’s neck and neck in terms of which party voters trust most on this issue. Broadly speaking all national parties are still feeling their way around this issue, after decades of inaction and it languishing at the bottom of their ‘to do’ lists. All of which means housing is not only one of the fastest rising issues in British politics, it’s one of the few genuinely unclaimed ones.

 

 

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