There are today 1.7m households on social waiting lists, yet the government’s focus is on creating a mini-housing boom through its Help to Buy scheme.
There are today 1.7m households on social waiting lists, yet the government’s focus is on creating a mini-housing boom through its Help to Buy scheme
There are two housing systems in the UK receiving different rhetorical and real terms treatment from the government and the media.
The first is the cossetted home ownership sector which receives billions in subsidy and is promoted as the ‘natural’ tenure for the UK’s ‘strivers’. Over the fence, there is social housing, which is gradually being whittled away through under-investment and sales and portrayal of its tenants as skivers and scroungers.
Both approaches are contributing to a growing housing crisis in the UK, which seems to have passed the government by in its quest for a pre-General Election feel-good factor. There are today 1.7m households on social waiting lists, homelessness has grown by 68 per cent since 2009 and last year’s house building figures were the lowest since the Second World War – and 45 per cent down on 2008 when the financial crisis hit.
Yet the government’s focus is on creating a mini-housing boom through its controversial Help to Buy scheme which subsidises deposits for new home ownership entrants into and via its ‘rejuvenated’ Right to Buy for social tenants.
Help to Buy seems to be playing a major role in soaring house prices. According to the Office of National Statistics, house prices have increased by 8 per cent in the year to March 2014. They are increasing strongly across most parts of the UK, with those in London showing the highest growth, at 17 per cent. Prices paid by first-time buyers were 10 per cent higher than in March 2013, reflecting the inflationary influence of the Help to Buy scheme.
The scheme, despite helping the lucky few, worsens rather than tackles the underlying affordability problem in the UK’s housing market.
Already, the ratio of the average house price to average income, at 6.7, is heading towards that recorded in 2008, at 6.9, despite four years of housing market stagnation. The affordability crisis in London is even more pronounced with house prices averaging 9.7 times average incomes. The home of the Russian oligarch – Kensington and Chelsea – has a house price to income ratio of 27:1.
Even David Cameron is considering making changes to his chancellor’s favourite scheme in the wake of criticism by governor of the Bank of England Mark Carney, who called into question Help to Buy’s longer-term sustainability if interest rates need to rise.
Alongside this, social housing sales are on the rise again through massive increases in discounts to tenants wishing to buy. The 11,000 sales in 2013/14 were double those of the financial year before. Most commentators accept that the promised one for one replacement of sold social homes is unachievable. Rather, the ratio is closer to one replacement for every seven sold, reducing the social housing stock still further.
What’s more, replaced social homes are being re-designated as ‘affordable’ homes with rents up to 80 per cent of market rates. This deepens the UK’s affordability crisis and adds to a housing benefit bill heading towards £25bn per year. So the Right to Buy is eroding social housing through both sales and by re-badging replacements.
A far saner and economically more rational housing policy would be to invest directly in bricks and mortar, especially in the social housing sector, to bridge the gap between the 250,000 homes required annually and today’s 110,000.
This is why SHOUT, a new campaign to save and expand social housing, has been created by a number of senior figures in UK housing and is supported by progressive politicians in all major parties. SHOUT’s manifesto will be launched at Parliament in mid-June. SHOUT also seeks to combat the often derogatory way in which social tenants are portrayed by some in government and the popular media.
Such campaigns are now necessary if more productive and less ideologically-driven housing policies are to prevail in the UK.
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