From benefits to bricks: how Shelter is campaigning to tackle the housing crisis

 

With Britain in the midst of an escalating housing shortage, Shelter’s Senior Policy Officer, Pete Jefferys, uncovers the issues behind the crisis and explains how Shelter is campaigning for change to help build the crucial affordable housing of the future.

Pete Jefferys is a Senior Policy Officer at housing and homelessness charity Shelter.

Pete Jeffreys

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The problem we have at the moment, in our view, is that Britain hasn’t been building enough homes for the past 30 years. That’s having an effect on individuals, communities and businesses.

We have a growing and ageing population and one in which we have higher divorce rates than we used to. People are also living longer and we have a reasonably high rate of immigration.

In order to keep up with demand, we believe that about 250,000 homes need to be built in the UK every year, and we also believe that 50% of those should be affordable homes. We simply haven’t been meeting that need.

The effect on communities and businesses

There is also the problem – particularly in London and the South East – of too much money flowing into the housing system in terms of speculative investment. People are buying property simply to make money selling it on as house prices rise, which is in itself contributing to rising prices.

In London, the average house price is now over £500,0001. One in four adults under the age of 35 now lives with their parents, with affordability as the single biggest reason2, and more and more people in their 30s and 40s are finding themselves renting because it’s too expensive for them to buy their own homes.

The housing crisis is also having an impact on businesses. If people want to own a home and it’s simply not feasible in a given area, they may simply opt to live elsewhere. This is starting to make it really difficult for some companies to recruit at mid-management level. We’re hearing from many businesses that housing is one of their main recruitment issues.

A right to buy?

Since 2012, when the government reinvigorated the Right to Buy scheme, only one home has been built to replace every nine sold off.3 Whenever someone buys a home through this scheme, there needs to be a genuinely affordable home built to replace it.

You’re not going to solve the affordable housing crisis by selling off affordable homes. If this trend continues, there is cause for serious concern. The UK is going to be losing affordable housing at a time when people need it most.

Priorities for the future

From our analysis, there are three main issues that need to be addressed.

The cost of land.
The UK is not making enough land available for housing and, because it’s so expensive, this is affecting the financing of affordable housing in particular.

We propose using the planning system to set out what land can be used for at the outset. This would bring the cost of land down and support good quality, affordable housing – a system that has been used successfully in countries such as Germany and The Netherlands.4

Replace benefits with bricks.
The majority of government spend on housing now goes towards housing benefit.5 While housing benefit is necessary; we need to start shifting investment back into building to tackle the problem at its source.

Local powers.
Consideration needs to be given to the ‘who’s in charge’ factor. We believe planning needs to take place at city level – we want cities to have much more power to be able to build homes and bring forward land, and channel funds to solve their own housing problems.

Housing Associations: funding a vital resource

Housing Associations need to be given the space to focus on building genuinely affordable homes. At the moment they’re facing both the Right to Buy scheme and also the government’s cuts in social sector rents, which is a huge hit to their balance sheets.

“Housing is one of the most basic human requirements – but that doesn’t make it simple.”

Many are responding by saying that they’ll need to stop building as many homes, particularly social housing. Housing Association borrowing has traditionally been through bank lending, but larger associations have more recently developed bonds as an alternative finance route, and we encourage innovative thinking in this space. But the crisis needs a national response. We want the government to back Housing Associations with investment and land, rather than make it harder for them to build genuinely affordable homes.

There is a risk that these associations become very similar to commercial developers and focus on building market housing much more than affordable housing. Their purpose is to provide homes for people who can’t afford the market, and if they lose that purpose then a vital role within the housing sector will be lost.

The cost of bricks and mortar

We’re campaigning for the government to maintain, and ideally increase the current housing budget. For homes to be built in the numbers required, the government has to put its money where its mouth is. The housing budget was cut by 60% in 2010, and if it’s reduced any more it’s going to be close to impossible to build the genuinely affordable social housing that is so desperately needed. Not only that, every £1 invested in house-building leads to £3.51 going back into the economy, so the benefits are broad.6

Housing is one of the most basic human requirements – but that doesn’t make it simple. It’s a complex challenge, but not an impossible one. We’ve done it throughout history – not that long ago we were building 300,000 homes per year – and other countries throughout Europe build enough homes for their population. We just need the support and the resources to get on with it.

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