And what can be done about it
We have a housing crisis. I have written about this before, but there is no harm in writing about it again.
There are basically four options for people wanting somewhere to live:
- Renting a room in someone’s home – the lodger solution
- Renting property in the private sector
- Buying your own home, or
- Renting in the social housing sector
Option 1 is good for a single person (or possibly a couple) on a short term basis. However it is obviously not suitable for families and for most people is not a good long term solution
Option 2 is becoming increasingly important. There are a lot of good points about the PRS and many of the properties are of excellent quality. However being in the private sector, rent levels are subject to supply and demand and in many places, for example, London, are becoming unaffordable.
There is also the problem that there is usually no long term security of tenure, although in fact most landlords will be happy to renew tenancies so long as tenants pay their rent and look after the property.
Option 3 is most people’s preferred option but the high price of property means that for people on modest incomes it is an impossible dream.
Option 4 is, therefore, the best chance for ordinary families on modest incomes to have an affordable home with long term security.
However this government seems hell bent on dismantling the social housing sector.
What is happening in our cities?
The main problems are to be found in big cities, in particular London
- Not enough new properties are being built
- Those which are being built are often being sold to overseas investors rather than ordinary people
- Social housing is being reduced due to right to buy – with around 30-40% of these properties ending up in the hands of private landlords
- It is increasingly difficult for Local Authorities and social housing landlords to replace the properties sold
The lack of genuinely affordable housing is going to result in real problems if there is no-where for the lower paid people who keep our cities running (such as cleaners, waiters, firemen, teachers) to live.
This is already a major problem in Oxford as well as London.
What can we do about it?
Lets take a look at the options I identified above:
Option 1 – the welcome increase in the rent a room tax allowance will encourage more people to rent out rooms in their homes – so hopefully this will increase and help ease the housing crisis by providing more places for single people to live.
Option 2 – most PRS properties are owned by ‘small landlords’ investing in one or two properties. These landlords often provide good quality homes but there are all too many problems with ‘amateur landlords’ failing to understand or comply with the increasingly complex regulation in the PRS.
There is also the problem, particularly in large cities, of criminal landlords renting out substandard homes. The main reason why these flourish is that their tenants have no-where else to go.
There need to be more professional landlords and more ‘build to rent’. Surely business can be encouraged in invest in the sector? Why is the Chancellor not doing anything about this?
Option 3 – Although home ownership is obviously desirable, in the current crisis, I think that too much effort and energy is being expended on promoting home ownership at the expense of rented accommodation. It may be a basic human right to have a home but this does not necessarily mean a human right to own it.
Option 4 – If we, the tax payer, are to fund housing in any way, I am strongly of the view that the housing our taxes fund should remain in the public sector and be available to house other needy families once the current occupiers no longer need it.
Not sold off to be a ‘windfall’ for some lucky person – who is already lucky to have social housing in the first place.
I would suggest the following:
- The right to buy should be cancelled with immediate effect
- Government should fund (or at least encourage) a major social housing building initiative and
- this should be coupled with apprenticeships and training to encourage more young people to go into the construction industry
There is also the question of empty properties – more should be done to enable these to be taken over or compulsorily purchased by Local Authorities (in a way that is affordable for them) so that they can be used for social housing.
Finally – this article in the Economist suggests that one way around the shortage of bricks and brickies is to consider alternative methods of building. ‘Pre-fab’ housing has a poor reputation in this country but some of the Grand Design programs show that actually this type of housing can be of a very high standard indeed.
What do you think about it all? What are your recommendations?