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Guest blog: Shelter's Chief Exec on the rise of unaffordable housing(574 Posts)
This week, to highlight the fact that housing is increasingly unaffordable for many, Shelter published research which showed what our weekly shop would cost if food prices had risen to the degree that housing costs have done over the last decade.
In this guest blog, Shelter's Chief Exec Campbell Robb warns that unless something changes, the next generation will find it even tougher to get a stable and affordable home.
What do you think? Are you struggling to get on the property ladder, with rising rents making it increasingly difficult to save for a deposit - or are you worried for your children's prospects? How do you think the situation could be improved? Post your URLs here if you blog on the subject, or tell us what you think here on the thread.
I think you have hit the nail there.
I think it is criminal that CPI/RPI does not take into account the inflation of hosue prices.
When you consider the three essentials:
You wouldn't consider excluding the second two from any inflation calc - but the former........excluded!
Especially as this makes up such a huge proportion fo many incomes - how have we gone along with this for so long....?
Another revolution starts on Mumsnet (Frugal February feb seems to be another one......)
I really worry about this trend (which has been going on for years now) of seeing btl properties as a viable alternative to traditional pension schemes. It will leave a great many people in a lot of trouble if there ever is a proper crash and I think is one of the reasons that the government is reluctant to introduce legislation that would lead to a correction.
Having said that, I can totally see why people have lost faith in the pension market and look around for alternatives.
We are private tenants. We cannot afford a deposit either. Rent is so much more than a mortgage, it's like throwing money away and it hurts.
I place the blame for the housing crisis fairly and squarely on this coalition govt. I am almost 70 and have never ever known things to be so bad. I think people on benefits are going to have a big shock in April with the HB changes. Also the bedroom tax means that people living in council houses or HA houses who have spare bedrooms, will only get HB for the numbers of bedrooms occupied and they won't be able to manage on reduced HB in many cases so their only option is to try and find a smaller house, but it will have to be a private rent because there aren't any smaller HA houses available.
They are pulling the rug from under any organisation that helps people on benefits (CAB is threatened with closure because LAs can no longer afford to fund them) Connexions to help young people has completely closed down and Shelter is in danger too because 50% of their funding comes from the Legal Services Commission, and they are withdrawing the entire amount because of the cuts they have to make.
I'd beter stop or I'll rant for ages...........
Just noticed Jess that you have asked how MNs think the situation could be improved - that's an easy one. Get rid of these awful posh Tory boys who are making a complete hash of the economy and waging war on the poor.
God help us all if they get in for another 5 years in 2015. They even make Margaret Thatcher look vaguely reasonable and I never thought I'd say that!
Totally agree with William. Thanks for saving me the climb onto the soapbox, because I could really go on about this. The village where my mum lives grinds to a stand-still in the winter months on account of a large share of the local housing stock being taken up by second home owners and private land lords who profit from short term summer lets at inflated priced, effectively pricing local young people out of their local property market.
Somehow I feel that there are certain things which we should not be able to profit personally from, such as the housing needs of our fellow man. It's probably my social democrat Swedish roots.
Something has to change. My DH and I both work and although we don't earn a great amount - probably about £39000 between us, we can't buy. We save every month but may be too old to buy by the time we save up the ridiculous amount that we need.
I am 40 in a week and although I would like to buy, I agree with mam29 that just having more rights as a tenant and being able to treat the house more as our own would be good. Also having a landlord who wants to look after his property instead of keeping it just above par.
We have rented in the same house for 5 years and the landlord does everything himself shoddily. We have no central heating bar 2 gas fires downstairs which I HATE as they are so old.
And we are not alone. I lecture and am head of a language department and there are other staff (educated to a high level) who are in the same position. Not poor enough to qualify for social houses but not well off enough to buy a house/flat.
I don't know what the solution is but news on the front of a newspaper yesterday announcing that yes! house prices are finally on the rise is surely not good news?
Like I posted earlier, we are currently renting at an extortionate level, we simply cannot sustain it for much longer and are grateful to be in the position that we can eventually buy on. Our landlord has two houses and the one we are living in is his' nest egg' - checked it on Zoopla - when he bought it in 2004 it cost 350,000 (it is a 3 bed town house, modern, but nowt special ), he recently had it valued at over £550000 - do the maths. A potential £200,000 profit over 9 years. After slowly getting to know the neighbours, it seems over 50% of this development are 'nest eggs'. We worked out that our landlord will be making around 25k a year in rent(IN addition to the profit on the house).
Like is posted above - we all need shelter, food and warmth as essentials, and these should be available to us all - to my mind, second homes should be taxed hard - it is simply unjust that this situation is allowed to continue unchecked.
Also tenants should have much more protection and long term rights as in other countries, the insecurity is very unsettling and scary. Thankfully our landlord is absent, it must be unbearable to be at the mercy of an abusive, greedy and uncaring one.
I'll pick up that rant and run with it NanaNina...
Although I don't wholly blame this government (and I'm a raging socialist, mind)...The housing crisis started with Thatcher deregulating the mortgage industry, and also selling off council housing and banning LAs from using the proceeds to build more. You know, I used to think that she honestly at least believed in that "bootstraps/ self reliance/ buying your own home" thing, but when you look at how the whole thing has panned out, I suspect she was just using that rhetoric to mask the grand plan- hotting up the housing market for the ultimate benefit of the bankers.
However, 13 years of Labour Government did absolutely zip-zilch-nada to address this problem. No attempts to curb the crazy mortgage lending, no mass building of social housing, no legislation to protect tenants- etc.etc. All they did was apply a band aid, by supporting the aforementioned organisations, and underwriting peoples' incomes w/ tax credits etc (and I'm a great admirer of tax credits, and will be shafted when UC comes in).
And along come the Tories and rip off that Band Aid....
We're hoping to BTL at some point, because while DH's otherwise lowly paid career (clergyperson) comes with accommodation, we'll need somewhere to live when he retires. We don't expect to make money on it...we just want to have somewhere modest paid off by the time we'll need it. Which is a long roundabout way of saying that not everyone who BTLs is privileged or views it as an investment.
Somehow I feel that there are certain things which we should not be able to profit personally from, such as the housing needs of our fellow man.
Also, re the earlier poster who mentioned trailer parks: if only it were that easy. Very difficult to get planning permission for temporary dwellings- if it was easy I'd already be living in a caravan, and not be worrying nightly about what happens if my income increases slightly and I have to start being liable for the rent in my private cottage....
(There are some trailer parks, this is true, but round here you're paying about £60-80k for what is effectively a big caravan...)
mizu our income is same as yours and like you say, we're not poor enough for help, but not well off enough to buy. With two small children I also worry endlessly about the landlord turning round and ending the rental agreement/wanting to sell/him dying and his kids wanting to sell. There is no security. Our boiler was only recently replaced because the plumber serviced the old one and found it unsafe to use. He said we were lucky to be alive and he said it should have been replaced years ago. Our landlord would have gone to prison if the worst had occurred, but fat good that does after the event.
Entirely agree there is huge problem with the (future) affordability of housing but not sure you can blame BTL landlords.
Neither myself or my husband is offered a pension through our jobs so we've invested in a couple of properties to help out in retirement. We're in our early thirties so even in the event of a crash we should still be ok as we wouldn't want to release any equity for quite a while.
Our 'home' is actually a relatively modest house in a nice village and we are by no means very wealthy, just trying to be sensible and plan for our future. Would strongly disagree with Williamina's suggestion of 'taxing the hell' out of BTL properties, how would that be fair?
It's worth pointing out that we make no where near the level of income of Guinea's landlord and are in fact probably just in negative equity on one of the properties (but get a fairly decent return on it monthly).
By the way, and veering slightly off topic, does anybody know if the Government's promise to end the 50% council tax rebate on second homes was actually upheld? Or is it yet another of their broken promises?
Part of the problem seems to be all the unoccupied properties that were bought as investments or for tax reasons and are now lying empty.
Then there are the sites with planning permission already signed and sealed, but the companies concerned are either waiting for a better time to build, in order to get more profits, or are only interested in building expensive properties for whoever can afford them.
Then there's the Housing Benefits problem mentioned above and the Buy-to-Let brigade ...
The government could, if it wanted to, solve all these problems. But in order to do so, it would have to interfere in the rights of Person A to get rich at the expense of Persons B-Z. It's not going to do that. It believes that if Person A gets rich, we all benefit. But it's not happening, is it?
And no, please no-one say we should build in our green spaces!
There are enough brown-field sites to build affordable houses on and loads of empty houses. In fact I think I remember reading about a survey carried out by Shelter into all the empty properties.
if profit on housing is no longer allowed, goodbye not only to rentals but to mortgages. That means the only way to buy a house will be with a big pile of cash.
landlords are heavily regulated - for instance there is a legal requirement for a yearly gas safety check and it is crime not to have this. So there is comeback for the person in the house with a dangerous boiler. If a tenant stops paying rent, they cannot be evicted for months. There are many other rules like this - and so there should be.
no, I don't have the answer. No-one does.
Part of the problem seems to be all the unoccupied properties that were bought as investments or for tax reasons and are now lying empty.
And, just to triple-protect these investments, the Government have just made squatting in empty residential properties a crime. (there was already legislation to protect temporarily empty properties etc.)
Which, of course, is going to result in more (usually single) homelessness, more expensive HB claims for hostel spaces, and so on ad infinitum...
If anyone is interested in joining a self-build co-op (not wielding a screwdriver but buying an eco-home ready made from a legit company) please PM me - we have 3 people so far, interested in the South West, and possibly Cheltenham and Cotswolds areas.
We are aiming for homes to cost up to £120 for 3 bed with some garden.You choose the house from a selection before it goes to final detailed planning. There has been a scheme for 'shared deposit pot' also mooted - some giving more (and getting bigger plot eventually) others less but altogether enough to secure the land and service pipes, planning and mortgage etc.
Post what you think of this idea if you ahve any experience etc.
I have several young (20s) relatives living in London, all with full-time jobs, all earning £26- £27K ish (a nurse, an IT consultant, a Social Worker, etc) - none of them can afford the huge rents they are being charged.
Two of them went to live in a licensed squat. The deal was that they could stay there rent free, as long as they looked after the place until the owners wanted to sell it. They could decide who lived there and decorate it themselves, etc. They worked really hard on it, doing it up, and looked after it really well. It was a fantastic idea, a win-win situation, and it lasted them for two or three years.
But then the owners wanted it back. They moved out, no problem, but now it's really hard for them. Anywhere near their jobs is incredibly expensive; anyway further out and the transport is incredibly expensive.
What are they to do?
The answer that they are going to come up with, sooner or later, is leave. Go somewhere else. Like Canada. According to that new banker person, Ontario is one of the cheapest capital cities to live in.
I feel very sorry for everyone who wasn't in a position to buy somewhere decades ago. Rents are at sky-high levels, buying is unaffordable, wtf are people supposed to do? Shelter is an essential, yet we have an entirely dysfunctional ;market' that is doing no-one any favours. Except speculators and the super-rich, I guess. Housing should be for people to live in - decent, warm, affordable. Making money out of it should be a secondary consideration.
Ideasfactory - great idea!
I think shared ownership sounds good too.
About older people, I have some friends in their 80s in the US and they all worked together at the same university. Come retirement time, they all clubbed together and live in some sort of shared housing scheme with wardens and gardens.
I think the stats show that there are more single people than ever before, but it's hard to see how they will be able to live alone when they are old, unless it's in tiny boxes.
Oh and <bee in bonnet time> someone tell the builders that we need light and air and space in our houses. Two square metres for a family of four with tiny windows that are so high up you can't see out of them won't do!
I agree with Stubborn - the foundations for the housing crisis were laid by Thatcher, but blame should not only be put on the Tories. We have been badly let down by all political parties.
I don't think that taxing BTL owners is the answer - and such a law would never get passed. There are many reasons that people let houses - some had to move for work and let a house they haven't been able to sell.
I'd like to see tax incentives for landlords who offer long term leases - of 5 years and over.
And tax breaks for landlord who invest in their property.
Like with children - don't just penalise bad behaviour , but reward good behaviour.
The landlords must be held accountable for substandard housing and the best way to do that is very simple.
Allow tenants to deduct a fixed % for faults that are not fixed. They do this in Germany. A month without heating? You are within your rights to deduct up to 100% rental payments. It's up to the landlord. Either he fixes the heating or HE has to take the tenant to court. It is very clever as it turns the responsibility into the LL.
Reward good landlords. Penalise bad landlords.
I have the details on my blog about the empty properties - I mentioned the numbers earlier
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