Guest blog: Shelter's Chief Exec on the rise of unaffordable housing

[JessMumsnet]

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.

[wonderstuff]

It's a massive issue my husband and I both earn just above the average wage, but have no hope of getting on the housing ladder in the SE unless we inherit. We just don't have enough to save for a deposit, it feels fruitless, it would take many many years to save the required amount, equivalent to my annual gross wage, and by that time housing would have gone up again.

I wonder if drastically lowering the inheritance tax threshold would help? Inherited wealth seems to concentrate wealth in the hands of a few.

[JakeBullet]

I agree this is a massive issue.

I bought a 2 bedroom flat in 1996 which cost me £39.995. I sold it 3 years later as I moved away for £60.000 and bought a cottage for £48k...sold this for £113k which my then husband went off with......

I am currently in a 2 bedroom HA property with my son who is disabled and it's the only reason I got this. Private renting is out of the question, and as for buying ever again I know it won't ever happen.

I find it shocking that the average worker now needs to claim housing benefit in order to have a roof over their heads. This is wrong.....housing is a necessity and should absolutely be affordable for people.

[DocBrown]

We have been priced out of the village my DP grew up in and have had to move away to afford a modest three bed.

It is insane as there has been a new development in the village but the cheapest property was £485,000 - well out of our budget.

A lot of the local villagers have moved out as they are being priced out of the local housing (good links to London and SW) and the increase of second homes.

We were only able to buy in the first place because I bought a property is 1999 and sold it on and DP bought the same year (different property) and we pooled resources to fund our purchase. A friend who went to university couldn't afford to buy at the same time and was (lucky?) to get a 100% mortgage and is now a slave to it. Frightening to think how my DCs will be able to buy a house and even the price of private renting is OTT.

[MmeLindor]

Excellent blog post. I agree completely.

We moved back to UK last year after years of living abroad. The only reason we were able to buy a house was the fact that we were buying in Scotland. There is simply no way we could have moved to London / SE England.

Even then it was a struggle to get a mortgage as we had no credit rating in this country. The way in which banks decide whether to lend in UK is totally flawed, imo.

After years of lending to anyone with a pulse, they are now very restrictive.

[Kendodd]

I wonder if drastically lowering the inheritance tax threshold would help? Inherited wealth seems to concentrate wealth in the hands of a few.

Yes maybe. I'm always surprised that people foam at the mouth over inheritance tax, which imo is just a massive great windfall, and yet seem fine (!) about paying tax on money they've worked hard for and have to be very careful with. And for the people who say that the person who left it worked really hard for that money so that they could leave something for their children- no they didn't, most of the time they just benefited massively from house price rises.

[MechanicalTheatre]

It makes no sense that the cost of rent is going up so massively, which means the government then needs to fork out vast amounts of HB for people who should be able to afford a place on their own.

It is basically becoming impossible to live in London.

[MmeLindor]

Mechanical
Rents are going up cause house prices have gone up, and too many people were doing buy-to-let as an 'investment'. It totally screwed the housing market.

[BadMissM]

Yes. My OH and I at 45 have no hope of ever getting on the housing ladder. It's our second relationship, and our exs kept the houses.....

With the rents we are obliged to pay to private landlords, we will never manage to raise the money for a deposit, and even if we did, it would take us so long we would be too old for a mortgage.

Even in this small northern town, rents have risen astronomically over the last couple of years. There is almost no social housing.

I'm from London, but I had to leave because I couldn't afford to live there...soon I won't be able to afford to live here...

[Jux]

Trailer parks/holiday villages.

My SIL sold her London flat but was in a LOT of debt, so hadn't much left to buy with. She's getting a trailer and will be living on one of these sites, which has just got its licence for permanent occupation.

It is very cheap in comparison with house prices. Not good for young families, but maybe OK for young single people. At SIL's park, there are a lot of recently retired people, downsizing and investing the difference so they have something to live on other than the pitiful pension.

[morethanpotatoprints]

Where I live its possible for young people to get on the property ladder if they stay with parents, rent free until 22 or 23.
A small 2 bed terrace, which is all they need to start off is about 60 65K. But I know its nearly impossible in the south.

[MechanicalTheatre]

I know MmeLindor. Oh I know.

But the government can, if it actually wanted to, put in measurements to either stop house prices going up, or cap rents.

They won't, like.

[guineapiglet]

It is a very good post and thankfully the issue has been raised for discussion - it is a very deep and difficult situation for so many families. We have just moved to SE for job reasons from the NW - to get an equivalent property to our house in the NW would cost DOUBLE the amount we got for ours finally.
We work in the public sector, and there is no way our salaries have doubled in that time, so reluctantly we have had to take out a huge mortgage with a view to returning 'home' once our kids have finished school.

The north/south divide simply has to be addressed, the country cannot sustain being so London centric, it is not desirable or economic - it is not fair on many families who are being priced out. Goodness knows how people starting out here even have a cat in hell's chance of buying property, without 'bank of Mum and Dad' - what happens if this isnt an option?

[guineapiglet]

PS - in the interim we are renting. We could have rented 3 similar houses for the equiv rent here. Landlord has just put the rent up by another £100 a month with notice. How can people keep adding more and more?

[mumzy]

Housing costs especially in London is now insane. Our house has quadrupled in value since 1997 however my wage increase has definitely not. I personally blame the collapse in decent pension plans and easy credit which resulted in people jumping onto the buy to let culture reducing the housing stock for first time buyers and massively increased house prices as a result

[williaminajetfighter]

Agree it's a major problem. As others posting on MN had mentioned could we not:

1. Introduce rent controls; (it's done in other countries and seems more civil)

1. Put a cap on the number of buytolet properties that one person, family or company can own;

1. Or make buy-to-let only minimally profitable by taxing the hell out of it.

1. Better regulate the rental market. Renting is hell and its bonkers what rental agents expect and get away with.

HB is just a very expensive 'bandaid' that puts money into the pocket of landlords.

Really wish this issue would be higher on the political agenda!

[propertyNIGHTmareBEFOREXMAS]

In the North the majority of my younger friends have managed to get onto the housing ladder at around age 27. They are earning around 25k each (in couples) and have bought starter homes around the £160k mark. No idea if they will be able to move up when the time comes (children etc) but they are working hard admin doing well. I appreciate that things are very different down sarf.

[MmeLindor]

I actually think that HB is worse than a bandaid. I think it is part of the problem.

It enabled landlords to keep raising the rent, because HB filled the gap between the private market rates and what people could afford.

In many EU countries, you are not allowed to keep raising the rent every year, and renters have many more rights.

It is also not seen as a given that your house doubles in worth every ten years - it was ridiculous to think it was sustainable.

[propertyNIGHTmareBEFOREXMAS]

Anecdotally, I also know several people older than me who have now cleared their mortgages and are buying to let as an investment/retirement plan.

[MechanicalTheatre]

I totally agree MmeLindor.

I have no idea what's going to happen, but at the moment, the situation is completely unsustainable.

[mikey9]

Here around Inverness - the cheapest 1 bed flats are £70-90k with 2 beds going up from here - so 3 time ave salary (which is prob lower up here) to get on the ladder - which is exactly the same multiplier as when I bought in 1992.....then it all went mad and I and my wife both benefitted massively to be able to buy big 5 bed up here.

We fully expect to have to sell current big house to:

1. assist kids if they want to go to Uni
   
2. assist kids with deposits
   
3. pay for own (much) smaller property to live/retire in.
   

Hope the sums add up (unlikely) as otherwise I don't see where the kids will get any chances with 1 or 2.......

And I reckognise WE are the lucky ones. A wholescale crash in prices does have some attractions - however it will clearly shaft so many others - you have to be careful wishing for it.....

[mam29]

we rent and its not great.

we in no position to buy despite hubby being on good money.

we dont have deposit or immaculate credit scoring.

We currently pay 725 3bed small new build south west.
we rent through agents
landlord wont let us have pets despite offering to pay extra deposit already got 900quid down been here 7years now.
Yet landlord only gives us 1year contracts so each year we think are we staying:(/ Then when comes to renew agents want annual admin fee.


We dont get housing benefit. looked into ocial we lowest band so stand no chance.:(.

The agents are frankly rubbish. 3weeks without fire in winter.
inspections every 3months.
last one came back with stroppy and very odd letter.

I was in at time of inspection so knew how the house looked.

we spent couple thousand in time here replaced flooring throughout as was crap and landlord wouldent.
Have 30year old kitchen falling apart. garden gates on last legs.
few months ago we had blockage tried sink unblockers plumber came out was blocked pipe between toiliet and bath so what we tried wouldent have worked.

Anyway get letter

re last inspection

It has been noted that your property requires deep clean and that its our responsability as tennanats and when you vacate in near future you wont get deposit back if in this condition.

You mentioned problem with blockage might I suggest you try sink unblocker.

So rang property manager and kept asking her what does letter mean? To which she said deep clean after 10mins she admitted she had no idea a we argued as tennants how can we rectify?

Shock horror get phonecall back next day

Deep clean property refers

to toddler toys in floor in lounge that he was playing with at the time:(

The gardens bot messy with kids toys an grass needs cutting I mean its been wet snowy jan and we completly landscaped garden since moving in.

I feel they being unreasonable.
hen phone or dare go in they treat renters like dirt.
If its job taht costs more money landlord insists on doing it himself and bodging it.

We want to move but as private renters we need about 2grand upfront for 1months rent and deposit and agents fees in advance which we dont have so feel stuck:(Feel we have very little rights we get 2months notice have family one in school so settled in local area,

They even tried to dicatte we use specific energy supplier told them where to go.

Like most private renters we stuck with crappy conditions and rising rents.

All property has done is kept it in older generations.

Im mid 30,s and only people i now who brought had substantial help from relatives.

Sadly cat see us ever buying but just wnat decent family home , secure tennacy and treated bit better.

[NapaCab]

The really striking thing about the UK is how wages have stayed flat relative to house prices, rather than the way house prices have risen relative to food, petrol etc, as Shelter are emphasizing.

When we lived in the UK, house prices were about 8 times the local average income and that is pretty typical for many parts of the UK. Salaries have been more or less static since the late 1990s. 35k was a good salary then and achievable for a professional and it's still the same today, give or take. That's the real issue. By ignoring asset-price inflation during the housing boom, and only calculating CPI on food, petrol and their mythical 'basket of goods' the Bank of England let wages stagnate so house prices outpaced them massively.

We moved to the US and we are living in one of the most expensive places in the country and yet wages here have more or less kept pace with house prices. People complain about high house prices here too but at least they are more in line with wages. You can buy a 3-bed detached house with garden in an OK area here on one professional earner's (engineer, accountant, lawyer) income.

[MmeLindor]

Toomuchtea
I blogged about this last year - about the fact that there are estimated 350,000 long term empty homes in UK, and the government's response was to encourage the building of what I call McMansions - identikit executive housing.

Mam
That is awful, and must be so frustrating for you

[mikey9]

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:

Shelter
Food
Water

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......)