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.

seriously landlords were never meant to be people who didn't own all or a sizeable percentage of the property. it needs to be those who are financially secure enough for such an investment. those who an interest rate rise or a few months without a tenant or a months late rent when someone is made redundant doesn't wipe out. they need to be secure.

this idea of property as a fast income generator is what got us into this mess. property is a secure place to put your capital long term. always has been always will be. secure for 'capital' not a secure gamble - no such thing obviously for the most part. so if you had 70k then yes investing in a second home and renting it out would be a pretty secure way of investing for the future and hopefully also paying out monthly dividends on top. if you are gambling on a 2% deposit on a property bought in a time of high prices or whilst interest rates were at record lows then duh! no, not the wisest move and we can't have all of our lives grinding to hell just to protect your dumb arsed gamble.

(no 'you' being spoken to in particular here btw)

No communist state has ever succeeded

Nothing I say has anything to do with communism, why not respond to my actual statements.

There are many countries that favour capitalism with affordable housing for their populace.

Your sort ironically favour socialism, theres nothing quite like preventing the next generation from owning their own homes and trapping them in high rental properties for stunting social mobility.

Your sort would be bankrupt if we actually had capitalism here, the problem is the housing market is not being allowed to operate as a functioning market. The housing bubble was allowed to pop in the states and they are all the better for it.

None of this excuses your immoral actions.

mondaytuesday - not sure that 'immoral' is the right word although your frustration is something I can understand. But things change all the time.

I think landlords are also victims in a way. Many were sold a 'pup' - there was little media attention on the committment and hard work involved - mostly on the gains. Sarah Beeny and her ilk were busy making it on TV - now the tide has now gone out and both landlords and tenants have been left beached, some of them anyway.

xenia - thats not true. Having had first hand experience of both private sector renting and state sector (social housing) I can say that state is better and more sought after. If you are also speaking from experience, it must have been with a very good private landlord, or an unusually difficult social one.

The state sector are much more 'hands off' - or certainly used to be a few years ago - and allow tenants to exist in peace and privacy and to feel some sense of ownership of their property.

If you are letting out one or two properties, you will be busy, but cannot be classed as 'not very well off' - a family of 4 renting a small 2 bed flat with high rents and an max income of e.g. £25,000 are 'not well off' when they lose over a third of this income in rent, and a third in tax and live off whats left - about £600 a month for family of four - only slightly topped up by tax credit too.

Mortgage on a flat of £85,000 would be about £400 a month, but the rent will be 6-700 instead of £500. Thats £200 a month going into a landlords pension fund, instead of their deposit saving - thats why people are getting angry and frustrated!
Nothing to do with 6% this or capital that - just families struggling with high rents.

swallowedafly, you are wasted on here . It needs someone like yourself to get the statement you made at the top of this page into the media. My house is paid for, but I as a pensioner having seen several bad recessions can see what is happening to the young. As for the landlords doing a better job than social housing that is ridiculous.
I lived in a council house as a kid , we did not live under the boot of a landlord that could kick you out on a whim.
You could decorate , you could have a new carpet , a dog . You could also go to bed without worry of the landlord selling up and out you go.

We can't sell up. The flat we rent out is attached to our house, takes its electricity, gas and water through our supply, and has internal access to our house which is not safe to block off completely in one case, and can't be blocked in another case.

We wouldn't be LL except for that. OK, we needn't have bought this house, but we'd been living in a van for months and I was desperate. The only house we could find which had a decent granny flat for my mum, at a price we could afford, was this one.

Jux I dont think it's a landlord like yourself with one unit is the problem.
There are landlords with multiple properties ,that can outbid with the equity of other properties the young don't get a look in.
I lived in rented when young and rents were much smaller part of income compared to the present. The first three posts on this page really do state the obvious.People need to see the big picture. We are stripping the young of any future.I am amazed they are not storming parliament

Every time we have a round of quantitative easing it devalues our money.
It's done to cover bank gambles with mortgages given to those that were not in the position to ride out rate increases.
We are all paying for bad investors. WHY?
If I go out and buy a expensive car who bails me out ?

Only the vested interests want the plates to keep spinning

diamondsinthesand - you have forgotten the cost of insurance and maintaining a property, agent/legal fees. Everyone always does forget these costs.

"Mortgage on a flat of £85,000 would be about £400 a month, but the rent will be 6-700 instead of £500. Thats £200 a month going into a landlords pension fund, instead of their deposit saving - thats why people are getting angry and frustrated! "

That apparent £200 surplus is not real. It covers the landlords other costs.

Most landlords make nothing out of rent they only make money if the house goes up in value and lets be frank it is the prospect of a quick profit from a rise in house prices that BTL landlords were only ever in the game for. Most are now losing if they bought flats off plan. It really isnt a bed of roses. Many BTL landlords have lost money and had a lot of hassel and were 'sold a pup as someone else said.

I am a long term private tenant by the way. My landlord makes no money out of me and if he makes a capital gain well good luck to him in a falling market..

Morebeta , That 700 pound rent you quote would be seven eighths of a min wage after tax. aprox

Taxpayers are topping up poor wages , why should people have to pay for someones property and give them a couple of hundred as well a month.

It's all greed and it will bring down the house of cards if not corrected.

Have to comment on the following:
enia* said "Buy to let is risky and tenants are very very lucky people are prepared to take the risk to make huge losses to keep them housed."

What seems to be missed is that without such a huge number of BTL properties - and the risk preventing more piling in - then prices would tumble as more stock became available (just what many want to see happen).

So how lucky are all the tenants who are prices out of a sniff of buying because of the competition of buy to letters bidding up prices - unlucky I would say and they would benefit from a massive reduction in the BTL market (however pigs are unlilkely to fly.....to many politicians with their snouts in this one.

As for the comments about communism - that statement is just so like the American approach to shouting down opponents - if not a free market/capitalist/republican approach then condemn the only other choice available - communism. Thus totally ignoring the fact that many different systems exist out there - and appear to provide housing at much more affordable rates compared to incomes (Sweden, Netherlands, Germany....we could keep going.....) - none of which appear to be communist - so give up the right or wrong approach - and recognise that we could learn a lot from many of our near neighbours (I often despair that we are sooooooo poor at doing that in this country).

^Xenia I meant

roneik - they are not giving the LL a couple of hundred. The LL uses it to cover costs of maintaing the property, insurance, agent fees, void periods.

Honestly the vast vast majority of LLs only make money if house prices go up. We have to get house prices down. That is the solution. That will allow LLs to charge lower rent, still make a little profit from rent and not depend on ever rising house prices.

so to sum up do most posters think that if people stopped buying property as an investment and no one was allowed to do this then there would be a fall in property prices and then who would buy the properties. Could the renters manage to get a mortgage or would the young professionals buy the properties?

also what about the sub letting that goes on in council housing. That never seems to get discussed and it does go on. That is unlawful.

but those are a landlords costs morebeta. that's the cost! it's a long term investment - if you don't own a signifcant percentage of the actual house (rather than a huge mortgage) there's not much short term profit in it.

in ten years time when your mortgage payments (paid by tenants) start eating into the capital of the mortgage significantly then you have options - keep going as you are and get that capital down faster and faster, remortgage for the remaining amount and have a lower mortgage and more monthly income but longer till it's paid off or sell up and take out the capital accrued so far.

it's just unrealistic to assume that 5 or 6k investment is going to make to make you hundreds of pounds a month from day one AND pay out 150-200k in 25yrs time.

on what planet does that sound a likely return for a few grand?

seriously - if returns like that were realistic we'd all be millionaires.

when your mortgage payments (paid by tenants) start eating into the capital of the mortgage significantly

If they bought after around 2004 the rent they get barely covers the interest on the mortgage. The vast majority of buy to let mortgages are interest only, and at best they break even on a monthly basis just paying that interest.

They hope for an increase in price, which as we can all see isn't going to happen.

It's a dumb 'investment' made by dumb people who see no problem with taking home ownership away from families and with preventing many more from even being able to start families.

Funny how the buy to letters have gone since I pointed out the undeniable facts about their immoral behaviour isn't it. One said hey what about old people with gardens, the other decided the communists did it, and then they're off.

I make that 2-0. Come on buy to let people, come out from under your rock, who is next to be batted out of the park?

I have not gone. Most of us work(and I am not currently a landlord). I would agree with/meet round the back at it were, monday over free markets. We don't have one which is part of teh problem here. We have massive control over interest rates which are kept much much lower than a free market would allow.
The result is that people are paying a lot more for properties than they would if interest rates were left without Bank of England interference.

I don't think buy to let is a dumb investment but it certainly involves risk and those who engage in risk take the rough with the smooth. It has done tenants a huge benefit as unlike when I was first looking to rent in London just before assured shortholds came in when landlords if they let had to let forever which of course meant no one would let at all so people could not find rented property, nowadays there are properties to rent.

There will be increases in price over a 30 - 40 year property ownership period. It si highly likely. There will continue to be periods like in the 70s property crash which I just about remember, the 90s one which I certainly remember etc but if you hold property over time it is likely to be a reasonable investment.

The anti landlords on this thread I am afraid have lost, haven't they? They have no money, no assets and live at the mercy of landlords. They may hate the landlords but the winners will also be those prepare to work hard and take risk and invest, not those who merely rent.

good points Xenia. I don't have another property, only the home I live in but I must admit my DH and I discussed buying another property for my dd to live in whilst at uni rather than paying over 4K on a room for the next 3 years'.

We didn't as we just want to clear our own mortgage and not have the worry of it in a city 2 hours away.

I am sure alot of the posters such as dreamer are fair with their buy to lets and perhaps some people haven't got the committment to buy their own home or cannot hold down a job etc. others want an easy life at the expense of the hard working and it is always someone elses fault never theirs.

I still think buy to let is a huge risk and it takes someone who is quite sharp and savvy to do so. not for the faint hearted amongst us.

Certainly in London there are a lot of people there for short periods or moving in with friends and do not want to buy. if a landlord over charges a tenant will go to look at another place. I see the process from both sides - daughter this week has people looking at her buy to let and before that she and friends were looking for somewhere to let.

I am sad that so many tenants on the thread seem to hate landlords most of which are ordinary people who have worked very hard to buy only a second property. Few have loads of them. There is not a current market such as London in the 50s or 60s when there was the Rachman scandal and vicious landlords whose tenants had rights to stay for life on rents at ludicrous levels of £10 a year forced them out with violence. The free market and the abolition of rent controls has meant that those days are long gone and the market for rent can find its own levels subject to interest rate issues of course.

the landlords i'm talking about did not work very hard to buy a second property they managed to land a near full mortgage loan from unscrupulous lenders and expected to make a fortune in both income and end pay out unrealistically.

people who work very hard to actually 'buy' a second property - or at least own half of it outright have made wise investments and are in a position to charge realistic rents and not freak out when interest rates return to realistic levels.

those on 95% mortgage on say 2005 prices made a dumb gamble and shouldn't expect to be bailed out by inflating house prices and/or keeping interest rates ridiculously low.

We agree on the market interference, interest rates should be higher and this would go a long way to ease the current inequalities which have nothing to do with people getting what they deserve and everything to do with when a person was born.

Take away social mobility and create a new 'landed gentry' lording over the young and you will have problems, it is not healthy for anyone.

The anti landlords on this thread I am afraid have lost, haven't they? They have no money, no assets and live at the mercy of landlords. They may hate the landlords but the winners will also be those prepare to work hard and take risk and invest, not those who merely rent.

Be careful about your assumptions here, many have kept out of property ownership because it is so obviously a speculative bubble. There are plenty of people who choose to rent and not to keep their wealth tied in an immobile illiquid depreciating asset.

It is more accurate to paint a picture of landlords as the lazy ones, it is not that they have seriously weighed up the pros and cons of their 'investment' and are go getting risk takers in the majority of cases, have you met many? They are charlatans by and large, anyone getting into this game after 2004 is far from a savvy investor.

They didn't need to earn any money to get into this game and that is the problem. The natural filters that prevent the clueless from entering positions of influence (in so far as you can claim being on the hook for a 2 bed new build as being that) have not been in effect, the banks were throwing money at these people which led us down the road to this current financial crisis.

Finally, the game is far from played, and we will see who is left with the freedom and the cash when this has played out. I would not want to be on the hook for 100s of thousands secured against a rapidly devaluing asset class with a grim future in this kind of environment. As for those who bought when rates were low, where do you think the cost of borrowing is headed? merely rent is certainly amusing in this context.

it takes someone who is quite sharp and savvy to do so

If you say so. We shall see. Most of you haven't a clue whats coming.

Quite apart from the moral issues already high lighted and still not denied, most have wrecked their own financial futures with this as well. Your inability to see this proves the point.

Good luck, you'll reap what you have sown.

oh gosh you are a cheery one Monday, Tuesday:)

I do take your points though. I hope you understand that I have one home which is mortgaged and we don't have much spare cash. I think we are in a financial mess as a country.

would be interested to hear about your own experience.

oh gosh you are a cheery one

YOU'RE DOOMED!!

Seriously it is a sad situation, people are taking advantage of other people, neither of these groups have 'earned' their positions as either the victim or the 'investor', and in the end everyone loses.

I find it sad to see such selfishness and greed combined with a willingness to inflict such harm on others.

It will all work itself out in the end but in the meantime it is sad to see how terrible people are to one other. On a site with a family focus do these landlords simply not care they are part of the problem that has priced their own children out of a life they themselves took for granted?

It is all terribly sad.