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.

So you did, MmeLindor. I've just been back to have a look. Very interesting!

Solopower the vast majority of people I know in that situation live in shared houses, paying around £500pcm with all bills included, spend as little as possible on transport (have bikes) and save like demons taking on extra work where they can.

To get on the property ladder we lived in a shared house, did similar and moved in with little furniture and no social life for a long time. Some people seem to want to move into a three bed semi, in a good area, with all new furniture and have no change in lifestyle. It just isn't realistic to want that, if buying is so very important then you do what you need to do for a while. Take on extra shifts, put off marriage and babies, sell anything you don't need. My parents generation did similar, they didn't exactly walk out of school and into a house with a mortgage.

I do have sympathy with people that feel trapped in their situation, who don't want to move, who are forced to rent. I have rented through agencies, privately and been a lodger. I would never go through an agency, they are just there to make money, extortionate fees for checking references, months of rent in advance needed and I am sure they encourage landlords to increase rents.

Building affordable housing never helps those who need it, as it is usually people who don't qualify that are struggling the most. Attitudes to long-term rental and creative housing need to change, councils need to make land more accessible to self-builders for example.

I don't understand why there can't be secure, long term (years) tenancies protected from rent increases. It just seems a humane thing to do. If there were more landlord obligations then perhaps those who see it as an investment would be dissuaded.

And yes, generally I do think it is morally repugnant to buy to let, or have a second home, both should be heavily taxed. It is not right to have more than one home when others have none.

I agree that housing benefit is a major part of the problem - it is artificially inflating private rents. I dread a Labour government getting in again soon because there is even less prospect of them doing anything about housing benefit than the Tories.

Land is massively overvalued in this country and sooner or later the market is going to correct itself. I think that many people who have overstretched themselves or taken out poorly thought-through BTL mortgages are not going to be able to cope with interest rate rises - which will be very sad, but will help out with the misery caused by the instability/grottiness of renting in many areas.

I also think our economy needs to be less London-centric.

Agreed, Sundae. They are healthy young people with good jobs - a lot more fortunate than many.

But it's the idea of a licensed squat that I like. A very tidy solution to a particular situation imo.

We could easily afford mortgage repayments if we had the kind of deposit you used to be able to have (10%). Easily. They would be far less than our rent. And neither will they look at us because we work for ourselves - we have done for 8 years and are weathering the recession when so many businesses are going to the wall.

Hi Just to clarify my previous post I'd like to see people who have second homes and their 2nd or above buy to let homes heavily taxed. Of course that's not 'fair' but it means that investors would invest in other things - eg pensions, stocks, shares - rather than housing which would ideally reduce prices in the long term.

What I really find repugnant are the slumlords and the a**hole next food to me who has a 'property portfolio' of 20+ properties in good locations that he rarely maintains and sits on waiting to sell. These guys ate everywhere and do very little for the economy or for improving communities.

I meant 'next door to me ...' Not 'next food...'!

William - I know. And they will keep eating everywhere, [smiile]

FairPhyllis Housing Benefit is not artificially inflating private rents.

Housing Benefit is capped at (I think, someone correct me if I'm wrong) 30% of the median rent in any area. That means that it's a real struggle to find a private property to rent where HB will actually cover the whole of your rent.

If Housing Benefit was determining the cost of private rentals, rent would actually be going down.

That's to say nothing of the wholesale benefits cap at £26,000, which will generally now be affecting larger families in London, and the so-called "bedroom tax".

I think you'll find that the private rental market is being inflated by good old-fashioned competition, largely from renters who previously would have been able to buy.

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.

Agree wholeheartedly. I've got to the point that I'm thinking of emigrating as I don't think I can afford to live in the UK any more. I work in an industry with low salaries - even managers rarely make more than £25k - and currently earn approx £17k. I'm single, no kids. I earn too much to get any help towards my rent, yet too little to be able to afford to live in a decent home. I'm 35 now and I don't want to have to live in lodgings or shared housing any longer. I looked into shared ownership, but I don't even earn enough to buy through that sort of scheme.

I lived in London for many years and moved frequently - landlords sold up, put the rent up, housemates moved on etc etc. Renting under the AST system never felt secure. We dealt with some utter shysters under the guise of letting agents. I now refuse to rent through agencies - one down here in the south west tried to charge me £175 + VAT for a contract and a credit/reference check.

It makes me feel quite depressed and worried for the future, as I really don't know where I'll end up.

Apologies for anyone hearing the sound of tiny violins as they read my post...

A while back in the early 2000's the Labour Government proclaimed it was building affordable housing for key workers i.e. nurses, teachers etc.

Just wondered if anyone with these occupations actually got the housing reading the post about the lady who is a lecturer and Head of Department.

Where did this affordable housing go?

It was a total fudge IIRC alemci. I believe it was shared ownership-largely on the outskirts of London, which has the biggest problem- and shared ownership was proven to be really crap value for money.

In London it was terrible value for money - when I looked into it I would have ended up paying more than a straight-up mortgage when you take into account the 'market rent' and the 'service charges'. I couldn't see any benefit to it whatsoever.

Would it help if banks lent based on affordability rather than salary multiples?

We are also stuck privately renting with the addition of being self-employed. Home ownership is not an option for us in the foreseeable future.

I suspect that there are a lot of politicians who own more than one property and are profitting from high house prices. Unless conflicts of interest are removed when policies are being planned then things are very unlikely to change.

Also I'm not sure if taxing BtL properties would work as I'm sure the landlords would find a way of passing additional costs onto tenants.

that's a real shame. I remember those schemes in the 80's as well when people couldn't get on the housing ladder.

It is just stupid that a basic necessity has become so expensive. I remember my mum sharing a flat in London (I mean her telling me about it, I wasn't born) in the early 60's. She wasn't well off but people seemed to rent and it was affordable and they could still buy a house eventually.

Not anymore.

Am I the only person who thinks that the main reason for the lack of social housing is the 'Right to Buy' scheme which, I believe, Margaret Thatcher introduced? It enabled people to buy their council houses at a fraction of the market rate, which was seen as a fantastic thing to do at the time. Fast forward a few decades and those families have sold the houses, made a profit and gone on to buy another property. All the while the government has done nothing to replace the housing stock which was bought and therefore is now massively depleted, causing a substantial housing shortage.

I think these huge subsidies to private landlords given by housing benefit has driven house prices up further. I certainly don't agree with increasing inheritance tax. So people in other parts of the country must have estates left to them subject to greater inheritance tax in order to prop up prices in the south. I think that is totally ridiculous.

Why are house prices so high in some parts of the country. Because they are kep artificially high. That's my opinion. They have not been allowed to find a level.

Kernow
We could have had a mortgage much larger than we got - but we couldn't afford the deposit. I agree that it is often more the deposit than the monthly payments - which would sometimes be less than rent on the same property.

The system is flawed. It is apparent in the way in which we talk about housing.

There is no translation for 'housing ladder' in German, because they don't have this idea that you buy a starter home and then move up. They also don't believe that you can get rich with property.

They buy a house in which they live, and they don't expect their house to increase in worth.

This idea that our houses are worth more now than they were 10 years ago - it is a fallacy. My parent's house is 'worth' 10x what they paid, but they couldn't sell it and get a better house.

Exactly Mme. House price increases only really benefit those who are selling without going on to buy again - eg BTL cashing in, those inheriting from a deceased homeowner, elderly selling to pay care home fees. Maybe people from the South East relocating to a much cheaper area.

The rest of us would benefit from lower prices and greater stability. We're about to try to move from 1 bed to 2. We have a huge deposit (I've lived here and paid off a mortgage for 20 years..) but will still struggle to afford it as the increase from 1 bed to 2 is very large. We'll likely end up with the same square footage and just a couple of extra walls

I sometimes wonder what we're doing clinging on to the ladder. We might be better off just giving up and renting. And then I read about people having to move every year, problems with repairs etc. Seems like the average person in the UK has the worst of both worlds.

There is going to be an entire generation who have never, ever manged to get onto the housing ladder. We're all going to be screwed in years to come when we retire when we are about 80 years old. Only one couple in my social circle and age group have bought a house, and that was only because his parents gave them a massive sum for the deposit. We won't be able to save enough for a deposit for at least a decade, the private sector is extortionate and utterly lacking in security and stability, and local waiting lists for a 2 bed HA house (for example) is 8 years. I think there is a huge housing crisis due to hit (probably when UC lands on us like an atom bomb) and I am not looking forward to the fall out.

Thanks mme lindor I try stay positive its hard at times.

You right developers do sit on land.

Mizu can empathise we just lttle bit above your income not by much.

When i worked our combined salaries were £52k barclays offered us 125k at time which wouldent even buy us 2bed flat.Even the ex councils were selling higher than that in really dodgy areas of the city.

We cant seem to save hubbys paying off car loan, e have 3kids.

Im early 30,s but hes 40 not sure latest is yo can take out mortgage?

My landlord is tight, hates kids, animals, has no taste and crap at diy.I have had worse landlords and agents im so fed up of theit attitue every time we resign they want to put blooming big sign outside in front garden saying let by, one year nearly fell and landed on my small child.

The boilier gets checked by plumber every year so least thats safe but lat flat had very dangerous boilier.

Started looking round at other properties to guage prices and for 800-900 could get much bigger house and better finish than here and our 1980s decor hell.Alot ads say no dss so not sure all landlors accept housing benefit,

Private rentals go very fast.When we fisrt moved here 1t house fell though so husband came to see this house and accepted without me,

I want to contest any rise this year but is risk as i could easily not get tennancy renewed and we not in any position to move right now moving expensive business and only stayed so long as knew this be long term as landlords paid off mortgage and this is one of 3rentals plus his country mansion and he drives a huge top of range jag.

We all would really love a small dog.

I think all very well saying people need to think less big.
But if average 1st time buyer 39 by then they usually have a family so need bigger 3bed house. something they can love and grow into for a long time.

There is no ladder anymore bottom rung ie

ex council/ doer upper all snapped up by buy to lets as pension pots.

Used to get so irate watching property ladder as some would just borrow on value of other property to buy more and build up small empires some would do hardly anything mostly cosmetic and expect it to be easy profit.

Like the series after property snakes and ladders where some failed and at end chose to live in property themselves until market picked up they were just greedy.

Grand designs is generally for the very wealthy occasionally has some interesting ones like flat pack home and council co-op.

George clarke and phil spencer on channel 4 did show on empty homes theres loads,

The truth is everyt hings protecting the developers,
All the shared ownership schemes are new build shoe boxes only and new builds depreciate faster ok if there long term but if short trem easier to get into negative equity.

There are loads people on interest only mortgages with no plan how to pay if off at the end.

No interest rates so low cant get trackers,
Not that lot of mortgages follow low base rate either.

I do think holiday homes should be taxed.
Not sure about buy to lets as we dont have enough social housing.
Its lack of housing and high demand which is stopping house prices dropping like they did in previous recessions.
It benefits home owner maybe but no one else.

My mam lives small rural market town lots people on benefits high house prices, few jobs yet another executive housing estate sprung up we do wonder where these people coming from?

Like idea of co-op. I would love to be loaned land by government then could save for big log house as dont mind wooden house its just lands so pricey and planing permission so complex.

Im baffled at cost of wooden houses/flat pack why in this country. we not considering it as fast track social housing for now as take less than week to build kind of like modern day prefabs.

If some brave multimillionaire brought land in every major town/city and build swedish type estate at reasonable prices would be a winner its not like we have hurricanes over here to deal with.
Its good enough for usa.

I dont really feel any party wants to help the poor renter.

younger generation saddled with student debts, low paid jobs and will find it harder again.

To go uni, get married, buy house, run car and have a family gets more and more impossible.

A lot of houses in our street buy to let 2 sold and lovley people moved on as landlord couldnt afford mortgage payment.Another got into financial trouble and rented there home out. People come and go no sense of community here very sad.

As for keyworker my mate looked into it as worked for nhs . it was werd it had to be in area where she worked and there ere no schemes here but there were no hospitals in area they built the estate which was on rural village somewhere on outskirts and she dident drive.

So somewherewest - you intend to BTL. You will let someone pay your mortgage for you then, when you want to retire, you will kick that someone out and take over the house for yourselves? Nice !

The fundamental problem here is the perception that rising house prices are 'a good thing'. See Daily Mail and Daily Express headlines for some of the worst examples...

Rising houses...

"house prices rise by 10%" - means a bigger jump to your next house

Higher house prices - mean more stamp duty to the IR, more interest payments to banks, less money left for people to invest in the productive ecomony - goods and services.

Higher house prices - increase inter-generational resentment

Higher house prices - reduce workforce mobility as stamp duty increases the cost of flexibility to move for new employment opportunities.

There are two groups who profit from rising house prices:

• downsizers - given most of these are now 'baby boomers' who will have been one of the wealthiest generations for a long time past and future I feel little sympathy
• BTL investors; house building is minimal. BTL removes houses from the market putting upwards pressure on prices of the remaining stock for people not looking to invest, but just looking for a stable home. It should not attract current tax breaks. I think it will very very gradually become a tax cow for the govt.

Current prices are not sustainable in relation to wages against a backdrop of other rising costs (e.g. travel fuel, heating fuel). I do fear that some people who stretched themselves to buy within the last 6 years are going to be badly burned.

Well, to be fair, when someherewest's dh retires that's exactly what the church will do to them.

I agree that people with tied accommodation should be trying to pay a mortgage for somewhere to live when they lose their home. In the meantime of course, they should be being exemplary landlords