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.

I remember once seeing a list someone had pulled together detailing the property portfolios of MPs (of all parties). It was quite clear from that picture that no party is going to support the young by allowing house prices to fall - too much vested interest.

I wish house prices would tumble, tbh, so everyone stood a chance of affording somewhere to live - given that rents would presumably come down in line with the cost of buying. Only you'd have a load of people who have somehow managed to struggle onto the bottom rung within the last few years who would be buggered.

Cassarick
that is not fair to Cassarick - they are not hoping to get quick, they only want the security of their own house when her DH retires.

I have nothing against BTL homeowners - I would do it too if necessary. We have bought a house now, but if DH gets moved elsewhere we'd probably keep this one and rent. At least to begin with.

We've moved cities 4x in 10 years. You have to go where the job takes you.

not fair to Somewhere, I meant

i honestly think the high cost of housing is this countrys biggest problem, its what is really fucking us up

the council house should never have been sold off, we must build more social/council housing

all this country is doing now is funding millions of buy to let investment oppurtunities!

sundae - that speech about how you and your parents got on the property ladder is clearly well-meant. But I don't think it's that simple.

DH and I lived in a shared room in a shared house when we first moved in together, and it was 510 pcm. And there were mice, and disgusting toilets (two between the lot of us, and I forget how many of us there were but 12 or so IIRC). We put up with it until the building was condemned (which wasn't very long) because we thought things would get better. Now we have a one-bed flat that is badly damp, so it's mouldy, and which has no heating except a very old gas fire which we've been told ought to be removed as a CO risk but can't be as it's not legal to leave a property completely unheated. Last winter thick sheets of ice froze onto the inside windows of the bathroom and our bedroom because they were away from the gas fire.

I've been looking for somewhere else to rent and you can get gorgeous places near me (so I am very lucky), but you can also get shitholes. And the difference in price is not noticable. We just looked at a beautiful two-bed house for 875pcm; we've also seen absolutely disgustingly damp and mouldy bedsits for the same money or more. You can ring the changes by spending money on the commute instead of the rent, but the end result is that property here is quite expensive.

Please tell me what the point would be of us deliberately choosing to live in a filthy, tiny single room, just so we could feel virtuous about spending precisely the same money as we could spend on a nicer place?

Btw, as I understand from people in London (which I'm not), it is precisely the same there: you shop around for a place that is in decent nick (holy grail: not mouldy!), and you don't expect the prices to vary hugely.

I think possibly at some point in the mythic distant past, it was possible for most people to save up by renting somewhere small and cheap and a bit squalid for a short time, but I really don't believe that is an option for most people now.

I think a big problem is the concentration of employment in the South East. There is a huge variation in house prices from area to area.

Also, interest rates. Low interest rates enable people who can afford the deposit to get on the ladder. I think most people know that they are taking a huge risk, but don't feel they have any choice. When interest rates start to rise, there could be carnage, particularly if the economy hasn't improved much at that point. Although house prices have risen, it would be interesting to compare monthly mortgage payments to times when interest rates hit 17%.

What redbobblehat said.

I live in Germany. We rent, along with (I think) between half and two-thirds of the rest of the population, depending on region.

We can terminate our lease on our flat with three months' notice without giving reasons. Fixed-term tenancies are extremely rare - most are indefinite. If our landlord wants to get rid of us (again three months' notice), they have to have an extremely good reason which will stand up in court. In effect we can only be evicted if we persistently don't pay our rent, make ourselves a complete nuisance over a sustained period of time, or the landlord or a close relative want to move in (and that has to be a reasonable and realistic request too).

Landlords are only allowed to raise the rent by a maximum of 20% over three years, and even then the rise is capped at the average rent for the area for the condition/standard of the property (I think there are three classes, basic, standard and luxurious).
If a landlord doesn't honour their obligation to keep the house/flat in a decent condition or refuses to carry out repairs, we can legally reduce our rent until it's done, with a huge body of case law from which to derive specific percentages for specific situations. We once had no heating for 10 days in a cold snap in October, and because it was down to the landlord's contributory negligence we paid no rent at all for those days, which the landlord accepted.

In our situation, as we may yet move again for work, and with so much protection in place, there is no point buying. People do buy, but they tend to stay put for life - there's no 'property ladder' here -, and it's a lot more of a genuine choice than in the UK, where it seems to me that people are practically forced into buying because the alternative is either terrible or unobtainable. And landlords seem to manage OK with all these laws, as does the economy.

All this notwithstanding, UK friends and relatives tend to react with concern, pity, scorn and/or horror when they find out we rent. The stigma of renting and the lack of basic protections for tenants seem to be a bit of a chicken-and-egg thing in the UK.

Oh yes meet someone new

what do you do for living

do you rent or own?

Had odd conversation with mum I hardly knew at school whos saving to buy and told me most important thing I can do and shes indian.

When eldest was small used to meet up with some mums from antenatal who liked to discuss equity and what house they buying next and looked upon me with pity.

As soon as say i rent when you going to buy? how come you havent brought.

Relatives have no idea how hard it is and harp back to when they brought.

Inlaws brought for3grand.

My nans house sold 42k in 92 now on market for 250k:(

My parents made couple of crap financial decisions.
As did my aunt who feel off ladder with repossesion in 90s and got back on less that 2years later.

Lendings too overly cautious.

Im sure i read about goverenment deposit schemes but not sure if they just new builds. what we pay in rent we could pay in mortgage in 7years we never been late with the rent but banks dont take that into account.

Even my agents have attitude to renting as sales is at front.
Go into office and they pounce with w sike how can we help you and i say i rent and they like go to back then. I few times rang wrong number as they have 2lines and instead of tranferering me which sure can be done i get back I need to ring right number back.

I would love to contest 3monthly inspections as feel its excessive and intrusive and unsure if should be paying them admin fee each year as landlorsd choice keep us on one year and they charge him.

Germany sound fab.I keep saying to dh where can we move bt hes retail manager so doubt we have points to go far as I fancy canada and foreign languages are awful.

I really feel for people in their 20s and 30s even those with decent salaries as buying a house/flat nowadays especially in the SE must seem so far out of reach unless you have help from family. On top of that a lot of them will have graduate loans to pay for as well. The rise in property prices only benefits a few but creates huge social problems. Where I live approximately 70% of properties are BTL which means we have a very transient population and very little community spirit or neighbourliness. Lots of my colleagues cannot afford to live in London and spend 2-3 hours a day commuting, to the detriment of family life. We also have a very stark social divide, the ones that can afford to live here are either very rich behind their luxury gated developments or poor in run down council estates. Neither group mix socially and attend different toddler groups, schools etc.

What no one has mentioned so far is that even social housing rents are now moving towards "market" rate, which in central London is extortionate. There is such a shortage that it is impossible to get social housing unless you are destititute. At the same time every piece of land that is spare is built upon. All new developments should be forced to include say 40% social housing.

The only young people I know who have bought in London have bought shared ownership with a hefty deposit from Mum and Dad. Yes the mortgage rates might be low, but it makes no difference to the majority with less than perfect credit or not enough savings for a large deposit. I think shared ownership is massive risk as well. People can get stuck in unsuitable accomodation and completely unable to sell.

I agree that buy to let should be taxed punitively. Alternatively the rental sector needs to have very strict laws governing it, such as a previous poster pointed out is the case in Germany.

Inhertitance tax is the easiest tax to avoid with good planning and is effectively "voluntary".

I don't have anything particularly helpful to say about the current 20/30somethings but I can see why staying put with one's parents after Uni is becoming more and more appealing. If M&D are in agreement about a peppercorn rent, it might just be the only reasonable way to afford to live in the South East, have any type of social life, pay back student loans and put some money aside for a deposit somewhere down the line.

I think living in Greater London gives one a distorted view of reality. There are a lot of youngish and older people living in enviously smart dwellings who have had major help by rich parents or grandparents. It is sadly not the reality for the majority of young or even middle-aged ones.

We have a three-bedroom house but in a not very nice area, but only really could afford that because DW was a real saver and lived in places with peppercorn rents (essentially) until 30s. I had had a share in property, but sadly not in areas that had up-and-come so never made any money on mine. We have had no help whatsoever from relatives despite PILs living in a property worth £1M.

I slightly disagree, Mumzy - I think there is more social mixing than you might think in London not out of choice but out of necessity. I think it is only those working in high-paid City jobs who can afford the gated developments or to live in middle-class enclaves like Crouch End/Clapham etc... You might just find that in the run down council estates are many privately owned properties, homes to the less-well off graduates of this world.

What I think is crazy though is house-price inflation in some parts of London. One of those properties in Chelsea that was recently on the market for £8,500,000 was bought in the 1980s for £140,000 - yes a lot for that era but not the equivalent of its value in current terms.

A lot of people's escalation up the property ladder has historically been down to inheritance and luck. I am not sure with elderly care provision eating into inheritance pots that this is going to happen to the same extent in the future...

I think it is increasingly going to be the case that families will follow other cultures' models of living several generations to a property.

Our parents' generation lived through what was effectively a halcyon age with affordable housing even in the South East/London, moves funded by generous relocation/promotion packages from their employers (even in the Public Sector) and decent pension pots. I do not think that any of us or our children will be in the same fortunate position unless we come from very monied backgrounds.

There needs to be some sort of major overhaul of the whole housing system. The start would be to impose rent ceilings even in London. I don't really know why if Councils can charge a fair rent, the landlords can't be forced to charge a maximum of 20% over the official fair rent value. We have crazy situations where council-owned properties charge £90 a week rent, but others living in equivalent properties in the same locale, paying to private landlords, are forking out three times that p/w.

The problem is that Govt is hamstrung here between saving the banking system (which it partly nationalised) and making housing affordable.

The real solution to this problem is let house prices fall back to the long run average of 3.25 x average male full time wages. It reached 6 x male full time wages in the peak of the boom (even higher in London).

Unfortunately Govt and Bank of England are terrified to let house prices fall. It would destroy the banks if people in negative equity started walking away from their mortgages as they did in the early 1990s house price slump.

We have got ourselves into a situation where the boom in house prices engulfed our economy in debt during the 2000s and getting out of that debt trap wil involve mass mortgage defaults and repossessions. That would also be very unpopular with the older generation of 'boomers' who have almost all of their wealth tied up in housing - totally tax free.

Govt really does not want to address this problem and quite frankly organisations like Shelter are not going to advocate repossession and fire sales of those repossesed houses either. Either that or impose capital gains tax on homeowners who have seen large unearned and untaxed increases in wealth at the expense of younger generations.

To put it bluntly we need to stop propping up the housing market, tax it like any othe rasset or business and let prices fall back to a level that younger generations can afford.

The rules in Germany sound much better. It's the insecurity of renting that upsets me the most. Should our landlord want to sell its unlikely we would find a house in this area, children would have to change school, would be awful. I also hate that the agency get so much money from us for doing so little, that we don't really feel at home here, the landlord is storing his broken furniture in our 'unfurnished' house and has left rubbish in our garden that he won't move, and he can because its his house.

Someone asked about key worker housing. I am a teacher. Basically there were two schemes, new build, where you look out a loan repayable over 10 years, for your 30% deposit. Developers put list prices up by 30% to cover this, the houses were not good value. There was also a really good open market scheme we went for where you were given £20k from a HA for a deposit, repayable when you sold, amount repayable was the % of house value. You could even take money with you to next house. We bought a flat, but we made no money on it, our dd was born, got to two and we had to move, but our wages hadn't risen and we couldn't afford to buy a bigger house, so we sold up, made just enough for fees and deposit and now we rent.

ideasfactory. What a fab idea!

The bedroom tax in social housing means many may want to downsize but the smaller properties are not there to downsize into

Si then forced to go private into smaller properties if can find them where the Rent is actually more than there original property was but it's ok HB covers but it's not really as it ends up higher costs

If they expect people downsize then thru need build smaller properties to . Also this rule not apply to anyone over 62 which are infact the biggest section of single /couples in larger properties

10 years time when in theory I only have one dc left at home I be one bedroom over yet for me to downsize will cost social housing thousands as I need a minimum amount floor space ( wheelchair user and adaptions right throughout the property ) and fully adapted properties are very very rare

Though living in SE chances are I'll still have at least one other dc at home other than ds3 or tbh probably all 4 ( have 4dc and 3 bedrooms so not exactly living it up more sardines but it's adapted for me so we mange)

I really feel for some posters: Kernowgal, Mam29, LRD ... .

Here's a little story about what good social housing can be like.

I have never owned a house. Decided not to buy our council house in the mid 1990s because I was so furious at M Thatcher and co selling off the Council's stock, and have rented ever since.

But renting from the Council in Manchester (1980s - 2000) was a dream. We had a lovely big house in good condition with a large garden, front and back, on a generally peaceful estate. We were treated with respect by any officials we came into contact with, repairs were done promptly, we were allowed to decorate as we wished, we had great neighbours who were incredibly supportive and tolerant - we felt like it was home, and ours. I was a newly single mum with two small children at that time, and it was a refuge for me. It was secure - no-one was going to kick us out - and the absence of housing worries meant that I could concentrate on rebuilding my life and that of my children. I went to uni, got a good job, my kids went to uni, got good jobs, and now we all pay our taxes.

I would love it if I knew my taxes were going towards funding housing like that for today's young families! If only, if only ...

However, if I still lived there now, with my last child about to fly, I would probably have to move or sublet two bedrooms. And, possibly partly because I didn't buy the house when I could afford to (but also because I got a job in an expensive city), I am now stuck in the private rented sector - which I hate, mainly because it is so insecure.

There are advantages in renting. You are mobile, and that is very important for some lifestyles. But the private sector is horrible. At least the council is regulated. Although there are lots of landlords who are very conscientious about obeying the law, there are others who take advantage of our desperation and just openly flout the rules, or take so long to do repairs etc that it can have serious implications for our health, both mental and physical.

solo - sorry, I wasn't trying to do a 'poor me'. I really am lucky, because we're going to move soon and it will be fine. I just wanted to illustrate what the realities are, because I think if you don't know, it's natural to think 'why don't they all just rent small rooms in a house share, I bet I would'. But people need to know that a room in a house share that is not damp and horrible is often very difficult to find! There is a reason why some people in my generation rent what may seem to older people to be extravagantly nice places - it's not because we're turning our noses up at something slightly shabby and small, it's because it may be that or the place where we'll get ill from the damp.

When I left, another young single-parent family moved into the house. Those children are now grown up, but I wonder if their mother will have to move out of their family home if she can't afford the bedroom tax.

I hate to think of young families growing up in hideous conditions.

Good housing is so important, for the health of the nation!

LRD - I think we should tell it as it is, and we can only talk about our own experiences. People need to know what it's like - governments need to know.

Yes, that's true.

I would like it if we could get back to a situation where it was more normal for people who were reasonably well-off to rent, and for it not to have that stigma. I think the quality of housing would go up.

Rent controls (rent caps) are not the answer.

It leads to slum landlords. We had that in the UK in the 1960s. If rents are capped then landlords stop looking after property as they cannot afford to have it repaired.

Getting the price of property down is the answer by allowing the market to work.

Another thing about the bedroom tax - just because your kids leave home that doesn't mean you don't still need the space, especially if you have grandchildren.

Lots of grandparents do a fair amount of child-minding for their offspring, which they can only do if they have the space. And for some young families faced with high child-care costs, this can be the difference between getting and keeping a job and being unemployed.

MoreBeta, I agree we need to get the price of property down, but how can that be done? What do you mean by 'allowing the market to work'?