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.

solopower - it is true that no one wants repossessions but the problem is that the seeds of this problem were laid in the last 10 years with so much debt being secured against property to creat an enormous bubble rise in prices it has to burst properly before the property market can heal itself.

The bigger the boom the bigger the bust.

MoreBeta - Don't you think the problem started when people were allowed to buy their council houses?

I know it sent some people shooting up the housing ladder, but it also helped cause the housing crisis, because as you say, the boom was followed by a bust, and then people needed the council houses that had been sold off and not replaced.

I think the issue of council housing is to be honest a red herring. I know it is a very emotive issue but in reality council houses are just another property market distortion.

There are huge queues for council houses precisely because they are rented at far below market rate. What we need is all house prices and rents to reflect the true market value.

If rents and house prices fell 25% from here this problem would largely disappear.

Incidentally, I do think our housing shortage is excarbated by old people 'hoarding' houses that are far too big for their actual needs. I have just seen on Sky a discussion about a cap on care fees at £75k for the elderly so thay 'dont have to sell their house'. Why not? Surely that is what savings should be used for? If we make it so old people never sell or downsize we create an automatic shortage.

I don't like the word 'hoarding' - it seems designed to stigmatise people for doing something that is entirely sensible and not in any way malicious. If their house is rising in value OF COURSE they're going to hold onto it as long as they can. But it is part of the problem, yes.
How many of these families squeezed into small flats have grandparents in much bigger houses? Quite a lot that I know of.

South WEst here - plenty of nice houses for sale for less than 180K - some with 4 bedrooms. A young couple on 25K each could save hard for a year and easily afford one of these.

Problem is that housing for the boomer generation became a favoured tax free saving vehicle and not just a place to live. Fine. They did well but now they should use that money they 'saved' by investing in a house to pay for their retirement and care. Otherwise the younger generation will be paying for it through taxes while still living in cramped houses.

This is an intergenerational crisis.

How?

Let's assume they only needed one minimum wage income to live off (unlikely, isn't it?). Where would the rest of their deposit come from?

Was that a reply to me? Well, my son earns a little over 35k, takes home about £1500. If he and his GF wanted to buy a house they could move in with us or her parents and with a joint income of £3k could save at least 18k in a year betwenen them, possibly more as we would only want food money + small contribution. They would have their deposit and could save a few months more for the fees - so 18 months and they would be in. they both have some savigs anyway.

That's not an option for a lot of people though, higgle . My parents and my partner's mum would baulk at the idea of us moving back with them for a year. Besides which, we live in London and have jobs here and none of our parents live in London.

Oh, sorry, I thought you were talking about two people on 25k, saving for a deposit, not one person saving half of a deposit.

18k would not get me a deposit for a 180k property, sadly, since I do not earn 35k and have student loans, like many people my age.

35k is a very high income for a young person, higgle. I think we all know rich people can buy houses!

It must be very pleasant for your son that he can move in with you, too. You're very good to him, and I don't mean to knock your generosity - only to explain why many people can't afford it.

Looking after old people in their own homes is cheaper for us (tax payers) than paying for their care homes.

Pitting one generation against another doesn't achieve anything, does it? How does it help? Rich people do not share. That is how they became rich and how they will stay rich. Old people are no different to anyone else in that respect.

If you are going to turn the oldies out of their homes, then do the same to the bankers and chief executives and anyone else who owns a house that is bigger than they need. David Beckham springs to mind, but I'm sure there are other footballers or filmstars that we could turn out of their mansions. Think how many homeless families they could accommodate.

Let's storm their gates.

Sorry - that was to MoreBeta.

Typo - he earns £25k to take home £1500. He lives in London at the moment and pays £630 for just one room in a shared house, he is in the civil service and hopefuly will get a "posting" somewhere cheaper to live.

I'm 45, and I've still never earned more than 20k, despite having a master's degree.... My parents, despite having the room, when I & my daughter did move back in with them, charged me so much rent I had no money left to live, let alone save....

Paying £550 rent a month leaves me and my partner with no money left for bills, let alone saving....

higgle - sorry to be picky, but you mentioned a couple earning 25k each. So, a rich couple. Even assuming they were allowed to share that room for 630 (and many LL charge per person not per room), could they save a deposit for a house cost 180k? In a year? With transport costs?

I'm not denying it can be done, it just sounds rather unlikely to me, and that is depressing given that a couple earning 25k each in their 20s are already doing very well financially, aren't they?

Weird, isn't it? Children not leaving home or coming back to stay with their parents. Before long we'll have extended families all living under the same roof again, as they do in other parts of the world ...

There's another possibility...the older generation in the emormous houses could possibly downsize and help their kids with deposits? They are the ones who profited from the property boom, after all?

BadMiss - yes, I can't think why a parent living in a mansion would not want to do that, tbh. I'm sure a lot do.

Only if we have big enough houses in the first place Solo. I'll have 2 with a 6 yr age gap in a 2 bed flat (if we're lucky - it's going to be 4 of us in a 1 bed while ds2-to-be is tiny). Dh and I are 40, so realistically another 27 years until we retire - pushing it to do too many other moves that require mortgage increases.

Not much room for adult children and partners to move back in to save for deposits.

Where I live in the South East, the council are counting all living spaces as bedrooms for the purpose of 'bedroom tax' so everyone has to downsize. Living rooms, dining rooms, box rooms are all bedrooms. It is common here for a family of 4 to live in a small 1 bed flat, often with the adults sleeping in the small open plan living room / kitchen and the children having the bedroom. Because of this the smaller flats and houses that were originally starter homes have shot up in price and are being bought as BTL and no one can afford to buy one and the demand to rent one is very high.

Noooo! Bangs head on table. It's so unfair, Sleepyhead and Noisytoys.

We really have got our priorities all wrong, wrong, wrong in this country.

solopower - I'm not suggesting forcing people out of their homes. Just telling them they have to use the money stored in them to pay for their care if that becomes necessary.

Why is money stored in the form of a house so sacrosanct? No one would say the same about £500k of money an old person had in a deposit account or shares.

I think the older generation had their own share of hardships. Some of them were born before the war and went out to work at 14 as did my father-in-law. He had to do National Service which my dad didn't being a little bit younger. They did struggle to buy property and have never had much money to play with.

Sure they have a nice house now but they live on a small pension.

It?s a shame that one generation is being set against another, I am a pensioner and getting a home paid for took a lifetime. Even then I had to trade down to the north in order to be able to have something 2 bed. If you walked in the majority of boomers shoes you would realize it?s never been easy buying your own home.
People should also remember that the benefit system was not always so accommodating as is now.
There was a time when you needed 28 weeks national insurance stamps to be eligible to six months dole money . After that you were on your own.