Scrapping aircraft carriers may grab headlines but for eight million people living in social housing the government has fired a full broadside into their future prosperity and, no doubt, hulled many below the waterline. The announcement that the social housing budget will be reduced by 50%, allow rents to reflect market rates and phase out tenancies for life will send shock waves through many households.
Housing is an essential for any basic quality of life to exist yet over the the Blair years the average house inflation was 7.5%, with family homes well beyond the reach of people on the average wage of roughly £26,000. For the low paid, social housing has provided the safety net for many to remain working and maintain a family. Aren't they the people that all political parties say we should be helping? As private rents have increased to reflect the rises in house prices we are left with a greater need than ever to provide people with some secure accommodation, especially as the announcement that housing benefit levels will be capped. The policies together will condemn many families to poverty and poor living conditions.
What will come next? Increased prices and less social housing will inevitably lead to homelessness and since there is a statutory duty to house homeless people the cost will ultimately fall back upon the government anyway, or will that duty be removed?
Oh and please don't bother looking for Blair's views on housing. Social housing, an old fashioned bread and butter Labour Party issue was distinctly out of favour during the New Labour years when the boom was largely fuelled by house price rises caused by the abundance of credit and government policy that saw the number of new homes being built by the public sector fall well below the level to meet the demand. Once again the market was left to provide, but as Toynbee and Walker conclude in 'The Verdict, "Supply did not respond because property companies bought land, then sat on it, letting its rising value decorate their balance sheets and share price." p139.
Yes indeed. Surely house price inflation is the root cause of many of the ills we face in Britain today. The gap between owners and non-owners gets ever wider; the inflated cost of housing distorts standards of living and reasonable expectations of standards of living.
ReplyDeleteThere is also another equation whereby rents are actually quite consistent (and a reflection of earnings).. What fuels rises in house prices is firstly easy access to credit, and low yield expectations (partly in response to low interest rates).
ReplyDeleteCredit won't get cheaper, it's already got less accessible.. Watch house prices stagnate for a good while..
Sorry to turn your blog into the daily mail Joe
It is a fair point and there is certainly a relationship between earnings and rent but even the property 88888 recognises the link between rents and house prices as landlords struggle to maintain yields or even pay their mortgages. I've had a quick look and according to the Cambridge Centre for Housing and Planning Research rents rose 25% between 2003 and 2008 whereas average earnings grew about 10%. Given that income rose at roughly twice as much in the upper quartile compared with the lower quartile, I don't think it holds up. Happy to hear you Daily Mail views Oly.
ReplyDelete88888 is suposed to say websites, don't know what happened there.
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