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Independent Inquiry Into The Affordable Homes Crisis

September 14, 2012 | Landlord News  

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Housing Voice, the campaign alliance established in 2011 to champion the need for more affordable homes to buy or rent, have released their Inquiry report into the affordable homes crisis. The Inquiry was launched in 2011, supported by Citizens Advice, CDS Co-operatives, Child Poverty Action Group (CPAG), National Union of Students (NUS), Sitra – the charity for supported people, TPAS, TUC and UNISON.

It is predicted that there will be a housing shortage of 750,000 in 2025, when the average house price will be 8 times the average annual salary, the average age of a first time buyer will be 37, more than 1.8 million households will be on waiting lists, and the rents in the private rented sector will continue to grow faster than incomes in many parts of the country. Housing Voice hopes to prevent this from coming to pass by stamping the need for action on the consciousness of both the politicians and the general public.

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The Inquiry focussed on all types of housing, including owner occupation, gathering information from across England, engaging with politicians, industry professionals, as well as ordinary people on low to middle incomes. Four oral hearing were held in the South-West, the North, the Midlands, and in London and the South-East.

Altogether, they received over 60 written or oral submissions, and over 3,000 people took part in their survey.

The report points out the failure of successive governments to take responsibility for supplying the housing needs of a growing population, with number of houses completed in 2011 being just 114,000, less than a third of the number completed at the the peak of housing development in 1968, continuing the steady downward trend that has since unfolded.

They also warn the current government of the greater cost that could result if housing development is hampered by their strict austerity measures, “The Government’s commitment to eradicating the budget deficit over the short term, and the belief that this is the only way to maintain economic confidence and low interest rates clearly has implications for any housing policy proposals that require public funding. However, our recommendations demonstrate that the opportunities, in terms of jobs and the major boost that house building provides to the economy, outweigh the risks. Failure by Government to act has the potential for far greater cost – a weak recovery, continued susceptibility to household debt bubbles and the social, health and environmental costs of poor housing.”  

The report summarised their findings in ten key points:

  1. There is a shortage of affordable housing and new house building is not meeting need.
  2. Affordability is a major problem for many looking for a home in all regions.
  3. The link between housing and the wider economy is of fundamental importance.
  4. People’s aspirations to become home owners remains strong.
  5. The current direction of housing policy has significant consequences for the way society will develop in the future.
  6. The social rented sector is becoming increasingly residualised.
  7. Much of England is becoming increasingly reliant on the private rented sector.
  8. Significant barriers exist to building more affordable housing.
  9. There has been a sustained failure by successive governments to keep housing supply in line with demand.
  10. There are examples of best practice and good ideas that can be developed further and spread more widely to help address the need for more affordable housing.

The report stresses the severity of the crisis and the urgency with which action needs to be taken both by government and housing providers.

Included in their summary of recommendations: “We need to commit ourselves now to a target of creating a minimum of a quarter of a million new homes every year for the next 20 years with a significant proportion being affordable.”

They go on to outline an emergency package, a medium term programme, and a proposed National Commission on Affordable Housing for the long term.

Lord Larry Whitty, Chair of the Housing Voice Affordable Homes Crisis Inquiry, said, “It is clear from the evidence received, both orally and in writing, that the housing market throughout England is in a state of serious dysfunction and all sectors face a crisis of affordability. In particular, new entrants and households on low to middle incomes face real difficulties and challenges because of the affordability crisis in housing.”

Commenting in the private rented sector he said, “The private rented sector, previously in decline for many decades, has now become a major provider of housing. But the economics of the sector are fragile for both tenants and landlords and rents have been rising fast. So too are the costs of service charges for longer term leaseholders of flats whether their leases are with private owners or social landlords.

“The unavailability of both social housing and affordable mortgages creates pressures on the private rented sector, which is growing in significance by default. As a consequence, choice is more limited and costs are higher.

“For many, the private rented sector is their only choice and it can be more difficult to put down roots and save for a deposit. The differing forms of tenure and their rigidities make it difficult to move from one sector to another. The housing journey enjoyed by the majority in recent decades risks being much longer to start and those that become home owners will do so for a truncated period.”

He went on to say,”These trends cannot continue. It is clear that substantially more homes need to be brought to the market, which can be afforded, in all forms of tenure. Inevitably, there is a need to find new ways to mobilise additional resources for housing in both the private and the public sectors.”

He finished, “I hope our report will help raise the profile of affordable housing higher up the political and public policy agenda and that its proposals will be taken seriously by the Coalition Government, political parties, the media and the wider general public.”

The 48 page report is available to read in full here.

 

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