SS6057 Housing and Homelessness Policy Week 1 Housing in the UK – the context

SS6057 Housing and Homelessness Policy – introduction to the module Looks at one of most pressing issues in country today – housing and affordable housing in particular: key changes that have recently taken place in the housing market in the UK – changes in tenure, in housing demand and in the supply of and cost of housing causes of current housing crisis in London/UK history of council and social housing understanding of how housing policies have changed since 1980s in particular Homelessness – trends and causes

Reading and resources Reading very important – books/reports - weblearn Useful websites: Chartered Institute of Housing; http://www.cih.org/ Shelter: http://england.shelter.org.uk/ Joseph Rowntree Foundation: https://www.jrf.org.uk/ Useful journals: Housing Studies Critical Social Policy

Assessment Assessment 1: Presentation (30%) Assessment hand-in: Week 8 (work on weeks 4 to 8) Assessment 2: 2,500 word essay (70%) Submission date: Week 15

Housing – an introduction Housing is key and pressing issue today – an increasing problem for many – an increasing cause of poverty – homelessness is increasing, rising evictions, increasing numbers of families housed in temporary accommodation, rising rents and cost of owning homes - increasingly young people in 20s an 30s living with family or in shared houses, growing levels overcrowding But why? Why do we have a growing housing crisis in UK today?

What are the major changes in the housing market? Last decade has seen major changes in housing in UK: Changes in tenure Gap between supply and demand grown Fall in supply of housing Growth in demand for housing Rising housing costs – rents and to buy Decline in and changes to social housing

Changes in housing tenures Recent years have seen major change in housing tenure in UK: Home ownership has declined from peak of 71% in 2003/04 to 63% in 2013/14 Social rented sector has declined from 21% to 17% - now the smallest tenure (31% in 1980) Private rented sector has increased from 10% to 19% in 2013/14 (DCLG 2015) – doubled since 2002(Shelter. 2015) Trends are forecast to continue

Changes in housing tenure

Changes in housing tenure in London In London owner occupation fallen from high in 2002 (1991 -2002) of 58% to just 50% in 2014 Social rented sector has fallen from 28% in 1991 to 22% in 2014 Private rented sector has increased from a low of 10% in 1991 to 14% in 2003/04 and 30% in 2014 In Inner London the proportion of households that rent privately is much higher at 31% - with 32% social renters and only 37% owner occupiers (Aldridge.2015)

Young households 25-34 Biggest changes in young households More likely to rent privately than buy 2013/14 48% young households rent privately, increased from 21% in 2003/04 While owner occupier young households fallen to 36% in 2013/14 from 59% in 2003/04

Growth of private rented sector Across UK and London, private rented sector is growing – doubled in size since 1980s – it is the only growing housing tenure across London and the UK – over 1m private rented homes in London Reflects number of factors – not least growing demand for housing and fall in supply – but means it is important that we look at private rent sector in this course and that housing policy addresses the private rented sector Price of rents increasing – average private rent in London in 2015 was £1,600 a month (£19,200 a year) (England £770) an increase of 19% over last 5 years (Aldridge. 2015) – on average 60% of gross income on rent ( Shelter. 2016)

Housing – rising costs In London (and UK) housing costs increasing In 2015 average house price in London was £500,000 (double that for England) - last 5 years, house prices in London increased by 51% (31% in England) Average market rent in London £1,600/month increased by 19% over last 5 years Social rent in 2015 - £520 for RSL and £440 LA – both increased by 28% over last 5 years

Housing and poverty Obviously access to decent, low-cost housing is important to increasing disposable income and preventing poverty and deprivation Shelter (2015) Housing and Poverty - number of private renters in poverty doubled 2.2m in 2002/3 to 4.1m in 2012/13 and that private rent is set to continue growing and private rents to continue increasing – more than twice as fast as incomes – pushing up to half private renters into poverty Putting social rents closer to private rents will also increase poverty while welfare reforms and rents policy are creating tensions for social landlords – causing some to rethink role

What do we mean by housing tenure? key tenures in UK housing market: Owner occupation – occupier owns the freehold – mortgage or outright owner Private rented sector – tenant rents from a private landlord – usually as an ‘assured shorthold’ tenant – landlord right to repossession at end of agreement Social rented sector – tenant rents from a ‘social’ landlord – ‘secure tenancy’ and less than market rent- both changing

What is social housing? Rented housing provided and managed by a local authority (LA) or arms length management organisation (ALMO) - council housing – as a ‘secure tenant’ – who has right-to-buy the property and protection from eviction if tenancy agreement is kept (under Coalition Government – changes to security of tenure for new tenants) Renting from not-for-profit landlord – usually a housing association – or ‘registered social landlord’ (RSL) – usually on ‘assured tenancies’ - again recent changes

Defining social housing ‘The term social housing means housing provided and managed by local authorities and arms length management organisations (ALMOs) – commonly called council housing – as well as by housing associations and other organisations regulated by government. The essential characteristic of social housing is that it is provided by organisations which do not make a profit for their owners in the way that a company in the private sector would aim to do’ (Harriott and Mathews. 2009. CIH)

What is a housing association? A housing association is a not-for-profit organisation set up to supply housing Run by a management board – of volunteers who can be paid – not elected When registered, housing associations become ‘registered social landlords’ (RSL) and are entitled to apply for state finance In 2009 – 56% of ‘general needs’ housing association properties were let via nominations from local authorities In 2010 there were 1,578 RSL’s in England owning 2.5m homes

Defining ‘affordable housing’ ‘Affordable housing’ is a widely and varyingly used term – also one whose meaning constantly changing – and we will come on to look at it Coalition Government in 2010 introduced ‘affordable housing’ as a new tenure for new tenants in the social rented sector – who will have ‘affordable’ rents and more limited security of tenure - policy defines ‘affordable’ housing as housing costing up to 80% of the Local Housing Allowance (not necessarily ‘affordable’ especially in London)

Changes in housing demand Other key issues underlying changes in housing market in UK Demand for housing – increasing (more week 2) – briefly here factors: Population growth UK population forecast to increase by 4.9m 2010 to 2020 London – between 2001 and 2011 London’s population increased by 12% from 7.3m to 8.2m increased (by 88,000 a year 2001 to 2011 and latest ONS projections envisage London’s population will continue to increase by 110,000 a year 2011 to 2021) Growth in households People living longer, more single households, divorce

Changes in housing supply Key factor – is that supply of housing in UK has continually failed to keep up with demand – shortfall in supply of housing and especially of affordable housing Currently rates of housebuilding in England are half the level needed to meet demand for new home Private house building peaked in 1960’s – and mid-1980s – fallen with less than 90,000 homes built each year since 2010 Social housing construction – peaked in 1960s and 1970s – local authority fallen sharply since 1980s – controls on financial powers – housing association fallen since early 2000’s Reflects number of factors – examine in more detail through course Deep purple – local authority - mid purple – housing association - light – private sector

Mayo and Newman (2014) Tackling the housing crisis Deep purple – Local Authority, mid – Housing Association, light – private sector

Fall in social rented housing construction since 1980s Dramatic fall in social rented housebuilding since 1970s/1980s Together with Right to Buy – selling off of a large number of local authority owned homes Results in major gap between demand for and supply of affordable housing Why has this happened? – look at history of housing policy in UK – especially since 1970s/1980s for many social housing has always been the ‘wobbly pillar of the welfare state’

CLASS election 2015 what’s at stake for housing

Housing supply in London Key factor underlying housing crisis in London is shortage of private/social and affordable housing London’s population growing 100,000 a year – estimates are that London needs to build 50,000 to 60,000 homes a year to keep up with demand But fewer than 20,000 new homes completed in London in 2015 Failure to build enough homes in London over last 30 years – long-term trend of under-supply

Impact of shortage of housing in London Push up house prices and priced all but those on high incomes out of home ownership Shortage of social rented housing has pushed more people on low incomes into private rented sector (Shelter. 2016) Key issue is impact of changes in housing market and housing policy on poverty in UK

http://www. jrf. org. uk/policy-briefing/housing http://www.jrf.org.uk/policy-briefing/housing?utm_medium=email&utm_campaign=Weekly+publications+and+blogs+wb+9th+February+to+23rd+February+2015&utm_content=Weekly+publications+and+blogs+wb+9th+February+to+23rd+February+2015+Version+B+CID_f0d0c9a84cd1f74e8bb15d61dd95e018&utm_source=Email%20marketing%20software&utm_term=housing

references Aldridge. H et al (2015) London’s Poverty Profile. Trust for London/New Policy Institute DCLG (2015) English Housing Survey Headline Report 2013/14 Harriott. S and Matthews. L (2009) Introducing affordable housing. CIH Shelter (2016) Making renting more affordable for more Londoner’s. April 2016 Shelter (2015) Housing and Poverty. June 2015