Archive for the ‘Public sector cuts’ Category

Letters: Great debate on Britain’s housing crisis

Thursday, September 1st, 2011

The National Housing Federation has stated that it expects home ownership in England to fall to mid-80s levels, slumping to just 63.8% over the next decade (Minister vows to get UK building again as home ownership slumps, 31 August). But to address a critical shortage of homes the government has previously made the rather fanciful announcement that it aims to create 170,000 new affordable homes by 2015. In 2010-11 just 105,000 homes were built in England – the lowest level since the 1920s.

I’ve just had to abandon a major scheme that would have provided over 750 new homes, 25% of which would have been affordable, in an area of Essex that sorely needs them. This was because the amount of money the social landlords were initially able to pay for more than 180 homes was drastically cut as they in turn had their funding cut. This made the development untenable as I simply couldn’t afford to build 180-plus homes at a loss.

If the government is serious about increasing housing provision, it needs to recognise that cutting funding to social landlords is not going to help achieve that aim. Social landlords, in turn, need to start concentrating only on helping the poorest households, not mid-high income earners. Currently the rules are so arbitrary that for some affordable housing schemes you can earn as much as £60,000 and qualify for assistance. Others aren’t even means-tested, so you can earn £100,000 but still qualify for a handsome discount as long as you live or work locally.

Only by ending the inequity of a system that fails to address the needs of the poorest households, and freeing the housing sector from the myriad of red tape, taxes and levies that stifle development, will this country be able to get anywhere near delivering the number of new homes, both private and affordable, that it so urgently needs.

Bob Weston

Chairman and chief executive, Weston Homes

•?A well-aimed piece of PR spin from the National Housing Federation has managed to prompt a series of responses in your paper, mostly supporting the aim of the PR, that is to say support for a rapid increase in housebuilding. However, both the reported “facts” and the response need questioning.

1) The decline in home ownership was a projection based on the premise of higher price rises than is likely, given the need for “readjustment” in the housing market to historic links with earnings.

2) The current high rates of private ownership were only possible due to unsustainable reckless lending and borrowing.

3) One big attraction of home ownership is the free money many people have gained through rising prices. When prices are stagnant or falling, the high costs of home ownership may not be so attractive to young people who want to move around.

4) If enough houses were to be built to substantially reduce prices, many will be bought up by rich people and budding mass landlords, and many existing mortgage holders would experience high degrees of negative equity, exacerbated by the rise in interest rates that must happen sometime in the future.

5) As with other goods, it is not so much how many houses we have but how we share them out that is really important. It is the gross inequality in our society, more than anything, that is creating this problem.

Chris Savory

Bridport, Dorset

•?Allegra Stratton (Inside politics: Coalition fears it is unravelling right-to-buy revolution, 1 September) highlights the government’s unease at the burgeoning housing crisis and the low rate of housebuilding. In London, the affordable housing budget has been cut by two-thirds. Boris Johnson isn’t offering any new ideas to help private tenants suffering from record high rents. Nor has Boris offered anything new to reverse the rise in homelessness he had previously predicted. In 2008, Boris promised “a network of Community Land Trusts”, but not a single trust has been set up in London. The mayor needs to lobby for better protection for private tenants, and a realistic housing budget that can provide the low-cost social homes we need. In the meantime, he needs to put all his money and land into keeping rents as low as possible.

Jenny Jones AM

Green candidate for London mayor

•?The mayor of London, Boris Johnson, has long advocated community-led development and the benefits this can bring for building stronger communities.

Contrary to the suggestion in your article, the mayor has already determined that the community should hold the entire freehold of the St Clement’s site in Tower Hamlets in trust. He has also made clear that a community board should oversee management of the homes. This would make St Clement’s the country’s first urban CLT. The site is currently being procured on this basis, and the decision will be subject to the usual procurement rules. But it is clear that whoever is the successful bidder we intend St Clement’s to be held in trust, with the management overseen by the community.

Richard Blakeway

London mayor’s adviser for housing

•?Given the latest evidence that the UK welfare and housing system is failing to break the association between unemployment, poverty and homelessness (Homelessness could spread to middle class, study warns, 31 August), the time is now ripe for a Great Debate – one as “radical” and imaginative as the 1942 Beveridge report – on how to manage social and economic affairs in ways that meet the wellbeing of the many rather than the few. We could do with a quality broadsheet leading such a debate. Any suggestions?

Charlie Cooper

Lecturer in social policy, University of Hull

•?Not only is the current level of home owership even lower than the official figures indicate, but it is also declining at a much faster rate than forecast.

This is because up to three million homes included in the figure for home ownership are in fact leasehold, and leaseholders do not own their homes but merely have the right to live there until the lease expires. In order to stay in their homes leaseholders will have to pay large sums of money to the freeholder for an extension of the lease.

At the same time around half of all newly built homes are now flats, the majority of which are sold on a leasehold basis, reducing still further the proportion of households who will genuinely own their homes.

Nigel Wilkins

Chair, Campaign for the Abolition of Residential Leasehold

•?The key to the housing “problem” is the number of homes, not the proportion of owner-occupiers. There is inevitably a significant proportion of the population who at any given time would be better suited to renting than buying their homes. There is pressure to “get on to the housing ladder” for financial reasons; pressure that if you do not start early enough you will lose out financially. As a result the economy is driven by the housing market to an unfortunate extent. The key issue should be adequate housing to buy or rent. One simple – but probably politically unacceptable – measure would be to try to separate the concepts of a house as a “home” and as an “investment” by removing capital gains tax exemption from the principal private residence. The sky did not fall in when tax relief on mortgage interest was removed.

Paul Russell

Winchester

•?The National Housing Federation talks of the “chronic under-supply of housing” in the context of unprecedented developmental pressure on green spaces. However, markets are composed of supply and demand. England is the most densely populated country in Europe. Given that the UK is experiencing its highest rate of population growth for 50 years, with an estimated 10 million more citizens over the next 15 years, should we not also be talking about – and addressing – our chronic over-supply of people?

Simon Ross

Chief executive, Population Matters


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Homelessness could spread to middle class, Crisis study warns

Wednesday, August 31st, 2011

Homelessness charity points to direct link between economic downturn and welfare cuts, and rising numbers living on streets

The economic downturn and the government’s deep cuts to welfare will drive up homelessness over the next few years, raising the spectre of middle class people living on the streets, a major study warns.

The report by the homelessness charity Crisis, seen by the Guardian, says there is a direct link between the downturn and rising homelessness as cuts to services and draconian changes to benefits shred the traditional welfare safety net.

In the 120-page study, co-authored by academics at the University of York and Heriot-Watt University, Crisis highlights figures released over the summer that show councils have reported 44,160 people accepted as homeless and placed in social housing, an increase of 10% on the previous year and the first increase in almost a decade.

Last year another 189,000 people were also placed in temporary accommodation – such as small hotels and B&Bs – to prevent them from becoming homeless, an increase of 14% on the previous year.

Crisis says that with no sign of economic recovery in sight, there are already signs that homelessness is returning to British streets. In London, rough sleeping, the most visible form of homelessness, rose by 8% last year. Strikingly, more than half of the capital’s 3,600 rough sleepers are now not British citizens: most are migrants from eastern Europe who cannot find work and, unable to get benefits or return home, are left to fend for themselves on the streets.

The charity says the evidence is that the current recession has seen the poor suffer the most, but other parts of society may be in jeopardy if the government’s radical welfare agenda is acted on as the economy stutters.

“Any significant reduction of the welfare safety net in the UK as a result of coalition reforms may, of course, bring the scenario of middle-class homelessness that much closer,” the report states.

The charity says that the government needs to reverse cuts to housing benefit and invest urgently in new housing. It also calls on ministers to withdraw the most radical provisions in the localism bill, which would make “temporary accommodation” for needy families just that. Under the new legislation, councils would be forced to remove parents and children who have been in a hotel for a year. At present the assistance is open-ended.

There is also an alarming trend in what the charity calls the “hidden homeless” – families forced to squeeze into one room rather than a flat. It says 630,000 households are now “overcrowded”, with London and the south-east the worst hit. This trend could worsen: this summer a survey by the National Landlords Association found more than half of private landlords were planning to reduce the number of properties they let to tenants on housing benefits. Crisis says more families will be forced to share an ever decreasing number of homes.

In a separate report, Channel 4 News will broadcast further evidence that official figures underestimate the true picture of homelessness. In Crawley, West Sussex, the Open House hostel said it turned away people needing a bed almost 2,000 times last year, although official figures estimate there are just seven homeless people in the town. Two-thirds of homelessness organisations nationwide told Channel 4 there had been a rise in rough sleeping in their area.

Leslie Morphy, Crisis’s chief executive, said: “We are extremely worried. Homelessness in both its visible and hidden forms is already rising and as the economic downturn causes further increases in unemployment and pressure on households’ finances, homelessness is likely to continue to rise. This research is clear that it is the welfare and housing systems in the UK that traditionally have broken the link between unemployment and poverty and homelessness, yet these are now being radically dismantled by the coalition government. The government must listen and change course before this flow of homeless people becomes a flood.”

Crisis argues that instead of doubling its efforts to end the “scandal” of homelessness, the government is in effect making it impossible for those on low incomes to pay their rent. It says in the past British welfare policy, unlike that in the US, has linked housing benefit to actual rents. But the government’s changes break this link and mean that claimants will be priced out of swaths of the country – or end up on the streets in wealthy regions.

The report also says the government’s “affordable” house-building regime is likely to generate fewer than 50,000 homes by 2015, “well short of the 80,000 required to meet ministers’ targets”. Gone will be the lifetime tenancies offered by councils which had to give priority to those in need. Instead, under new powers, local authorities will be able to choose families with “local connections”.

With the coalition’s welfare reform bill heading to the Lords and MPs voting on the localism bill next week, Labour said Crisis’s warnings were a “timely reminder of a looming homeless catastrophe”. Karen Buck, Labour’s welfare spokesperson, said the government had played down the rising number of people who thanks to the economic downturn were forced to rely on housing benefit.

She said that since the government took power another 150,000 families had been forced on to housing benefit. “The numbers relying on housing benefit to help with housing costs have been soaring. These figures include not just the unemployed but hundreds of thousands of working families. Rising rents, benefit cuts and housing shortages risk a homeless catastrophe will with all the associated human and financial costs.”

The Department for Communities and Local Government said: “Ministers have always made clear their commitment to ensure the most vulnerable in society are protected, which is why the government is investing £400m in preventing homelessness, and has announced plans to extend the London project, No Second Night Out, across the country so no one spends more than one night sleeping rough.

“But the most important thing the government can do to help struggling households to stay in their homes is to keep interest rates low, and to do that we must cut the deficit. That is why we are introducing reforms that will cut the housing benefit bill. But to ensure a smooth transition to this new system, the government is giving councils a £190m fund to help those families most in need.

“Far from the claims made by Crisis, the government’s £4.5bn affordable homes programme is set to exceed expectations and deliver up to 170,000 affordable homes by 2015.”

Randeep Ramesh


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