If we fail to tackle the housing crisis, the penalties will be more than untold human misery, it may break apart an already fractured nation. The tragedy is we know how to fix it – the question is, do we really want to?
By Mark Cantrell
THERE are fracture lines aplenty in a Britain fulminating over Brexit, but it’s the housing crisis that may finally break the nation asunder.
That almost apocalyptic note was delivered in her usual calm, measured manner by Chartered Institute of Housing (CIH) chief, Terrie Alafat CBE, as she formally welcomed delegates to the organisation’s conference in Manchester.
But this was no ‘the end is nigh’ speech; Alafat offered her audience a dollop of ‘can do’ optimism: the housing crisis can be fixed, if we – the sector, the Government, civil society – are prepared to put our money where our mouth is and build social housing.
Britain – England in particular – she reminded us, is fraught by division. Brexit exacerbates some, others have long bubbled under the surface – age, class, race, gender, region – but a worsening housing crisis threatens to widen these cracks.
“Our housing system is failing all of us,” she said. “Housing has the power to heal the divisions that risk breaking our whole nation apart.”
Alafat presented research put together by a coalition of organisations, including the CIH but also taking in the National Housing Federation (NHF), Shelter, Crisis, and the Campaign to Protect Rural England (CPRE).
The findings of this joint effort claim to offer the keys to resolving the housing crisis in England – but only if ministers are prepared to deliver social housing at scale. This means investing £12.8 billion a year for the next decade to kickstart a nationwide programme to build around 1.5 million social homes for rent (90,000) and shared ownership properties to buy. In turn, it argues, this would stimulate the economy, help more buyers get on the housing ladder, and provide homes that are genuinely affordable for people to rent.
“Our national housing crisis is spiralling out of control and demands urgent attention,” Alafat said. “It creates a terrible cost in terms of both social instability and wasted money. But this research shows it doesn’t have to be like this. There is a solution; a solution that would add billions to our national economy and help millions of our fellow citizens build stable lives and strong families in sustainable communities.”
Ministers – the Chancellor of the Exchequer especially – may baulk at the multi-billion pound price tag but the organisations behind the research claim the investment will bring significant social and economic benefits for the country.
Furthermore, the coalition argues that a stimulus from the Government is the only way to solve the housing crisis, since the private market alone cannot build the quantities or types of homes the country needs.
“The steep decline in social housing is at the core of the housing emergency that now effects so many. Social homes are what this country wants and what it needs – they are the best solution to the problems we face and an opportunity to unite the country,” said Polly Neate, chief executive of Shelter.
“Successive governments have failed to build social housing – while homelessness spirals and half of young people will never be able to buy. Now is the time to act for the millions of people trapped in housing poverty, and invest real resources where it matters most. All told, solving the housing crisis means investing a total of £146 billion (including inflation) over the next 10 years. This would cover about 44% of the total cost of this construction boom, unlocking the rest of the money that can then be raised from other sources.
The research also finds that investing in new homes would add £120 billion to the economy each year – £1.2 trillion over the decade – through the creation of local jobs in construction and other industries. Not a bad return on investment, some might say.
In yet another win, the Government’s benefits bill would also be much reduced over the course of the decade. Last year, £22.3 billion in housing benefit was paid out to help cover rent for millions of low-income tenants. By moving many of these tenants into social housing, it is argued, the Government would need to spend less on housing benefit over time, saving tens of millions of pounds every year. This would also allow more people to build a solid foundation for their lives in social housing, aiding social mobility.
“Right now, thousands of people across England are finding themselves on the brink of homelessness or are already experiencing it, in large part because of our huge shortage of social housing,” said Jon Sparkes, chief executive of Crisis.
“The good news is we know it doesn’t have to be this way – and we know why this situation must change urgently. Homelessness has devastating effects on people’s mental and physical wellbeing that no one should have to experience. This can’t go on.
“Ultimately Government must invest in the number of social homes we need. Not only will this save the country millions of pounds in the long term, it will help us end homelessness once and for all – something we can’t afford to put off any longer.”
Last year the Government spent £1.27 billion on “affordable” housing, making it one of the smallest government budgets, down 70% on 2010 levels. As a result, far fewer social rented homes are being built. In 2017/18, just 5,400 were built, compared to almost 36,000 in 2010/11 before funding was cut.
The coalition’s research says “chronic under-investment” in housing has led to a 169% increase in rough sleeping, while the number of households in temporary accommodation is at a 10-year high. What’s more, 1.3 million children are currently living in poverty in expensive privately rented accommodation, while many young people are stuck at home with their parents, unable to build an independent life and start families of their own.
“Everyone needs a secure, stable and affordable place to live, but right now there are more than 170,000 families in rural communities, who are on social housing waiting lists. At the current rate of building, it would take 130 years just to meet this backlog,” said Crispin Truman, chief executive of the CPRE.
“Councils and housing associations can play a key role in building the homes the nation needs, but only if they are properly funded. This investment in homes for social rent and other low-cost tenures would help to guarantee the future prosperity of our rural communities, and society as a whole.”
Kate Henderson, chief executive of the NHF, said: “The housing crisis is an economic, social and human catastrophe. But it can be solved. And now, for the first time, we know exactly how much it will cost. By investing £12.8 billion in affordable housing every year for the next decade, the Government can ensure millions of people have a stable and affordable place to live, at the same time as strengthening the economy across the country.
“By investing this money in affordable housing at the upcoming spending review, the Government can help families all across the country to flourish. They can help children get out of poverty, give young voters a foot up on the housing ladder and help out private renters who have to empty their bank account every month.”
But it all depends on politicians and their willingness not only to listen – but to act.
As Alafat added: “Brexit has so dominated the political agenda that there is a real risk of housing, along with other crucial issues, being squeezed out – we cannot allow that to happen.”
There doesn’t need to be an apocalypse.
This article first appeared in the print edition of Northern Housing magazine, #5 July 2019