Housing and Gordon Brown

Argus title : Shortage of housing is desperate

The Guardian newspaper recently reported that a “major building programme designed to increase the supply of affordable homes is expected to be a centre-piece of Gordon Brown’s agenda”.

This is perhaps fortunate for him. When he speaks at the Dome tomorrow in the Brighton Festival he will be lobbied by protesters from “Priced Out” the campaign for affordable house prices.
The housing minister, Yvette Cooper, one of Brown’s inner circle, has repeatedly warned that demand for houses is outstripping supply and that unless more homes are built, 70% of first time buyers will not be able to afford a home.
The lobby of Gordon Brown’s Festival appearance has been widely publicised. This raises the fascinating possibility that Brown may use his speech to make a major statement on housing. He could hardly choose a more appropriate time or place to do so.
The number of homeless people in Britain has risen to 391,000 and across the country 93,000 live in temporary accommodation. A million children currently live in sub-standard accommodation.
As for Brighton & Hove, it is the fastest-growing property market in Britain. As the Argus recently reported, figures from the Land Registry show the value of a typical home in the city is growing by £74 per day, more than £500 per week. Last year the average asking price jumped £27,000.
A spokesman for “Priced Out” said: “Despite the Chancellor’s stated intention to keep a tight rein on house prices, they have trebled during his tenure. According to the Halifax, prices are now unaffordable for first-time buyers in 75 per cent of UK towns. The situation in Brighton is particularly bad.”
BHT (formerly Brighton Housing Trust) is a prominent local housing and homelessness charity. I met with Chief Executive Andy Winter and Deputy John Holmstrom over fish and chips at Bardsley’s to explore their views.
I asked Andy how bad things really are. He said: “The property owning democracy is turning into a nightmare for some people. The increase in interest rates this week will add to the number of people who cannot afford to buy a home and, of those who can, more and more will be facing repossessions and personal insolvency”.
Andy pointed to the soaring rates of repossessions in Sussex, which are up from 843 in 2005 to 1,032 in 2006. In Brighton the increase was from 184 in 2005 to 221 to 2006; in Hastings from 136 to 167; and in Eastbourne from 129 to 172. Some 1,749 local people were declared bankrupt in 2006, 0.65% of population. Brighton was the 21st on a ranking of all local authority areas in the UK.”

Andy said: “The number of homes repossessed could more than double if interest rates rise. Nationally more than 115 families a day will lose their homes because they cannot afford soaring mortgage costs and other debts. This would mean repossessions rising nationally from 17,000 a year to almost 43,000 in 2009.”
The economy in Brighton & Hove is thriving. The city’s success in marketing itself as “the place to be” has led to a situation in which, according to some estimates, the majority of people buying homes here come from London. The City’s population increased by a massive 1.7% during 2006.

Andy commented “Such successes have a cost, and that cost is the extraordinary increase in property prices, so much so that few local people can afford to get on the property ladder.

“The challenge for all political parties is how to balance economic development needs and how to deliver local services to those already here. There is an increasing divide between those who have, and those who do not.”

John Holmstrom sees at first hand the terrible suffering caused by homelessness. He said “Last year at BHT’s Advice Centre we opened 2,642 new cases, and we prevented rough sleeping in 332 out of 688 people who were roofless or threatened with sleeping rough.”

He challenges the perception that homeless people come from outside the city. He says “It is true that if people from outside the City buy homes here it puts pressure on the market. However, of the 2,500 cases of actual or threatened homelessness or housing need seen last year at BHT Advice Centre, 86% had a local connection.” He added “Homelessness is a symptom of housing shortage.”

John Holmström began working as a housing adviser for BHT in 1984. He recalls at that time nobody left the Housing Advice Service without somewhere to stay that night. However, by 1987 the situation had changed. Homeless people often left without shelter because there was no where to go.

He said “The property crash in the early 1990s, caused great hardship, but did have one benefit for homeless people – an abundance of rented bed sits came onto the market. But as the property market strengthened again, the private rented sector stopped absorbing homeless people. Market fluctuation became a factor in increasing homelessness.”

John Holmström is clear about the housing market. “In a city like Brighton & Hove, where the private rented sector accounts for 22% of all homes, social housing, at 13%, is little more than a side-show with little movement and only a few hundred homes becoming available each year. Housing and homelessness cannot be left to market forces. Housing must be managed. There has to be intervention and money is required”.

Andy said “Households on the lowest incomes pay a premium for being poor. A recent report by the Family Welfare Association and Save the Children said that everyday living costs £1,000 more per family per year if that family is on a low income.

“For example, those on low incomes are more likely to have pre-payment meters for fuel, paying £103 more for gas and electricity than quarterly billed customers and £146 more than those paying by direct debit. Household goods are cheaper for those with money. A basic cooker bought upfront may cost £159, but the same model bought on credit may cost more than twice as much. Low income families such as this become casualties of a “booming” housing market.”
A government review indicates that 220,000 new homes a year are needed, well above the levels of the current house-building programme. Council tenants’ right to buy their houses has not been balanced by a right to build for councils. The pressure has been intensified by the increase in numbers of people buying to let, often because of unease about other investment options, including pension schemes.
In addition, there is an increase in the number of people living alone. Latest projections show that the number of households in England will grow by 209,000 a year up to 2026, with 72% of these being single-person households. The average number of people in a household will fall from around 2.3 to 2.1 during the next two decades.
The Treasury is exploring a range of measures to increase house construction, release land, speed planning applications, and ease access to ownership through shared equity schemes. There are some indications that Gordon Brown may be poised to lift some restrictions on council house building, though these are unlikely to go far enough.

I asked Andy and John what measures Gordon Brown should take forward in the first 100 days of a new administration.

Andy said “I’d tell him the market cannot solve homelessness and housing need. Inflated property prices exclude local people from the housing market. There needs to be a rapid increase in housing supply with genuine partnership and a level playing field between the sectors.”

He added “I’d support proposals for punitive taxes on unearned gains of owners of 500,000 second homes and buy-to-let houses which are deliberately left empty.”

John said “I’d tell Gordon Brown that people on low incomes or who are unemployed and not ‘in priority need’ according to the homelessness legislation, don’t attract attention and are often excluded from government initiatives. This means they become desperate. There is a sense of complete powerlessness amongst these clients. The lack of options and opportunities can become overwhelming.

“What I’m hoping for is a careful examination of how housing benefit works and how it can be used to create a level playing field between working tenants and those who are on a low income or unemployed.”

“Above all” Andy said “We need an end to bureaucracy and obsession with targets. We need a climate where you can honestly discuss the realities of homelessness without fear of condemnation by national and local government officials and threats to funding.”
Neither man called for restrictions on council house building to be lifted. So I’ll add that one.
BHT’s Advice Centre can be reached on 01273-234737.

Leave a Reply

Your email address will not be published. Required fields are marked *