According to The Department of Communities and Local Government there are more than 1.7million families on housing waiting lists. Considering that Local Authorities throughout England commissioned the building of just 380 new homes in Q1 2011 we are unlikely to ever eradicate that backlog.
Instead, the solution pursued by governments has been a mixture of social housing and encouraging affordable home building, but the scale has been insufficient to solve the problem. For instance, from 2009-2010 a modest total of 55,000 affordable homes were completed. Today, these homes are not just being sought after by those considered 'poor', the surging expense of running a home means that these homes are now desirable to all but the very few.
We have upwards of 3.5 million households renting privately in the UK. Private renting dwellers in effect are trapped in that they are virtually ineligible for social housing. More than 70% of these households are in employment and receive no Housing Benefit or Council Tax Relief. An unsustainable aspect of their predicament is that according to the Office of National Statistics the average private rental bill now surpasses £8,100 per year. This does not include the cost of the average dual energy bill of £1,200 or indeed house repair, maintenance, upkeep or insurance costs.
The common myth around private rental housing is the belief that they are often larger homes that allow tenants to split the costs by multi-occupancy. Statistics, however, show that two thirds of privately rented homes are two-bedrooms or less and contain two adults or less. One third of these homes have been designated by housing inspectors as unfit for human habitation. These people can best be described as the working poor.
Those renting privately are stuck in a rut of unstable housing arrangements were a lease can be terminated or rents increased without any say by the tenant. And rents have increased. Recently the average rental price broke through the £700 a month barrier and showed a 4.5% increase on the year. The net result of their difficulties is that the Halifax calculates that it would be cheaper for these people to own their own home than to rent.
But, of course, owning your own home has also gotten more difficult since the credit crunch. The scrapping of the 95% mortgage makes it a little more difficult for prospective buyers to raise a deposit. Also, given that only the top 35% of households in the UK earn more than £26K after tax, the size of the mortgage required for the average £160K property is at least £50,000 more than that which is available to the average family. This means that families have to save longer before they can own their own home.
A key consequence of this has been a rise in the average age of purchase, meaning that most new mortgage holders will reach retirement age having not yet paid off their home. Is it any wonder that those in the housing trade remark that the first time buyer is practically extinct?
As the cost of renting privately climbs, house construction tumbles. The stagnation of wages and more stringent mortgage lending means that the prospect of owning your own home is dwindling. Added to that, the social housing sector is so overcrowded that that putting your name on a waiting list is an exercise in fantasy worthy of only the eternal optimist. The ethical solution to this is a public house building programme to widen the availability of social renting to ordinary hardworking households.
The Home Builders Federation say that every home built creates 1.5 jobs immediately but also four times that number in the mainstream workforce. Thus, it is conceivable that 100,000 homes would add at least a full 1% to GDP, and increase the tax take by nearly £3billion whilst simultaneously decreasing the welfare bill by at least the same amount through reduced unemployment. The road map to ethical housing and economic recovery lies in a public house building programme.
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