Wednesday, 16 May 2012

Mind the Gap

Posted in: Discussion | Policy forum

affordable, council, private, prohibitative, rent, Shapps

20/12/2010 3:14 pm

Chris

Chris

Location: All over the place
Posts: 282

As we prepare to tuck in to our Christmas turkeys and wish for peace on Earth and all things to all men etc, perhaps we can return to some rational debate.

Can the private sector fill the housing needs of the average and low paid worker?

This is a crucial question, especially as our current Housing Minister seems convinced that the Social Sector is to be reserved for those who are not economically active and without independent means – the poorest unemployed in other words.

In 1951, across the UK, there were 4 million homes occupied by their owners, 2.5 million socially rented homes, and 7.1 million privately rented homes. By the birth of Thatcherism there were 6.6 million socially rented homes (LA and RSL combined), 2.4 million privately rented and 12 million owner occupied. At the onset of Brown at the helm there were only 5 million socially rented homes, 3.2 million private and 18 million owner occupied homes

This means that in 2007 there were 12 million more homes than in 1951. The population growth over that period was only 5 million, yet homelessness and waiting lists have risen unchecked. The sector is well aware of the change in household make up, with more young singles and more elderly, has meant smaller household units. The 7 million extra homes over population growth have not alleviated housing demand. Indeed demand has grown so fast that prices have become unaffordable. Yet the future plans do little to increase supply, indeed look to maximise existing supply through multiple use.

However, what is most telling as a deficit in current policy is the role of the private sector. Despite unprecedented benefits and allowances being targeted at private landlords, and the massive housing benefit burden tolerated to make rental profits viable, the private sector has not stepped up to the plate. Their 30% growth compared with 50% increase in private homes shows little strong will to play a socially responsible role. Indeed, across the whole period, whilst privately owned homes have increased by 300%, the private rented home sector has shrunk 60%.

The private sector has hardly, therefore, proven a value for money outcome for the £billions paid out from the Treasury to support it. So why then is the Housing Minister gambling all on this sector filling the gap between need and supply?

Clearly, investment in socially supporting affordable housing, and protecting the remaining supply, is essential to deal with the needs of both people to be housed and of business to continue to have both workers and customers able to fulfil their role in the economy.

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Anon Ymous

Anon Ymous

Posts: 6

20/12/2010 6:13 pm

The problem with the private rented sector is so many private landlords bought second and third properties to let at the height of the property boom. They still have massive mortgages to pay off and will not reduce their rents until they are forced to.

And if you do that you are codemning a lot of ordinary people to a lieftime of debt through negative equity.

Of course you could say these 'ordinary people' were greedy and stupid and overstretched themselves to fleece people less fortunate than themselves. But by making it so easy, and desirable, to get into the buy-to-let game in the mid-late nineties, the last thing the Labour government was promoting was 'social responsibility.'

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Sidney Webb

Sidney Webb

Location: South East England
Posts: 224

21/12/2010 9:30 am

Understand the sentiment Anon Ymous but you may be factually incorrect. The buy to let mortgages, or business financing used to build a private rental portfolio is not like the mortgage you or I would get for our own home. The expectation of loan to value is different and the interest rate more beneficial. If they are in negative equity then they are pretty poor at business and should have been better advised. The options available for these businesses are considerable, and few would lead to destitution so please do not lose too much sleep on their behalf.

I think the failure is not so much with the sector but the government's reliance upon it. Private Landlords since the dawn of time have never been socially based. They have not needed to be apologetic about this, it is not as though they have claimed to be other than in it for the money. Government failed to recognise that the private sector does not create new housing but simply repackages the existing. In this way they act almost like parasites, but again they have never claimed to be anything else.

That the current government is ignoring the fact that private landlords neither produce more housing nor let at affordable rents is a disgrace. Frankly Shapps should admit this is another fine mess and resign.

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Chris

Chris

Location: All over the place
Posts: 282

21/12/2010 10:39 pm

So are there any proponnents of the government view?

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Sidney Webb

Sidney Webb

Location: South East England
Posts: 224

09/03/2011 2:01 pm

Looking at these stats shows that over 1/5 Million homes were built on average each year since 1951 - that is more than Shapps intends to build across an entire parliament. This is no way will alleviate the shortage of housing supply - and all of his protests against tenants will not change that fact. The private sector can not provide the answer - indeed they never have done so.

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tags Accountability, advice, affordable, Affordable Home Ownership, affordable homes, affordable housing, antisocial tenant, benefits, Big Society, budget, building, consultation, councils, Cuts, debate, development, discussion, early intervention, Government, housing benefit, housing policy, politics, rent, support, tsa

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