Rise and fall of council housing

The rise and fall of council housing was charted by The Guardian at the foot of an article about local authority house building published on Saturday March 25th [https://www.theguardian.com/money/2017/mar/25/how-one-council-is-beating-britain-housing-crisis-sheffield].

Number of permanent dwellings completed, by tenure.
Number of permanent dwellings completed, by tenure.
  • 1954 Local authority building hits a peak of 239,580 in 1954.
  • 1979 40% of the British population are living in local authority housing.
  • 1980 Conservative government brings in ‘the right to buy’ – many tenants buy their council homes and limits are put on council borrowing for building new ones.
  • 2004 Building houses by local authorities falls to a low of 130 homes in the UK.

England: Trends in tenure

The latest English Housing Survey 2015-16 on people’s housing circumstances has just been published by

“Government data reveals that the private rented sector has doubled in size since 2004, with almost half of all people in England aged 25 to 34 paying a private landlord for their accommodation.” The Guardian March 2nd 2017

In 2015, the survey estimated there were 23.5m households in England, including occupied and vacant homes. Of these, 14.8m (63%) were owner occupied, 4.7m (20%) were private rented, 1.7m (7%) were local authority and 2.4m (10%) were housing association homes [Figure 2.1 and Annex Table 2.1 English Housing Survey].
trends-in-tenure-1980-2016
Trends in tenure 1980-2016 [figure 1.1 English Housing Survey]
This shows a continuation in 21st century patterns of decreased owner-occupation and increased private renting particularly among younger and less affluent households.
“On average, those buying their home with a mortgage spent 18% of their household income on mortgage payments where rent payments were 28% of household income for social renters and 35% of household income for private renters.” [Headline report p2

In 2015-16 outright owner households were predominately older people; couples with no dependent children (45%) and one person households (33%). Almost half (47%) of households buying with a mortgage had dependent children compared with just 8% of outright owners. In the past decade (2005-06 to 2015-16) the proportion of households in the private rented sector with children increased from 30% to 36% (about 945,000 more households).  Over the same period, the proportion of households in the social rented sector with children decreased from 36% to 32% (around 123,000 fewer households).

Fixing our broken housing market

The Government white paper ‘Fixing our broken housing market’ sets out a broad range of reforms that the Department for Communities and Local Government plans to introduce to help reform the housing market and boost the supply of new homes in England (7 Feb 2017).

What does 250,000 houses look like?  Newcastle and Sunderland combined!

BBC map. There are 250,000 homes across Newcastle and Sunderland.
BBC map. There are 250,000 homes across Newcastle and Sunderland.

Government ministers are saying England needs 250,000 new homes every year. The new housing strategy for England intends to give councils powers to put pressure on developers to start building on land they own but haven’t yet developed (so called ‘land banks’ accused of preventing a supply increase that would cause prices to fall).  The time allowed between planning permission and the start of building is to be reduced from three to two years.  Higher densities and high-rise building are encouraged where supply is short.

Councils will have to produce an up-to-date plan for housing supply/demand. A number of councils have already submitted plans – including Newcastle (see map: The Telegraph 7 Feb 2017).  According to The Independent the measures effectively “scrap the Coalition 2010 housebuilding planning framework” and it means a return to a system used by the Labour government before 2010 (The Independent 7 Feb 2017).

There is also a promise to make renting more ‘family-friendly’ via longer tenancies for some tenants in new-build properties. The government is also seeking to get rid of rogue landlords and letting agents’ fees (possibly bringing England into line with Scotland).  A new consultation on planning and affordable housing for Build to Rent has been launched (ends May 1st 2017).

Protection is promised for the green belt, which is only to be built on ‘in exceptional circumstances’.

However, the plans have met with criticism:

“There needs to be an honest admission that there’s no chance of building the target 250,000 homes a year through the private market alone.”  The Guardian 7 Feb 2017

“A policy encouraging the use of compulsory purchase orders to seize sites when they are not being built on fast enough is likely to worry developers, and doesn’t take into account how long these sites can take to prepare before they’re ready for building.”   The Telegraph 7 Feb 2017

“Former Conservative housing minister Grant Shapps told the BBC’s Daily Politics the problem would not be solved simply ‘by slotting in a few more homes in converted former industrial sites'”.  BBC 7 Feb 2017

“‘Talk of longer-term tenancies is welcome but risks being disingenuous unless these are rolled out across the board, not just for a handful of people living in new build-to-rent properties,’ said Graeme Brown, interim chief executive of Shelter.” The Telegraph 7 Feb 2017

250,000 plus homeless in England

Housing charity Shelter has put together four sets of official 2016 data to come up with a total of 254,514 homeless people in England.  Apart from London, there are black spots in Birmingham, Brighton and Luton.

The data Shelter aggregated came from the statistics on rough sleepers, those in temporary accommodation, people housed in hostels and people waiting to be housed by council social services departments.

The map below illustrates homeless people as a proportion of the local population in England’s local authorities (council areas).

Shelter map published by the BBC (Dec 1st 2016)
Shelter map published by the BBC (Dec 1st 2016)

Asylum seekers mapped

Map split by local authority_final_960x640_update Q2_2016

Asylum seekers in receipt of Section 95 support, by local authority, per million population, at the end of June 2016

Locally-based statistics are not always easily found.  Government figures are produced in dense spreadsheets and summarised in aggregated reports.  However, in August 2016 the Home Office produced a UK-wide map of asylum seekers in receipt their support.  (There is also an interactive web tool: What are migration levels like in your area?)

People seeking asylum are excluded from claiming welfare benefits and usually from working.  What they can access is support in the form of housing and basic expenses through a Home Office scheme “under Section 95” (part 6 of the Immigration and Asylum Act 1999). This scheme  supports those whose claims are ongoing and who are destitute (or about to become destitute) and the numbers for Newcastle are shown in the graph below.

asylum seekers graph
Total asylum seekers receiving support in Newcastle upon Tyne 2003-16

(Larger chart)

The data includes asylum seekers and their dependants and failed asylum seekers who remain supported  if they have children at the time their claim is finally rejected.

The pattern shows the Home Office is supporting less than half the number of asylum seekers in Newcastle it did in the first quarter of 2016 compared to the peak in the first quarter of 2004.  Although numbers have been rising since the end of 2013, they were previously much higher (2004-2008). In 2004 about a third of all asylum seekers who came to NE England were accommodated in Newcastle; by comparison in 2016 this had dropped to a fifth.  The proportion was highest in Q2 of 2006 (38.41%) and at its lowest in Q4 2013 (13.90%).  This partly reflects the way the contract holder GS4 has distributed asylum seekers throughout NE England from May 2011.  [Calculated from: Immigration Statistics – April to June 2016: Asylum (pub. 25 Aug 2016), vol 4, table as 16 q.   Available from: https://www.gov.uk/government/publications/immigration-statistics-april-to-june-2016/asylum ]

Home ownership in decline

In the 1980s most people owned their home and this sector was rising, others rented from a local authority or other social rented housing provider and the private rented sector was relatively small.  We expected to continue to be a nation of home owners in the 21st century.  Today things are a bit different.  The proportion of private rented households nearly doubled between 2003 and 2015.  The Resolution Foundation, an independent policy think-tank organisation, has published a research analysis of government data showing that home ownership in England peaked in 2003 at 71% of the population and has now dropped to just under 64% (graphs in the news reports below).  In England house prices for first-time buyers have risen from an average of just under £30,000 in the 1980s to more than £150,000 over that period.

In the NE of England the proportion who own their house has fallen from 64% in April 2003 to 56.5% now – according to the Evening Chronicle this is “the lowest figure in Britain apart from Inner London”.  Greater Manchester has experienced the greatest drop – 14 percentage points from its peak in the early 2000s with fewer than six in ten households  owning their own home.

For many people home ownership is an unrealistic dream and there isn’t a good supply of public rented homes.  In Greater Manchester the proportion renting privately came close to tripling between 2003 and 2015.  Unlike European countries with a significant rented sector we don’t have rent controls.  Private rents have been rising and are eating up an increasing share of people’s earnings.  This not only affects living standards of the renters but the economy as whole as people’s disposable incomes are reduced (i.e. people have less to spend on other goods and services).

“Real average working age household income has grown by £32 a week (7 per cent) between 2002-03 and 2015, while real housing costs have grown by £21 a week (32 per cent). As a result, two thirds (66 per cent) of the income gains over the period have been absorbed by rising housing costs.”

“Real average private renter household income has grown by £8 a week (2 per cent) over the period while real housing costs have grown by £19 a week (16 per cent). This means that the income gains made by this group have been absorbed by rising housing costs more than twice over.”   http://www.resolutionfoundation.org/publications/the-housing-headwind-the-impact-of-rising-housing-costs-on-uk-living-standards/

Former leader of Newcastle City Council, Labour peer Lord Jeremy Beecham, told the Evening Chronicle “…the figures revealed the Government’s housing policy was a shambles because it left too few affordable homes to rent or buy, adding that providing more social housing was crucial to deal with the problem”.  In Scotland the government has ended the ‘right to buy’ which has contributed to the decreasing social housing stock, but some would say that’s ‘too little, too late’.

House prices 1995-2015

The Office for National Statistics has just published house price statistics for small areas for the year ending Dec 1995 to year ending Dec 2015.  These reports use data from the Land Registry to compile statistics on the price paid and composition of residential property transactions on properties sold at full market value in England and Wales.

In 2015, the median price paid for houses in most areas in England and Wales (58%) was over £175,000.  The most expensive areas were in London, with the most expensive  of all  £2,975,000 (down from its 2014 peak of £3,500,000).  By contrast, 20 years ago in 1995, eight out of every ten areas in England and Wales had a median house price between £25,000 and £75,000.

The geographical pattern is actually quite complex.  There is a broad north-south divide, but there are also property hotspots in rural areas including Northumberland (see map below).

The smallest areas for which statistics are presented are middle layer super output areas (MSOAs), of which there are 7,201 in England and Wales.

Over the last twenty years (1995-2015) house prices have risen considerably but not always steadily.  Newcastle has been on average consistently more expensive than Gateshead and South Shields.  In the urban parts of Tyneside there were peaks in 2005 (£150,000 in Newcastle) and 2008 (£176, 500).  Only in the third quarter of 2015 did prices in Newcastle exceed 2008 levels (£176,000 plus). [See graph below.]

The Newcastle Evening Chronicle has provided a calculator which allows readers to enter a postcode and find out the median price for that area based on the data in this report (June 17th 2016).  However, treat the results with caution as some of the small areas are actually quite large and the data is not actually postcode based.  Putting in NE6 2DJ (Byker) produces the same results as NE6 1TT (St Peter’s Basin) despite the latter being a more upmarket area.  To the west of the A1, NE13 9BD (Great Park), NE13 7LQ (Dinnington) and NE3 2RD (Kingston Park) all give the same results.  Using NE3 2QX for Kingston Park instead yields a very different result.

Chronicle How much do houses cost near me? http://www.chroniclelive.co.uk/news/property-news/how-much-houses-cost-near-11486566 (June 17th 2016)

Graph of house prices 1995-2015 (urbanised areas of Tyneside)

graph ons data tyneside
Median house prices Tyneside 1995-2015 (click for large size)

Map of house prices in England and Wales 2015

Source: Office for National Statistics, Ordnance Survey and Land Registry under the Open Government Licence v3.0. Contains OS data © Crown copyright 2016. Large size.

ddb60ddd
https://www.ons.gov.uk/resource?uri=/peoplepopulationandcommunity/housing/bulletins/housepricestatisticsforsmallareas/yearendingdec1995toyearendingdec2015/ddb60ddd.png

The housing crisis and some solutions

The Guardian and The Observer newspapers have undertaken a survey on the UK housing crisis and present an analysis of housing issues at May 1st 2016.  http://www.theguardian.com/cities/series/uk-housing-crisis

Rowan Moore argues that council homes were the answer in 1950 and they still are: http://www.theguardian.com/cities/2016/apr/30/housing-crisis-council-homes-are-the-answer

Yvonne Roberts looks at alternative ways to tackle the crisis from co-ops to micro-building to self-builds: http://www.theguardian.com/cities/2016/may/01/housing-social-innovation-ideas-from-across-world

The Observer poll of 1,000 renters found that 37% say home ownership is out of reach for good while 71% couldn’t buy without family help: http://www.theguardian.com/cities/2016/apr/30/housing-crisis-poll-city-country-split-blame

Brownfield quicker to develop

Research by the Campaign to Protect Rural England (CPRE)suggests the best way to increase our housing stock is to build on brownfield sites because these are developed more quickly than  greenfield land.

Shaun Spiers, chief executive CPRE, said:  “This new research shows that brownfield sites are developed more quickly than greenfield sites, giving the lie to the idea that developing a brownfield site must be difficult or unprofitable. What is needed now is for the Government to put all its energy behind getting houses built on derelict and vacant sites.  Crucially, it must drop the idea that the way to get houses built is simply to make more countryside available. The evidence is that this will slow down house building, rather than speed it up.” http://www.cpre.org.uk/media-centre/latest-news-releases/item/4257-brownfield-sites-developed-six-months-faster-than-greenfield-sites [March 16, 2016]

 

Generation rent – under 35s

Under 35s are increasingly generation rent

A housing analysis by  think-tank The Resolution Foundation, Living Standards 2016, has found that under-35s face a future as private renters rather than buyers or tenants in social housing.

  • Nationally, home ownership has been falling slowly since 2000, following a steady increase from the 1950s, and is around 63 per cent;
  • Those aged 65+ now account for 32 per cent of all homeowners (cf. 23 per cent in 1998);
  • Those aged 16-34 account for just 10 per cent of homeowners (cf. 19 per cent in 1998);
  • For those under-35 in modest income working households (working-age households in the bottom half of the income distribution who are primarily in work) levels of private renting have more than doubled, from 22 per cent to 53 per cent.
1
UK tenure low to middle-income households under 35, 1998-2013.

Source: Resolution Foundation

Chief economist Matt Whittaker said: “If we want to see an increase in working families being able to afford to buy, it is essential that the housing shortage is tackled by the Government. Schemes such as Help to Buy can only ever help a minority…  It is hard to imagine any way out of the home ownership crisis facing those on low to middle incomes that doesn’t involve significantly boosting house building.”

The Resolution Foundation is a non-partisan think-tank that works to improve the living standards of those in Britain on low to middle incomes.  The foundation conducts analytical research on living standards in the UK and aims to produce policy solutions that shape the debate on economic and social policy.

The Guardian published a report about the Resolution Foundation analysis on February 13th 2016.  This post is based on the foundation’s press release.