The housing surplus in the UK has, over the last 40 years, now become a shortage. How has this happened? How have we entered into a housing crisis and how can we respond?
For the last four decades there has been an under-supply in our UK housing marking, resulting in housing problems. Including overcrowding, high rental costs, high market values, long commutes and homelessness across the country. The price of housing is high compared to salaries, causing problems for the Millennial generation.
In 1951 the national census recorded that 75% of households were living in substandard conditions or were overcrowded. The Political parties of the time initiated unprecedented levels of building. With private and local authority houses being completed in post-war new towns.
Over the next 30 years the housing shortage was overcome, the combination of private and public housing successfully helped the housing shortage. This was the basis for the HRA (Housing Revenue Account) which helped to provide social housing in the expensive urban areas.
Right to Buy
The Housing Act 1980 introduced the ‘Right to Buy’ in England and Wales. This gave Council tenants the right to purchase the home they had been living in, a policy which has remained unchanged since. They also looked at the prices of selling and the amount of discount, which later rose to 70% of the house value.
The problem arose here when there was no commitment made to re-use these funds to invest in more social housing. Restrictions were also imposed on to the councils capacity to build new social houses.
Since 1980 about 2.5million council homes have become privately owned, with barely any becoming available on the rental market. In the same period only 750,000 council homes have been built, which has caused a huge deficit.
This once robust social housing system has been pulled apart, causing a modern day housing crisis. The rise in house prices and the amount of deposit required for a mortgage has restricted many people in their quest to secure a mortgage.
Movements away from social housing and towards shared-equity, starter homes and rent to buy schemes have not made a significant improvement over the last few years. The aim is to create more diverse communities without the cluster of council housing previously seen, with more developments seen in urban and rural communities.
Do we need a New Scheme?
To follow in the footsteps of the successful pre-1980’s housing approach we would need a new focus. A scheme that aims to complete up to 300,000 new houses annually, with just over 100,000 being affordable housing.
Nationally we need an increase in the level of publicly owned house stock to provide housing on the level it is required for the years ahead.
Do we need to considering the reversal of the ‘Right to Buy’ scheme as it has been in Scotland, and looking into the potential of life-long tenancies being encouraged.
Local Councils could analyse the housing supply and demand in their areas, allowing them to identify whether they require more private sales, rentable or affordable housing in the area. Then they could help contribute towards a long term plan for the management of the local housing supply.
Are Modern Methods of Construction the answer to the Housing Crisis?
What do first time buyers need to know?