The UK Affordable Housing Crisis: Can a Solution be Found?

The lack of affording housing in the UK is a problem that dates back four decades. A housing crisis was the cause of rioting in Northern Ireland in 1969, and 11 years later, the Housing Act was introduced.

The act established many partial-privatisation arrangements, including the establishment of the Tenant Management Organisation which manages the Grenfell Tower, the site of a deadly fire earlier this summer.

“This tragedy arose from an environment of cuts in funding, de-regulation, outsourcing and privatisation policies that have been applied to all public services over the past 40 years,” Stewart Smyth, director of the Centre for Research into Accounting and Finance in Context in the Management School at the University of Sheffield, said. “Even before the austerity policies of the Coalition government, council tenants suffered from what was known as the Moonlight Robbery.”


Tenants in Horrible Condition

Annually, in the UK, $1.8 billion more is collected in rent from council tenants than is spent on building maintenance. It is estimated, that rental income would need to increase $6.5 billion to cover repairs in Chelsea and Kensington alone.

In the UK, 525,000 social homes do not meet the health and safety standards established in the Decent Homes Standard, according to data from the English Housing Survey. Of those, 244,000 were in the highest risk category for fire, an increase from 2013.

The Decent Homes Standard was adopted in 2000 with the goal of having all public housing meet minimum government standards by 2010. The report illustrates how much work still must be completed to accomplish the government’s goal.

This means more than 1 million people live in substandard housing, and this figure does not include properties owned by private landlords.

Properties are deemed “non-decent” if they fail in one or more categories: lack of modern sanitation and bathroom facilities, lack of adequate heat, in a state of disrepair, or lack of safety standards.

Earlier this month, an editorial was published in The Courier that was a rebuttal to the newspaper’s report on an housing shortage in the Scottish towns of Perth and Kinross.

Wages in the area are 7% lower than the national average, author George Mailer said.

“I would like to point out that the only housing crisis in this area is from a shortage of affordable houses,” Mailer said. “There is enough land in the area with planning consent to allow the county to grow at a sustainable level.  The developers just need to build the houses at prices local people can afford.”


London Mayor to Spend Billions

Earlier this month, London Mayor Sadiq Khan announced the city would be offering $2.2 billion to housing associations and councils for the construction of 50,000 affordable homes over the next four years.

Khan has pledged 90,000 new homes by 2021. They will be built by London’s nine councils, housing associations and private developers.

“We know that solving the housing crisis is not going to happen overnight, but I very much welcome so many housing associations and councils committing to build the new and genuinely affordable homes Londoners so desperately need,” Khan said.

Housing associations welcome the plan, although landlords had more direct control under older programs.


Other Solutions

Members of Parliament would like to make housing associations subject to the Freedom of Information (FoI) Act.

The bill needs to be sponsored by one of the MPs who were successful in the Private Members Bill ballot to move forward.

“Housing associations have for years actively resisted coming under FoI,” Maurice Frankel, Campaign for Freedom of Information director, said. “The result is that when questions are put to them they can fold their arms, look the other way and refuse to answer.”

Meanwhile, think tank Adam Smith Institute thinks the solution is to allow councils to purchase land, grant planning permission and then sell the land. The move could result in $39 billion being raised for public services.

“Not only would a system like the one we’re proposing make house building much easier in the places it’s needed most, it would create a large and lucrative source of revenue for local government,” Sam Bowman, the institute’s director said. “That would truly be a win/win for everyone: more houses, more money for locals, and less of a drain on central government which can redirect some of the money saved to other areas.”

Housing will be one of the key topics discussed at MIPIM UK 2018. Click here to discover the programme.

Top photo © Photobuay/GettyImages

About Author

Melina Druga is an author and freelance journalist, working with our partner Reportlinker.

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