Why we need to talk about affordability
by Tiffany Lam, Research Manager, Quality of Life Foundation
To tackle the housing crisis in the UK, we need to focus on addressing the supply, quality and affordability of housing. The supply of housing has been hogging the limelight for a while, with the much-vaunted (and never reached) figure of 300,000 new homes a year and a steady stream of people berating the planning system for getting in the way. And quality is something that the New Homes Quality Board and the Office for Place are meant to take care of. But what about affordability, the poor cousin of the housing crisis?
It’s time we raised the problem of affordability so that we promote quality of life for all, and not just those who can pay for it.
In 2017, Sir Michael Lyons wrote that “we would stress that it is not just the number built but also the balance of tenures and affordability which need to be thought through for an effective housing strategy.” And a House of Commons Research Briefing on tackling the under-supply of housing in England published in early February notes that there has been increased focus on addressing affordability as distinct from supply. According to research commissioned by the National Housing Federation and Crisis, there needs to be 145,000 new affordable homes each year until 2031, a figure that strengthens the case for more social rented housing development.
However, the current planning system cannot provide the social and affordable housing this country requires. Increased build costs arising from both domestic and international labour market and supply chain disruptions have considerably reduced social housing delivery in every region in England, particularly the north and midlands. The long-term undersupply of social and affordable housing in the UK, coupled with the short-term risks to affordable supply from escalating building costs, significantly jeopardise the government’s ‘levelling up’ agenda to reduce regional inequalities. It also continues to widen health inequalities, which have worsened across the country, but especially in neighbourhoods of high deprivation where people spend more of their shorter lives in poor health compared to those in less deprived areas.
Given the economic fallout from the Covid-19 pandemic, soaring energy bills and the cost of living crisis, we can expect an increasing number of Britons to be concerned about affordability. While fewer homes in England are classified as non-decent compared with 10 years ago, overcrowding and affordability problems have increased in recent years. Those who are more likely to struggle with housing affordability are younger adults, people from ethnic minority backgrounds and those on low incomes. These inequalities in housing affordability deepen and perpetuate other socioeconomic and health inequalities.
Soaring house prices and rents exacerbate the cost of living crisis and inequalities in access to quality, affordable and secure housing. In January 2022, Halifax reported that UK house prices reached a record high and house prices remained 9.7% up on average compared with January 2021. Meanwhile, private rents in Britain are rising at their fastest rate on record. Compared to before the pandemic, renters in the UK are now paying £62 more per month, bringing the average monthly rent to £969 and making home ownership even more out of reach for many.
The dual phenomenon of rising house prices and rising rents have been compounded by wage stagnation, with real term wages lower now than before the 2008 financial crash, and widespread precarious work. In 2019, 3.7 million people in the UK were in insecure work (e.g. casual and seasonal work, zero-hours contracts, gig economy work), including many health and social care workers that got us through the pandemic. There is a direct and mutually reinforcing relationship between insecure, low-paid work and insecure, overpriced rental accommodation, which disproportionately disadvantages women, particularly those living in London.
Increasing housing supply is necessary but not sufficient to tackle the housing crisis, as building more new homes that are not affordable for the majority of the British population will simply not do. Affordability is key, especially to deliver on the government’s ‘levelling up’ agenda. This means ending the politics and practices that commodify land and housing, treating them as financial assets, rather than homes for people and their families to live and thrive. Fortunately, in the UK, there are existing initiatives working to transform the housing system so that it serves people and the planet.
First off, a growing network of communities across England and Wales have established community land trusts (CLTs), which are set up by local people to develop and manage affordable housing. While CLTs have historically focused on providing affordable housing, they have expanded, especially in recent years, to provide a wider range of community assets, including community gardens, civic buildings, pubs, shops, shared workspace, energy conservation schemes and food growing projects.
Secondly, more local authorities are raising their ambitions in allocating land in a way that benefits the public interest and generates social value for local communities. This means creating more affordable land for more affordable homes. For example, Liverpool City Region established a land commission to explore ways to bring about democratic land reform, so that land use helps to drive health, wellbeing and environmental sustainability and, in turn, generate genuine economic and social benefits for local people. In a similar vein, Newham Council launched a community wealth building strategy, which is meant to complement their approach to tackle the housing crisis and health inequalities in the borough by building new energy-efficient, affordable council homes.
Finally, renters’ unions in cities across the UK are supporting renters living in the private and social rented sectors to fight for safe, secure, affordable and decent homes. Renters’ unions are typically led by and for renters, social housing residents, people living in temporary accommodation and homeless people. In cities like London, Manchester and Bristol, renters’ unions have been successful in challenging bad landlords and letting agents, get much-needed repairs for renters and stop illegal evictions. There is also a Renter Manifesto, part of an England-wide renters’ campaign for affordable and quality housing.
These initiatives show that there is increasing appetite and collective action across the country to democratise our housing system. We can build on these efforts to transform our housing system, so that it is in the service of people and the planet, not profit.
